Allston, MA Over the past decade, the real estate appraisal industry has had to grapple with increased fragmentation, stifling regulations, and a lack of innovation. Given how integral the appraisal is to a successful lending process, these combined factors pose a serious risk to the prosperity of the appraisal industry.
Since the housing crash a decade ago, Congress has rolled out a series of laws governing how lenders and appraisers interact in an effort to ensure that appraisals are independent and accurate. In a nutshell, a stone wall exists between the two parties today. Loan officers are not allowed to directly engage with appraisers and so lenders must either create an in-house appraisal processing department separate from the sales department, or outsource their appraisals to third-party intermediaries called Appraisal Management Companies.
These laws that govern appraisal independence have led to an opaque system with multiple different intermediaries, vendors, and stakeholders. The result? Appraisals that take longer to complete, are reviewed less diligently, and incur increased costs.
The system today affects lenders and appraisers who both feel bogged down by the status quo. Lenders, for example, are stuck with limited options when they seek out an appraisal. Those lenders that choose to create internal processing departments must hire extra staff just to manage appraisals and are slowed down by operational inefficiencies. Other lenders that outsource their work are frustrated by a lack of transparency and control over the process - once the appraisal is requested, lenders rarely have insight into the status of the appraisal, how long it will take to get back to them, or if the appraisal will be properly reviewed.
Appraisers find themselves similarly disappointed with the current system. Appraisers have found that their fees have dropped over the past ten years as third parties often take a substantial cut of the fee for appraisals they facilitate. This drop in income is only compounded by expensive and outdated software that appraisers use to manage their companies and complete their appraisal forms.
From an operational standpoint, the appraisal process does not necessarily need to be so arduous. Days are wasted as appraisers play phone tag with brokers to schedule inspection dates. Costs add up as both appraisers and lenders resort to multiple platforms to complete their appraisal needs. Perhaps most importantly, frustration builds due to the lack of innovation and change within the system.
Reggora has waded into the appraisal industry to address these issues for both lenders and appraisers. Our view is that the appraisal process can be condensed and streamlined, costs can be cut, and turn times can be dramatically improved. Our platform adopts an “Uber”-style approach to appraisals by bringing lenders and appraisers onto a single, modern appraisal management platform. Reggora is totally transparent and consolidates a number of different tools into an all-in-one software.
On Reggora, lenders receive a management tool that keeps them in charge but automates all of their appraisal needs from borrower payments to appraiser allocation to a totally customizable workflow that reduces manual processes. Lenders can receive real time status updates, and maintain all their documents and orders in a simple, compliant manner.
On the other end, our vast network of appraisers are given a totally free appraisal platform with an array of tools like advanced, auto-fill form software, company management capabilities, and an easy system to review, accept, and send appraisal orders.
Reggora’s goal is to bring together all the different parties involved and tools needed onto an easy to use platform where both lenders and appraisers can benefit and feel in control. We cut down on delays to the appraisal process by offering easy appraisal scheduling features, chat functions so processors and appraisers can directly interact, auto-generated invoices and forms, comprehensive quality control checks, as well as a simple system to request revisions, if needed.
What we have learned so far from our clients is that a more automated, less manual appraisal process results in happier appraisers and less burdened lenders, which significantly cuts down delays and improves the quality of appraisals. Although laws and regulations may have restricted the appraisal industry, Reggora’s software can serve as a spark in a field where innovation has been stagnant for years.