From the Washington Post, an article discussing the negative ramifications of AMC’s offering low appraisal fees:
But some prominent appraisers are scathing in their criticism of management firms. “Their quality is terrible — all they want you to do is crank it out at the lowest cost,” said Jonathan Miller, president and chief executive of Miller Samuel, one of the largest appraisal companies in the New York City area. Only “the least experienced people” are willing to do the work, he said, “and the product is unreliable.”
George Dodd, an appraiser based in Virginia, said “the most experienced appraisers [will be] the hardest hit” by the new code “because of our unwillingness to sacrifice integrity and quality.” Rather than work for peanuts, Dodd said, “I can flip burgers at McD’s for more.”
Where is all this headed? The National Association of Mortgage Brokers plans to appeal to Congress to reverse the code’s ban on broker selection of appraisers, and it is considering a lawsuit challenging the code. Appraisers also are expected to seek changes, either from Fannie and Freddie’s regulator, or from Congress.
Why should this matter to you? Miller says quick, slipshod appraisals can severely undervalue some properties — forcing buyers to come up with bigger down payments — and can scuttle refinancings. Or they can overvalue houses that should be selling for less.
Either way, it matters.
It is good to see an article that clearly states why appraisal quality is necessary to maintaining the health of the housing industry. And, let’s be honest, you don’t get quality without paying for it.