The N.A.R. Settlement - What Does It Mean For Appraisers?
The recent National Association of Realtors (NAR) settlement has sent ripples through the real estate industry, and appraisers are rightly curious about how it might affect their practice. While the settlement primarily focuses on realtor compensation, there are potential indirect consequences for appraisers to consider.
Here’s a breakdown of the NAR settlement and how it could impact appraisers:
Increased Scrutiny on Appraisal Independence:
A core tenet of the settlement involves ensuring appraisers operate independently and free from pressure to influence valuations in favor of a particular party. This focus on appraiser independence could lead to stricter enforcement of Uniform Standards of Professional Appraisal Practice (USPAP) guidelines. Appraisers should be prepared to meticulously document their valuation process and rationale to avoid scrutiny.
Potential Shift in Appraisal Selection:
The settlement might influence how lenders select appraisers. Lenders may prioritize appraisers with a strong track record of impartiality and adherence to USPAP. Building a reputation for accurate and unbiased appraisals will be crucial for appraisers in this evolving landscape.
Impact on Appraisal Fees:
The settlement doesn’t directly address appraisal fees. However, some speculate it could indirectly lead to downward pressure on fees. With a greater focus on competition among appraisers, lenders might prioritize cost-effectiveness. Appraisers will need to demonstrate the value they bring by providing high-quality, defensible appraisals in a timely manner.
Technology and Automation:
The settlement could accelerate the adoption of appraisal technology and automation. Lenders might be more inclined to explore solutions like Automated Valuation Models (AVMs) or hybrid appraisals that combine automation with human expertise. Appraisers who can leverage technology to streamline their workflow and enhance efficiency will be well-positioned.
Opportunities for Collaboration:
The NAR settlement emphasizes open communication and collaboration between realtors, lenders, and appraisers. Appraisers who can build strong relationships with lenders and realtors, fostering trust and transparency, might benefit from increased referral opportunities.
Staying Informed and Adapting:
While the full impact of the NAR settlement remains to be seen, appraisers should stay informed about evolving trends and regulations. Appraisal management software (AMS) like ValueLink Connect can be a valuable tool for appraisers to streamline communication, manage workflow, and ensure compliance with USPAP.
The Road Ahead
The NAR settlement presents both challenges and opportunities for real estate appraisers. By focusing on independence, quality, efficiency, and collaboration, appraisers can navigate this changing landscape and continue to play a vital role in the real estate transaction process.
As a leading provider of AMS solutions, Connect by ValueLink empowers appraisers to manage their business effectively. Our platform streamlines communication, ensures compliance, and facilitates efficient workflow management, allowing appraisers to focus on delivering high-quality appraisals.
Stay tuned for future blog posts where we delve deeper into specific topics related to the NAR settlement and its impact on appraisers!
