Appraisal during COVID-19
Written by Liana Whitehead on March 31, 2020
Updated Friday, April 10, 2020
A host of bills are up for review by Congress due to COVID-19. From New York to California, we’ve seen sweeping changes in day-to-day life because of pandemic restrictions and guidance. Each city, state, and country seems to be responding with their own requirements to mitigate the spread of the virus and manage exposure.
What does that mean for appraisers? We wish we could give you a play-by-play of what to expect in upcoming days, weeks, and months. We’re not health professionals or economists, but we are appraiser advocates. And we want to help you navigate your new workflow in the face of a completely different environment. Keep reading for information on recent, temporary policy updates, tips for working remotely, and links to helpful resources.
Important updates for our customers
Forms in TOTAL and Titan Reports
It’s important to know that GSEs have not, and will not, release new forms or form changes. Our latest updates to TOTAL and Titan Reports give you access to new, pre-filled addenda, in compliance with
Fannie Mae, Freddie Mac, FHA, and the FHFA COVID-19 guidelines. There’s no need to copy and paste the information into your reports. Simply select the appropriate addenda and enter either “Desktop” or “Exterior” in the Map Reference field, according to the type of appraisal.
The COVID-19 addenda were added for your convenience
FHFA guidance says to add specific text to a report, if required by the client. Many of our appraiser customers were addressing this by creating a multi-line QuickList of that text in TOTAL, so they can add it to a MultiPage Addenda, as necessary. With the new, pre-filled addenda in TOTAL and Titan Reports, we’ve simply added another way to get that text into your reports. And, we recently released a plug-in update that allows ENV delivery, so, now, it will be seamless.
While we’ve added the addenda to TOTAL and Titan Reports, we will not be adding them to Aurora. We highly recommend updating, for free, to TOTAL, our more modern formfiller. Follow the steps in the link above to move your reports, data, contacts, users, QuickLists, and images from Aurora to TOTAL, at no cost.
On March 28, the Cybersecurity and Infrastructure Security Agency (CISA) updated its Memorandum on Identification of Essential Critical Infrastructure Workers During the COVID-19 Response. It clearly defines the essential nature of AMCs, appraisers, and real estate brokers. Although some states, cities, and counties aren’t using CISA guidance during this time, none of them have prohibited appraisal as a support for the essential work of lenders.
Added under “Essential Community and Government Operations”:
- Residential and commercial real estate services, including settlement services.
- Staff at government offices who perform title search, notary, and recording services in support of mortgage and real estate services and transactions.
Under “Essential Financial Services”:
- Workers who are needed to provide, process and maintain systems for processing, verification, and recording of financial transactions and services, including payment, clearing, and settlement; wholesale funding; insurance services; consumer and commercial lending; and capital markets activities).
- Workers who are needed to maintain orderly market operations to ensure the continuity of financial transactions and services.
The FHFA announced, on March 23, that Freddie Mac and Fannie Mae are implementing more flexible appraisal methods during the COVID-19 outbreak that reduce the need for interior inspections. The Fannie Mae Lender Letter (LL-03-2020) was updated on March 31 and will be updated as new guidance becomes available.
This video explains temporary appraisal flexibilities for loan applications dated on, or before, May 17, 2020 (unless extended).
It’s important to stress that these measures are temporary. For now, exterior-only inspections are a cautious way to appraise. Some lenders have implemented COVID-19 protocols allowing appraisers to make inspection decisions based on what they’re comfortable with, like referring to recent inspection reports and pulling info from public documents, plus, the exterior inspections. If you aren’t clear on what options are acceptable for an order, contact the lender, client, or AMC for clarification.
To help with these alternative appraisal methods, our free TOTAL for Mobile app allows you to accurately sketch, onsite, and take drive-by photos. It was built to speed up inspection times with the ability to choose the form fields you want to see while onsite, without unnecessary scrolling or paper-flipping. You don’t need an internet connection to collect data and sketch in the app; just send the files you need when you get back to the office or to a connection area.
You can also get your measurements from a distance with tools like this iPhone augmented-reality measuring tool that calculate linear distances in inches and feet using your phone’s camera.
Inspection advice from appraisers, for appraisers
Right now, social media groups and forums are overflowing with tips and advice from appraisers working during COVID-19. Some of our customers have also published blogs on the topic.
