Episode 39: Emma Henderson on Appraisals—What Every Homebuyer Needs to Know

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Nate Carver
You've bought a home and are on the way to closing, and the next thing you need to do is an appraisal. What does that mean to you as a first time homeowner? We're talking to Emma Henderson with

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Nate Carver
AMC encore,

00:00:15:14 - 00:00:36:13
Nate Carver
Hey, I'm Nate Carver and welcome to Between Two Doors.

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Nate Carver
Emma, how are you doing?

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Emma Henderson
I'm doing good. Thanks for having me today.

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Nate Carver
You're welcome. I'm glad you could be on the on the show today. Emma is the vice president of client relations at, AMC encore. It's a nationwide appraisal management company. We're going to delve into what an AMC is. The appraisal management company, and what that means to future homeowners, and why it is an important piece of their peace of mind and homeownership.

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Nate Carver
Okay. A little bit more background on you, Emma. Let's see. You're in the Dallas metroplex of Texas.

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Emma Henderson
Yep. I'm in downtown Dallas. Been here for about four years.

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Nate Carver
Nice. So tell us a little bit of background on you, how you came about, where you started and what your journey is into the appraisal world. And, tell us about that.

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Emma Henderson
Yeah. So I have an appraisal background. I'm a licensed appraiser in Dallas. I got connected with this company through some friends, and their focus was really on bringing new blood into the appraisal industry. Traditionally, that industry is a very, closed door. Kind of a harder barrier to entry. You know, most people get into it because their dad, their uncles or grandpa is an appraiser.

00:01:55:23 - 00:02:17:20
Emma Henderson
It's very much an apprenticeship model. So it's a lot of hours under this appraiser. It's learning. It's tests. And a lot of times you don't even get paid when you're training. So what this company did differently was they opened doors to, people traditionally blocked out of the industry. So people of color, women, military and young people like myself.

00:02:17:22 - 00:02:37:12
Emma Henderson
And they actually paid you to get that appraisal license. And then they would help relocate you into markets, whether you're from there or just they had volume or somewhere that you wanted to go. And then from there, we expanded into a staff appraiser model at that old company. So once I got licensed, I moved into more of a leadership role.

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Emma Henderson
Management role. So I, took care of our north, northeast and southeast region of appraisers. I, made sure they kept up with their SLA. So our turn times are quality. And then just supporting the team, however they needed after a few years, on the appraisal side, I switched to AMC. So an appraisal management company.

00:03:00:07 - 00:03:33:03
Emma Henderson
We are a third party party between lenders and appraisers. So we manage that appraisal process. So from ordering, assigning, reviewing, quality control, we help make sure everything stays fair and compliant. And it was just a natural progression for me. So every department at AMC on board is run by a certified or licensed appraiser. So having that true, you know, boots on the ground experience in appraisal background, has just been invaluable, especially now, you know, working with lenders and understanding both sides of the process.

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Nate Carver
Wow. So right off to, to home buyers, first time homeowners. Imagine you're that person. What's the the one thing that you wish that homeowner or future homeowner could know about? What it is the appraisal process brings to them?

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Emma Henderson
Yeah. So, I mean, at at the simplest level, appraisers gives an unbiased, independent opinion of the home and what it's worth. I always like to explain, you know, we're not working for the home buyer or the lender. We are really an independent party. Our role is to protect that transaction, and make sure the home supports the loan that is being made.

00:04:18:16 - 00:04:38:13
Emma Henderson
So we look at comparable sales, the condition of the property, you know, location, market trends, everything that goes into the value of that home. You know, I also try to recognize that, you know, we are going into somebody's home. That's a very intimate process. We don't know what they're going through. You know why they're getting a refinance?

00:04:38:13 - 00:04:58:10
Emma Henderson
Why they're selling their home. You know, whatever situation that could be. So I always, you know, for myself and the appraisers that I use, represent, you know, come professional, come dressed nicely. You know, you are a representation of your borrower and real estate agent. And you do so know what that borrower is going through.

00:04:58:12 - 00:05:31:09
Nate Carver
Nice. So you mentioned a little bit on the refinance. So doing refinances or appraisals for refi. State of Texas you have to have an appraisal for any real estate transaction of of, of residency. So on those do there's a couple of scenarios. A homeowner may not be aware of. So if you're if you're buying a home, the the rules are the lender, the seller and the homeowner all have to.

