Appraisals & Loan Processing in the COVID-19 Crisis Business as (Un)usual

With the coronavirus/COVID-19 pandemic throwing the brakes on so much everyday economic activity, the nation may be teetering on the verge of recession as governments and financial institutions attempt to control not just the spread of the disease itself, but its long-reaching economic impact as well. 

Among those watching the markets and trying to keep transactions moving while protecting themselves against infection are buyers, sellers, brokers, banks, appraisers, and other parties crucial to the processing of mortgages for co-op and condo units. They’re all navigating a profoundly altered landscape without much of a roadmap. 

The Front Line

Jonathan Miller, President of Miller Samuel, a prominent national real estate appraisal firm based in New York, says his team recognized the problem early on. “Several weeks ago, as news of the virus spread,” he says, “we asked our office staff to work from home as they saw fit. Now we have a policy that when we get an order for an appraisal from a client”—usually a bank—“we call the owner of the subject property, and if the owner is willing, we do an inspection with the proper precautions.” Those precautions of course include a mask, gloves, and hand sanitizer. “Over time,” Miller says, “it’s become obvious to both the lenders and to us that sellers are at least as concerned about contamination as we are.”

Miller goes on to say that he has suggested to lenders and other clients that his firm could do drive-by or exterior inspections on a contingent basis, with internal inspections to be completed at a later date. So far, however, lenders have been lukewarm on this idea—perhaps due to legal requirements around the inspection process.

Precautions aside, Miller candidly points out that considering the growing severity of the crisis, asking an appraiser (or anyone, for that matter) to come into close contact with other people in unmonitored spaces puts the appraiser, the unit owner, and anyone doing a site inspection for whatever reason in harm’s way. Doing so in order to maybe save some money on monthly mortgage payments is not without ethical implications.


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