Appraisal Turn Times: What Lenders Should Expect From Their AMC’s
There is nothing more critical to an AMC than delivering quality results to our clients as soon as possible. Lenders need to be assured that loans will be funded on time, which is why we at Trimavin are committed to improving our appraisal turn times by taking advantage of new efficient technologies, re engineering processes, and incentivizing appraisers who will help us reach our goals.
There are many ways to measure appraisal turn time including when the order is placed, when the order is assigned, when the report was received, calendar days, business days and many more. AMC’s use these metrics to know where they need to improve regarding speed and efficiency.
At Trimavin we measure turn time from order placement by the client to report delivery to the client, which includes all hold time. One way of looking at turn time is to break it down into three basic components;Assignment Time – how long it takes us from receipt of order to acceptance by an appraiser. Appraiser Turn Time – how long it takes the appraiser to return a completed report to us from the time he or she accepted it. Quality Control Time (QC) – how long it takes us to QC the file, address any revisions and deliver the final report back to the client. These three basic components, if measured correctly will provide you the best indication of where your AMC may not be performing up to speed.
Below are a few areas in the appraisal space that lenders should ensure their AMC’s are taking advantage of.
Auto-Assignment technology has made appraisal assignment a much faster and seamless procedure because it ensures that the right appraiser receives the right assignment based on the appraiser’s certifications and experience, geographic proximity to the subject, and the lender’s criteria. Matching the most experienced appraiser with the appraisal assignment he/she is most qualified to handle and is closest to his or her approximate location ensures that turn times will decrease further.At one point in our history, every order received by TriMavin was manually assigned to appraisers. Today, between 70-75% of the appraisals are auto-assigned. This expansion of auto-assignment not only differentiates Trimavin from other AMC’s who still assign their orders manually but also has a positive effect on turn times.
Multiple Channel Fulfillment
The most challenging turn time component for the AMC to manage is appraiser turn time. With panel appraisers, who do work for many AMC’s and lenders, ensuring we are getting the attention on our orders is always a bit challenging. So, at Trimavin we have created two additional channels to fulfill orders. “GO2 Appraisers” are independent appraisers who are the best performing appraisers in their geographic area and we have reached agreements with them on turn time, quality and volume. “Staff Appraisers” work directly for Trimavin and do not work for other AMC’s or lenders. With Staff appraisers, we have the maximum capability to control their work and performance. This channel typically outperforms the other two channels in terms of quality and turn time.
48- Hour Pay
Incentivizing appraisers is also critical in managing the second major component of turn time. As just mentioned, appraisal turn times,especially from panel appraisers, are harder for AMC’s to control but can still be enhanced with the proper inducements. In order to stimulate better results from appraisers, a good AMC will offer incentives for performance. One program TriMavin offers Panel and GO2 appraisers is “48 Hour Pay.” If appraisers can return reports within three business days from acceptance, we pay them via ACH with 48 hours. Executing timely payments is critical in maintaining loyalty among our panel of appraisers. Staff appraisers are already paid a standard wage for their work, but if the other appraisers are given an incentive to complete their reports as soon as possible, they will be more likely to do so,resulting in a mutually beneficial transaction between the AMC and appraiser,which ultimately benefits the lender as well.
After the appraiser sends in his or her report to the AMC,it then goes through a QC process where the report is reviewed and given final revisions and approval before being delivered back to the client. Every property is unique and has different features to take note of in appraisal reports. Because of this QC reports should be tiered to ensure the appropriate review given the risk level of the report. At TriMavin we tier reports into three different levels matched with varying FNMA’s Collateral Underwriter (CU) risk score ranges. Level 1 reviewers look at reports with CU scores between 1.0-2.5, Level 2 reviewers examine those between 2.6-3.9, and Level 3 reviewers look at those above 4.0. By matching reviewers with the reports, they are most qualified to examine; it reduces the amount of time reports are held up in QC before being sent out via auto-delivery.
Thanks to auto-delivery, we have significantly reduced our QC turn time. At TriMavin all reports are run through our proprietary Automated Quality Control program which contains 126 rules/checkpoints. Those report that passed 58 critical checkpoints and has received the CU score under 2.5 (lowest risk score and “Day 1 Certain”) will be eligible for auto delivery.The system will deliver these files to the client directly without the intervention of the reviewer if all criteria have been met.
Looking to The Future
Along with these turn time reduction strategies, AMC’S should consider the future of real estate appraisal for ideas on how to streamline the whole process even further. According to a recent magazine article by John S. Brennan, “hybrid appraisal assignments involving an inspection by another party and the use of new 3D/drone technology that can provide digital tours of a property can help obtain necessary information about a subject’s relevant characteristics without performing a physical inspection.” There is potential for this sort of technology to lower turn times even further when appraisers can outsource a few of their regular tasks to others who can perform them more efficiently.
The time it takes to assign orders, for appraisers to examine properties, and for their reports to go through QC is a symbiotic process that in the old days, before the new technology, before there-engineering of processes, would take large numbers of staff to assign and QC reports. With the technology now available today, like auto-assignment, and auto delivery, for example, the average turn time has been lowered to about two-thirds of the original turn time. In California for instance, with 80% of reports being completed by a Staff or“Go2” appraiser, Trimavin’s turn time is now about four business days.
With all of this mind, lenders should expect assignment time and QC time to not be greater than .5 days each, or 1-day total; in Trimavin’s case combined turn times for assignment and QC are often less than one day. Appraiser turn time is a harder factor to control but should ultimately not take more than three days on average. Consider this a good guideline for what to expect from your AMC.
Click here to view Trimavin average turn times by state.