00:05:31:09 - 00:05:52:22
Nate Carver
Or you have the seller and the buyer in the in the lender and the realtors. We all have to be at arm's length. From the appraiser. So can you talk to that? And I want to I think it's maybe a little different if you're you're a homeowner and you just want to get an appraisal, say, like you're doing you're fighting your taxes, maybe there's two different topics.

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Emma Henderson
There. I asked me that question. It was the question.

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Nate Carver
The it's my fault, I rambled. Okay. So yeah. So you have you have multiple interested parties in a transaction, purchasing a home and the rules are the, the all of us have to be at arm's length, from the transaction. So that's why we, hired through an AMC to get an appraiser. And that that is an anonymous to the lender and everybody else until the documents produced.

00:06:29:12 - 00:06:57:24
Nate Carver
And then we, we send, a payment portal over to the buyer, who pays for the appraisal for that person? Here's the question. What is it that. I guess the timeline to to get an appraisal generally, on a on a standard loan, what maybe could institute a rush and what could that look like?

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Emma Henderson
Yeah. So.

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Nate Carver
Oh.

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Emma Henderson
So typically, I think the length of the appraisal process.

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Nate Carver
Yeah. Like so from the moment they pay for it, how long does it usually take to get an appraisal and then return back to a lender?

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Emma Henderson
I got you. So it depends on the property. Typically at AMC on Gore we like to keep our timelines pretty tight. So below five business days. You know, for the appraiser, once that is scheduled, they'll go out to the property as soon as they can. And again, it depends on the property. So I can measure a 1500 square foot ranch, you know, in 20 minutes and take all the pictures and whatever it is.

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Emma Henderson
But let's say it's a more complex property in Highland Park. That could take a couple hours. But from there, that's not the majority of the work. You go back home to the office and you know you're pulling comps, you're analyzing the data, you're writing the report, and you're making sure, everything supports that opinion about opinion of value.

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Emma Henderson
You know, we for a rush, we we take care of our appraisers at AMC on where we make sure that we pay them every week. We pay them quickly so they it's more of a partnership with us. So that's when it comes in. Hey, I need a rush on this. Can you do it? And it's. You guys have been supporting me for this long.

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Emma Henderson
Yes. I'll do a rush for you guys. And again, it just the availability in that market as well.

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Nate Carver
Nice. Okay. And and so how about for someone that owns a home already or are they getting appraisals ordered. Maybe if they're contesting their property taxes. Is that something you're seeing or is that something y'all would work with too?

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Emma Henderson
Yes, it would be. We would do all different types of appraisals and, have inspections as well.

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Nate Carver
Right. Of course we're doing rfis. We do, we got to get an inspection or get an appraisal also. So. All right, I was curious on the the taxes because people, at least in Texas, when they're buying a home, if they're moving from out of state, they're in shock. Right. But I'm like, but we don't have an income tax, not in Texas.

00:09:16:22 - 00:09:41:19
Nate Carver
So a couple other states. So, all right, so how about, some, best practices that y'all do, communication wise with homeowners or future homebuyers? How do y'all set up, getting that appraisal to happen is that, you know, do y'all are y'all talking to the real estate agents or.

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Emma Henderson
Yeah. So it depends on, you know, on a, purchase transaction. Typically that would be through the real estate agent or some kind of platform for you to schedule that inspection. And then on a refinance, you'd reach out to the borrower or the homeowner, whoever's living in that house, to get you into the property.

00:10:00:17 - 00:10:26:18
Nate Carver
Okay, good. How about, are you seeing any misconceptions about, appraisals? Maybe FHA or, VA loans? I hear rumors about the way things were done in the old days. I always hear that. Oh, it used to be such and such, and, I don't know, I think we're addressing, you know, as an industry looking to get better and better, so.

00:10:26:18 - 00:10:31:24
Nate Carver
But how about on the appraisal side? Are you seeing any misconceptions there?

