How digital home valuations are impacting closing times

With anecdotal accounts of lower volume reducing appraisal delays, one might wonder whether using an alternative for valuation remains as important as it was in the recent past.

However, a recent study by this publication’s parent company, Arizent, shows faster closing times would improve customer satisfaction for almost half of borrowers, and appraisal alternatives remain a key lever to pull.

Closing times are typically scripted by sales contracts, and that does make deadlines more important to meet.

“Appraisal timelines have been relieved, but there are still a lot of buyers out there with aggressive closing timelines,” said Ryan Hayes, senior vice president of residential lending at Mortgage Network.

Appraisal waivers can only be used if a loan is eligible, and the GSEs typically make that determination based on, in part, whether sufficient comparable property values in the area are available.

“If you’re in a subdivision with 200 houses based on three models then it may be very easy to find comparable property data to support a waiver. If you’re in a town where you need to go a mile or two away to find the next house, and it’s very different property, then the GSEs’ models are likely going to say, ‘no,'” said Hayes.

And even when borrowers can get a waiver, some don’t want one, and their wishes need to be honored. Changing customer-provided property information without consent in order to obtain waivers can be a fireable offense, as it recently was at Wells Fargo.