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| Appraiser X has been a licensed real estate appraiser for 26 years. X is licensed in the state of Tennessee. Homeowners Beware: Look Behind Incentives Your Lender is Offering I noticed an ad running on a Memphis television station claiming a $500 appraisal savings if you use a particular lender. Uh, excuse me, if a lender is advertising that, make sure it shows up in your documents, as I explan below. Here's why: frequently lenders do offer a few enticements to attract your business. One of the “come ons” is that you can save hundreds on your appraisal because the lender is paying that fee for you. An increasing numbers of lenders are advertising a $500 or so savings to you but in fact are paying $210 for the actual cost of the appraisal. And-you guessed it-the "reduced fees" never get passed on to the homeowner. Under recent legislation--for better or worse (more on that later)--appraisers no longer receive any direct contact with the actual homeowner's loan process but rather through a complicated linkage with a company usually owned by the lender known as an Appraisal Management Company ("AMCs"). The AMC contracts with an independent appraiser (like me) to do a valuation on the homeowners Property. The typical fee for the service ranges from $195 to $250 for payment to the Appraiser. The AMC, which is usually an adjunct of the lender, receives a fee of equal or greater amount. Review your federal loan disclosure statement in your loan documents. It will itemize all costs incurred. Be aware the lender's enticements may not always be true. So read your loan documents. Probe. Don't do the loan if you think the lender has advertised falsely. Probably, then, there are more nasty surpises waiting for you in the loan. I'd love to know your loan stories or hear comments from other appraisers. Email them to me here. |