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Emma Henderson
Yeah. I think appraisals I don't want to say can be a dirty word, but it's just kind of not the fun part at all. You know, and I think there's a misconception that some appraisers or appraisals are there to kill the deal or whatever it could be, and that's not it at all. As an appraiser, we go through, you know, years and hours of this training for bias, and we really pull the market data for that home's value, not, I'm trying to think of the correct word for this, not, it's the market data.

00:11:06:22 - 00:11:25:24
Emma Henderson
It's not, you know, what we see when we go out to the property, the person that that the home, you know, that experience for us it is you know what the market's showing us what the house the condition of the house looks like. It's not those outside factors that I think some people, you know, have misconceptions about, right.

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Nate Carver
How about, have you have you run into, Tidewater events with the aliens?

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Emma Henderson
So I am not a VA appraiser that goes to the VA. And that's a whole different ballgame. But we do conventional FHA, you know, all of that up to VA.

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Nate Carver
Okay. Gotcha, gotcha. Let's see any, how about if, I guess, managing some expectations. So always look at an appraisal like every other asset of of putting a loan together is that is ultimately building peace of mind and a surety and assurances with the homeowners and the sellers. What, what are are you seeing anything trending in, in the appraisal world with homeowners currently that might might help, homeowners looking at their appraisal prospects or realtors when they when we're getting these things lined up, that would help mitigate some of the risk there.

00:12:32:05 - 00:12:54:16
Emma Henderson
Or taking those and like how to prepare for the appraiser to come out before the appraisal. Yeah, yeah. So what we're looking at when we go out to the property is the condition of the home. So, how that home has been maintained, the quality of the renovations that the, you know, the lot size, the the view, the near.

00:12:54:16 - 00:13:13:05
Emma Henderson
Is it near a school? Is it on a busy road? You know, all these different factors that go into a home. So I would say, you know, when the appraiser comes out, make sure they know, you know, what has been given, what has been put into the home. So even new AC and new Hvac, a new roof, some things that they might not see off the bat.

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Emma Henderson
You know, these are original hardwood floors. We just put in vinyl. There's a bunch of different things that go into the condition and quality of the home, that someone might not see right off the bat. So just making sure you have a list of repairs. Just information for the appraiser and making sure that they have all the information once they leave that property.

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Nate Carver
So it's it's totally cool if the homeowners there or the realtor, the listing agent is there or the purchasing agent.

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Emma Henderson
Yes it is. As long as they don't interfere with the inspection or, you know, give some sort of bias. Appraisers, they won't we won't take anything from you. As far as, you know, gifts or anything like that. We want to keep it as neutral as possible. That can affect our license and that can affect, you know, it won't affect that appraisal as as far as bias, but it could they could pull out of that assignment because there's some sort of bias if they feel that way.

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Nate Carver
Gotcha. All right. No bribery.

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Emma Henderson
Right.

00:14:11:00 - 00:14:29:10
Nate Carver
Yeah. Keep it on the up and up. Okay. What what's, some future trends in the appraisal world or anything on the horizon with y'all? I know the lending side of things change, but every time we get a new president or a new Congress or state legislatures, there's there's always changes.

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Emma Henderson
Yeah. So there's actually a really big change coming. There's a new form coming in the appraisal world. So this form that we've been, currently working on has been here since like the early 2000, in this new form called UAD 3.6 should be rolling out in the next year. And what that means for, borrowers and lenders, it's going to be a much more standardized form.

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Emma Henderson
So, it's gonna be easier to read. It's going to be, a lot more consistency across appraisals. So it's going to take away the, free form tax. So a lot of appraisers, you know, you fill in the box and then you go to the addendum and you explain what you did. It's going to take that out.

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Emma Henderson
So there's going to be much more standardized and consistency across appraisals in properties.

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Nate Carver
Oh good. Nice.

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Emma Henderson
Yeah. It's gonna be it's going to be good. It's going to be, learning pains and growing pains.

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Nate Carver
But I'm sure we'll, we'll we'll do it again. It will come back on and do a, an update on the UID 36 and.

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Emma Henderson
Right.

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Nate Carver
In and get that out there. Good. I, I like that same on our. So we're all holding our breath to see what comes of the Cfpb. Consumer protection. Consumer protection. Financial Bureau. Anyway. Yeah, it's been defunded, still enacted. The laws are the laws. So we'll see lots of changes coming. Any advice? Let's see.

