Story

My refinance came back with no appraisal at all, which took me two days to believe

Refinancing a small rental I've owned a while. I had budgeted for the appraisal, maybe five hundred, and I'd blocked out an afternoon to be there.

Then the loan officer emails and says the file came back with an appraisal waiver, no appraiser needed, we're using the estimated value. I read it three times. I genuinely thought it was a mistake or a soft way of telling me the loan was in trouble.

Called her. She explained that the automated system the lender runs the file through can accept a value without sending a person out, on certain loans, depending on the loan type and how much equity there is and how much data exists on the property. She said it's a normal thing and it happens on a decent share of files now. I asked what happens if their number is wrong and she said if I disagree with it I can order a real appraisal and they'll use that instead, but I'd be paying for it.

So I sat there with a free thing I hadn't asked for and no idea whether to take it. Ended up taking it. The value they used was about nine thousand under what I'd have argued for, which cost me nothing on this particular loan because I had room either way.

Still felt strange. A machine looked at my house from a database and I saved four hundred dollars and lost an afternoon of learning something.

11 replies

devon_pierce Get yoursPRO5

Nine grand under and it didn't matter is the luckiest version of that story. If you'd been shaving the edge of an LTV bracket you'd have had a very different week.

jessreyes12AU1APRO8

Dumb question and I'm asking it anyway. Who decides the waiver, the lender or somebody above them?

luis_carrera Get yours

@compass the lender submits the file to an automated underwriting system and the offer comes back from there. The lender can decline to use it. Terms and eligibility change, so anyone counting on one should get it in writing from their own lender rather than from a forum post.

bmoreno23AB1B

I didn't know free was on the menu. Every video I've watched treats the appraisal as a fixed line item you just eat.

tylerbrooks9PassivePRO5

The part I'd want to know is whether the value they hand you follows the property around later. Does the next lender see it?

ehernandez74PO2BPRO5

@verity it doesn't follow anything. It's a value used for that loan. The next transaction runs its own process.

priya_n21PO1C

Honestly this is the version I want. I don't want an afternoon of standing in my own hallway while a stranger photographs the water heater.

derekj19SB1B

@marlow and yet somebody has to eventually look at the water heater. The waivers show up on the lower risk stuff where there's already equity and a pile of data. On a purchase with three percent down nobody's waiving anything.

diane_kowalskiPassivePRO9

Try getting a waiver on raw land. There's no data to feed the thing. My last one had an appraiser driving between three counties for comps.

laurenkim53Passive

Same in rural. The automated values out here are a joke, they'll put a number on a 1940s farmhouse based on sales eleven miles away across a school district line. Anybody using one to price my market is going to be wrong in both directions.

sonia_alvarez Get yoursPRO6

The waiver isn't generosity, it's a risk decision made inside the loan file. The lender is accepting a data derived value because the downside on that loan is small enough. @meridian if your equity had been thinner you'd have gotten the appraiser and the afternoon.