What Homeowners can do to Assist the Appraiser during the coronavirus Pandemic by a la mode customer Tom Horn
Working with Appraisers during a Pandemic by a la mode customer Ryan Lundquist
Appraiser Life in the Age of the coronavirus by Tony Pistilli, Chief Appraiser at Computershare Valuation Services, LLC
From appraiser Rick Mayberry, a la mode customer and owner of Chester County Appraisal Services:
“This is just one possible solution to avoid shifting to all 2055s. I just completed my first go-round with a virtual inspection. The borrower was kind enough to call and let me know his wife was not feeling well and asked to reschedule. We discussed the fact that Pennsylvania . . . is “closed” as of last night. I’d been thinking about what I would need from the buyer/borrower and this is what I have come up with. I provided a detailed list of how to photograph or video each and every room of the property. I included details on showing the hot water heater, furnaces, sump pumps, radon pumps, etc. I also used this tool that allows you to photograph the exterior and get back a drawing of the exterior, and I know, after a year and half of testing, that it’s accurate to the inch. I sent a link to the app to the borrower. I will get all my photos and have a measured drawing. I will disclose in my report that I did not inspect the interior and will drive by the subject and shoot my own front and street views, as well as comparables.”
What some appraisers are leaving on their “curbside” 1004s, according to Dustin Harris, The Appraiser Coach:
“Due to the current coronavirus situation, modifications to the ‘normal inspection’ protocol have been taken for the protection of myself, my family, and the point of contacts and to assist in slowing the spread. A drive-by from the public road was done, and online data was found giving details about the subject property. A video tour of the interior (and areas that could not be seen from the street) was completed by the POC and sent to me for analysis. These data sources were the best that could be completed in the current situation. I believe the information obtained from these sources is credible to the point that I can make an accurate determination of the features and create a credible valuation conclusion. Whereas real estate financial services are considered ‘essential services’ during COVID-19, unique exceptions are being made. My Scope of Work DID NOT include a physical walk-through of the subject property, and I am making an extraordinary assumption that the data obtained in accurate and basing my valuation process on this information during these unprecedented times.”
More tips and advice
- If you’re planning an inspection, only bring what is necessary
- When scheduling an appointment, have a conversation with the borrower/owner about any risk for infection, and allow them to ask you the same questions
- Examples of appropriate screening questions for any situation, not just appraisal-related:
- Is anyone in your home currently sick with a fever, shortness of breath, and/or cough?
- Has anyone in your home been exposed to someone who has, or his suspected of having, COVID-19?
- Have you recently been exposed to someone who is sick?
- Talk with clients about safety protocols and precautions – yours and theirs – that are in place. Don’t have protocols? Start carrying disinfectant wipes to and from appointments, keeping face masks in your bag, having a thermometer on-hand, and cleaning your iPad, laptop, and phone before and after appraisals. This will also be a comfort to occupants.
- If you plan on wearing a face mask, gloves, or avoiding physical contact (like a handshake) at your appointment, let the borrower/owner know. If you’re concerned about touching surfaces, you can ask them to open and close all doors and flip light switches before and after the appointment.
Remember that you have access to technology, much of it at no cost, that makes collaborating with your team and clients possible during this pandemic.
There are tons of free apps that help you communicate with staff and clients when meeting in-person isn’t an option. We’ve included links to these apps, so you can research what options will work best for you.
The Titan Drive folder in TOTAL’s Appraisal Desktop grants you quick access to any file that’s been added or modified in the last 30 days, as opposed to accessing every file you’ve ever uploaded. Learn more about Recent Reports.
Back office management
Because we’ve all been encouraged to stay indoors, when possible, for the time being, having an integrated back office business tool can be a lifesaver. Doesn’t matter if you’re a one-man shop or fully staffed, our Titan Office tool lets you:
- Manage your upcoming assignments, new orders, and outstanding invoices, all with one login
- Note any health and safety protocols per clients during COVID-19, and access those notes onsite
- Push or automate email status update notifications directly to assigned client contacts
- Update statuses and order details automatically with revision requests
- Schedule new inspections easily with map and calendar views
- Securely accept payments from anywhere with integrated credit card processing
It’s important to keep market analysis liability at the forefront during COVID-19. President of Texas Valuations Brent Bowen has this to say:
At this time, the appraiser assumes that there is a delay in market activity, but not a significant long-term shift in demand or supply which would result in a change in market prices. These are considered to be extraordinary assumptions which, if proven false, could impact the opinions and conclusions expressed herein. Of course, your analysis and assumptions should be dependent on your market . . . take the opportunity to be a trusted market expert. Use your skills and experience to analyze the available data to make appropriate assumptions and draw supported conclusions which are applicable to your specific market.
For help with your market analysis, our Titan Analytics tool allows you to analyze data, with visual support to back it up, making in-depth analysis clear and concise. It’ll help back up your adjustments, opinion of value, and comps for fewer client questions or revisions and to help avoid repeat site visits.
This is the time to come together as a community and support one another — from an acceptable social distance. To learn more about ways you can work remotely, check out our help doc.
These are resources that can help you stay up to date with industry news and changes:
- Fannie Mae announcements and updates
- Fannie Mae Q&A
- Freddie Mac bulletins and updates
- FHFA news and releases
- The Appraisal Foundation coronavirus news
- The Appraisal Institute coronavirus news
- Dept of Veterans Affairs Valuation Practices during COVID-19