00:16:00:23 - 00:16:17:18
Nate Carver
So your homeowners. So, we come back to the the preparation of the property, really clean cleanliness, you know, mold yard, that kind of thing that really helps on appraisals, making sure everything is repaired and.

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Emma Henderson
Yeah, I would say more towards the repairs. You know, we're we're going to take pictures of your home. You don't really care how tidy it is, but as long as we can, you know, see everything, get a feel of the condition of the home, that's what's best. You know, if you have some socks on the floor, it's going to be okay.

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Nate Carver
What? Here's one for you. So I, I have this debate in home values. I'll, I'll see a house that someone's selling and they've gone in and put in travertine counters, kitchen counters. And whereas that's beautiful. They're wonderful countertops. But then you may have somebody else. Same property, square footage, same neighborhood. They may have, linoleum or does that matter?

00:17:09:18 - 00:17:30:21
Nate Carver
Significantly in the valuation of a home. Okay. I know you could overvalue a home for what the market would bear, but how as far as an appraiser goes, are they looking at that and going, oh, this is marble. Oh, this is tile? Or did they just go, oh, it's got a floor. You know, it's.

00:17:30:23 - 00:17:35:04
Emma Henderson
And now we look at the quality of the materials that are in that home.

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Nate Carver
Okay.

00:17:36:12 - 00:18:05:10
Emma Henderson
So I'm trying to give an example like. Vinyl floors as compared to, you know, real wood floors. That's going to make a difference. I'm not saying it's going to, you know, put your house exponentially over your neighbor, but it is something that we take into consideration for sure. And, you know, double pane windows super compared to single pane or, you know, carpet versus just I'm, I'm trying to get this thought together.

00:18:05:12 - 00:18:11:06
Nate Carver
That's all right. This is live. We're doing great.

00:18:11:08 - 00:18:14:06
Emma Henderson
I wasn't thinking too much. And then I'm like, oh my gosh, what do I do?

00:18:14:06 - 00:18:16:21
Nate Carver
No, you're good, you're good. This is real.

00:18:16:23 - 00:18:23:11
Emma Henderson
But yeah, the quality of the materials, do play into that value of the home.

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Nate Carver
Okay. Shift gears. So let's say we get an appraisal back. I'd love being able to give great news to home buyers and sellers. You know, their home appraised higher or at as far as loans go at or better, you know, and right. Let's say let's say we've got a home and they've got it on the market for 450.

00:18:44:18 - 00:19:08:23
Nate Carver
We've got a contract to pitch it to purchase it at 450,000. Let's say it comes in under value or under that appraised value. There's some options there. I'm curious if you could speak to that for a little bit. For what could buyers or, or sellers do if their valuation the appraisal comes in lower than an expected.

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Emma Henderson
Yeah. So there's always an option to challenge an appraisal. It's called a reconsideration of value. And this is going to be where you submit additional data, or comparable sales to the, AMC. And then in who would help you with that process would be your buyer's agent or your lender. They can walk you through that process.

00:19:31:17 - 00:19:45:18
Emma Henderson
And then they would work with us, the appraisal management company, to work with that appraiser. Just to make sure they have that data. I'm not saying they're going to use it, but, they can take a reconsider or relook at that appraisal.

00:19:45:20 - 00:20:02:08
Nate Carver
Okay. So is it the does that appraiser have the final say or is there oversight to help ensure in that case that that maybe it's either correct or it needs to be adjusted? Is that fair.

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Emma Henderson
Yeah. So the appraiser does have the final say. Usually what they would do if they, you know, agree they can add those comparables in or add, you know, maybe they didn't catch the new air conditioning, the new roof or whatever it might be. They can put that value back into the appraisal. Right. And if they don't then they would explain why they did not, and those reasons, you know, being why that comp doesn't make sense because it's, you know, five miles away or, you know, they would need to explain themselves though.

00:20:31:12 - 00:21:05:01
Nate Carver
Right? All right. And as a lender, just, you know, we have tools. We have tools for if they don't know. Right. And we got tools for that over. There's all kinds of neat little things, that a good lender can do to help structure a loan. To win. We just had one. It appraised the home, appraised $40,000 above ask price in the contract, and we were able to go in and restructure the loan so that she didn't have to do a down payment assistance program.

