Why It's Crucial For Lenders To Adopt Modern Appraisal Technology

The legacy appraisal process is fraught with inefficient manual workflows, from finding an available appraiser and scheduling the assessment to managing fee escalations and collecting borrower payments. Modernizing these workflows is not as time-intensive as other technology upgrades, and the result is a high return on investment (ROI).

Optimizing appraisals is a relatively light lift for lenders

When lenders consider ways to improve their operations, appraisal technology typically does not receive as much attention as implementing a shiny, new point-of-sale (POS) or loan origination system (LOS). However, appraisal management platforms deserve a share of the spotlight for their ability to deliver on important business objectives like cost cutting, efficiency gains, improved turn times, and increased customer satisfaction.

Crucially, appraisal management technology is significantly less of an implementation burden compared to other major technology initiatives, particularly when following implementation best practices learned from other lenders.

Areas where appraisal technology improves a lender’s operation

Ask yourself these questions to better understand the impact of your current operational setup and whether automation or technology could help: 

• Reclaim sunk costs: How much money do you waste in appraisal fees where the borrower falls through, because you don’t have modern payment-processing technology?
• Improve borrower experience: How many loans miss rate locks due to the appraisal being delayed? How frequently are there mismanaged expectations when it comes to appraisal fees charged to the borrower?
• Increase vendor adoption: Are your appraisers not willing to work with you, and therefore not picking up orders in a timely manner, due to the inaccessible user interface on their side?
• Scale business: How many more loans could you do each month if your appraisal capacity was higher?
• Improve retention: Does your appraisal process provide a negative experience for your production staff?
• Provide transparency: Do your borrowers feel in the dark when it comes to the appraisal process, decreasing your organization’s net promoter score (NPS)?
• Increase efficiency: How much of your internal support capacity is being used up by appraisal-related problems? How much is appraisal-related headcount costing?

These issues can be mitigated or even eliminated with appraisal management technology that is able to address each facet of the appraisal process. The following list describes the systems that are directly related to the appraisal process and how modernizing each of them can improve lender outcomes.

Appraisal ordering, allocation, and scheduling

One of the longest and most manual parts of the real estate appraisal process is finding an available appraiser and scheduling the assessment. In fact, recent research conducted by STRATMOR group found that it takes lenders an average of more than seven days from the time of application to the scheduling of an appraisal. Today’s cloud-based technology can automate every step of the ordering process, saving team members time from completing these tasks manually. Connected mobile apps support the process by allowing appraisers to see and accept new orders in a tap, anywhere they are.

Appraisal payments

Many lenders manage most aspects of payment processing manually, from managing fee escalations and fee disclosures to collecting borrower payments and paying out appraisal vendors. Automated payment processing both eliminates manual work and speeds up remittance. A manual process can cost a lender thousands of dollars annually, as a case study showed issues with appraisal payments caused revenue leakage for a regional bank.

Notifications and communication on appraisal statuses

Borrowers have high expectations for response times and process visibility in today’s always-on digital world. If those expectations are not met, they check in often, thereby slowing down the LO and appraisal desk. Automated notifications and status updates keep all parties informed without the need for manual intervention. Appraisal technology can also help minimize reactive communication by automatically generating a daily report for LOs that provides the latest status of all their active orders. Keeping LOs informed on appraisal statuses was a huge win for North Easton Savings Bank as VP - Director of Sales Jim Dell’Anno outlined in a customer story.

Appraisal document delivery

Once the appraisal is complete, lenders need the final documentation to be delivered to the borrower, a process that can be rife with mistakes if it includes manual touchpoints. An appraisal management platform can streamline file delivery by sending an automated email to the borrower with a download link, which can also serve as means to track receipt. Plus, appraisal technology can also automate the process of uploading files to an LOS and submitting reports to the GSEs.

How lenders can optimize appraisal operations

These are just a few of the ways lenders can fully transform their appraisal process. Taking advantage of the full capabilities of appraisal management software can reduce operational costs for lenders by up to $258 per loan file.

To learn all the necessary steps to getting the full benefits of appraisal tech, download the appraisal management tech buyer’s guide for mortgage lenders.

Is margin compression on your mind? Appraisal management technology can improve margins for lenders and Reggora can impact the bottom-line by up to $286 per loan file. Request a demo and take your first steps to cutting costs in your appraisal operation.