Brokers, here’s how to work with an appraiser to close a deal

Appraisal Institute of Canada (AIC) members perform approximately 1 million residential appraisals in Canada annually, reporting on residential property values totalling more than $500 billion. Residential sales have increased, and as the market continues to show signs of unpredictability a higher percentage of these sales are being appraised to determine values on which to base mortgage financing.

For brokers, partnering with a qualified AIC appraiser is a no-brainer, but how can brokers navigate the appraisal process in a way that helps their clients to secure the best mortgage?

1.“Select an appraiser that specializes in the type of property you need valued,” says Dan Brewer, AACI, P.App, past-president of the Appraisal Institute of Canada (AIC). “Use the “property type” dropdown menu available on www.AICanada.ca/find-an-appraiser to select the property that you want appraised.”

2.Share all the relevant details about the property with the appraiser to ensure that he/she fully understands the scope of the assignment. This will help to shorten the turnaround time of the appraisal.

3.“Be clear about the use of the report,” Brewer says. “Different uses may require different approaches to determining value.”

4.Ask the appraiser for a draft report if you are still securing a lender. A draft report could provide you or your lender with what you need to secure financing sooner. Once you have secured a lender, the draft report can be quickly finalized which can help to reduce delays in the mortgage-financing process.

5.“Provide the appraiser with authorization from the original lender if you need to change lenders,” says says Keith Lancastle, CEO of the Appraisal Institute of Canada (AIC). “The appraiser has a duty of care and confidentiality to his/her client - the original lender - and will require authorization from this lender to re-direct the report to a second lender. If given authorization from the original lender, the appraiser may be able to quickly send you a reliance (sometimes referred to as a transmittal) letter for the second lender.”

6.Make sure the appraisal report is not outdated. An appraisal is completed at a specific point in time. If it is an old report or there have been significant market changes since the report was written, ask the appraiser to provide an update or a new report.

7.“Last and likely most importantly,” says Lancastle, “manage your borrower’s expectations with clear communication from the outset with regard to the appraisal report.”

MBN

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