00:21:05:03 - 00:21:31:16
Nate Carver
And, you know, thanks to the appraisals, the thanks to the appraiser. And we now had a valuation on this property, I was able to go we're able to go back to the seller. So there's a hey, we can increase the price are a builder. So they're now they have main they have a value of their home that they have built on the market at a higher price point, which is great for them.

00:21:31:18 - 00:21:53:23
Nate Carver
The seller you know, so the seller is going to get a little bit more. The homeowner is going to in in this case with getting rid of the down payment assistance is now got a much lower monthly payment, because we were able to raise price and leverage that for, a seller's concession. And both realtors got a little bit more on their commission check.

00:21:54:00 - 00:22:00:07
Nate Carver
It was a win for everybody. And it would have happened. Yeah, it would have happened without the approval.

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Emma Henderson
That's right. Having a great lender comes in knowing how to, you know, restructure that for them.

00:22:04:14 - 00:22:14:19
Nate Carver
That's right. And I'm so happy I could. That phone call was the year to date was the funnest phone call. She's a first time home buyer. Single mother.

00:22:14:19 - 00:22:16:13
Emma Henderson
Oh, I can imagine.

00:22:16:15 - 00:22:37:12
Nate Carver
And that was that was a wonderful call to make. So I'll go to the appraiser and, otherwise, we I mean, we had a plan. We had a great plan put together, but then we got an even better deal. And so, all right, what the appraiser did for us. So that, my friends, why, you definitely want an appraiser on your team.

00:22:37:14 - 00:22:47:19
Nate Carver
So let's see for you first time buyers, any advice to a first time buyer on the appraisal?

00:22:47:21 - 00:23:06:05
Emma Henderson
I mean, I think I'm going to sound like I'm repeating myself, but again, you know, we're not here to, we're not here to scare you. You know, we're here to make sure you're not overpaying for that home, you know, and give you confidence in, that the loan is properly secured by your properties, you know, market value.

00:23:06:11 - 00:23:16:05
Emma Henderson
So it's just we're a safeguard for both sides. You know, especially, you know, as a first time home buyer, emotions are running high. You know, where they're to protect you.

00:23:16:07 - 00:23:28:05
Nate Carver
Nice. All right, Emma, we're almost out of time. So I want to ask you one. Is there anything that I should have covered that did that I didn't ask you that put you on the spot?

00:23:28:07 - 00:23:47:13
Emma Henderson
Yeah, I know you did. I think the main thing, you know, again, I'm going to be repeating myself is just don't stress. We, you know, appraisers, most of us have been doing it for a really long time. You know, they, they go into many homes. Your home is not messy. It's going to be okay. And again, we're here.

00:23:47:15 - 00:23:54:03
Emma Henderson
We're here to protect you. We are here to make sure that your property is worth what it's supposed to be good.

00:23:54:05 - 00:24:11:01
Nate Carver
And what is the best way for lenders, realtors and homeowners? To get a hold of you if they want to either coordinate with the AMC, and or need an appraisal of the property.

00:24:11:03 - 00:24:26:04
Emma Henderson
Yeah. So, AMC Oncor is our appraisal management company. You can find us at AMC oncor.com. My name is Emma Henderson. VP of client relations. My email is Emma Henderson at AMC on gore.com.

00:24:26:06 - 00:24:33:22
Nate Carver
Excellent lamb. Thank you for meeting with me. What's next for you?

00:24:33:24 - 00:24:45:23
Emma Henderson
Not much. We have the 4th of July is coming up, so I'm excited to spend some time with my family. And then, you know, back on the road going to some conferences later this summer. I'll be. I'm Western secondary.

00:24:46:00 - 00:25:09:13
Nate Carver
Okay. Good deal. Good deal. Well, thanks for meeting me. Folks, that's going to wrap up another episode of Between Two Doors. Appraisals. You're gonna need them. You're going to want them. They are looking out for you. And, if you need any lending advice, you are welcome to reach out to me at Nate Carver. Dot com and links down below, for Emma and myself.

00:25:09:13 - 00:25:11:12
Nate Carver
And we will see you on the next episode.

00:25:11:19 - 00:25:14:00
Emma Henderson
Bye. Thank you.

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