How appraisers overcame the challenges of the pandemic

As members of a profession that relies to a significant degree on being able to conduct detailed, in-person property inspections, the hurdles that faced Canada’s appraiser community at the onset of the COVID-19 pandemic were formidable.

Stay-at-home orders and social distancing restrictions came into play across the country as activity in Canada’s housing and mortgage markets began to ramp up dramatically, presenting a variety of new challenges for appraisers to overcome – not least correctly assessing the value of a property without being able, in many cases, to enter the premises.

That necessitated a “creative” approach to the job, according to Home Value Inc. president Gordon Sommerville (pictured top), who told Canadian Mortgage Professional that appraisers deployed a range of techniques to perform their role effectively during widespread public health restrictions.

“Our lenders still wanted us to have a really good insight into the property, but they did recognize that going in people’s homes was not appropriate at periods of time,” he said. “So generally, we did what some people called a hybrid appraisal, where we would personally visit the outside of the house property and measure the improvements.”

To assess the inside of a property, appraisers would often provide a camera at the door to the owner or representative and ask them to take pictures of every room and the mechanicals, Sommerville said. Sometimes they would record a Zoom-guided tour from their desks, allowing them to virtually inspect the property and direct the person who was holding the phone or camera to focus in on specific parts of the interior.

Read more: What challenges are appraisers facing at present?

Where possible, and if the other party was comfortable with it, appraisers would also enter the property wearing masks and conduct as quick an inspection as possible using the so-called “touch-free” method.

Appraisers may have breathed a sigh of relief when restrictions began to ease and in-person inspections once again became possible, with hybrid arrangements a necessary but inferior substitute for live inspections, Sommerville said.

Still, he emphasized that his company maintained a flexible approach where the virus might still be an issue in certain properties.

“As restrictions tended to ease, we started going back into the property. We’re respectful of anybody who said, ‘We’ve got COVID,’ or, ‘We’ve been exposed, you shouldn’t be coming in’,” he explained. “In those isolated cases, we definitely went back to the hybrid of inspecting the exterior of the property and then being creative in order to see the interior and show our lenders in our report.”

Of course, while restrictions have lifted and life across the country is back to some degree of normality, the pandemic is by no means over – and appraisers have grappled with that reality, not least with members of the profession contracting the virus and having to take time off work as a result.

That can be taxing, Sommerville said, especially with activity in the market having remained red-hot until a cooldown took effect in recent weeks.

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Ultimately, the ability to adjust, and find inventive solutions to the pandemic conundrum, has set appraising in good stead for the future, even if Sommerville maintained that it’s difficult to replicate the rigour of an in-person inspection.

“Appraisers would prefer to go in. You can appreciate how good or not… the improvements are by being there firsthand as opposed to seeing them in pictures,” he said. “But there will be times when the hybrid [is required]. It looks like COVID-19 is not going anywhere fast, and we’re going to have to be open-minded in dealing with people that have been exposed.”

One development that would represent a positive step for appraisers would be exclusivity agreements between mortgage brokers and their clients, said Sommerville, similar to buyer representation agreements currently in place in the real estate world.

“We find the administrative part of our work has become very challenging, not because of COVID so much as because of multiple mortgage brokers competing for the same client in the same property,” he said.

“My wish would be that mortgage brokers would have a similar commitment from their client [to real estate professionals]. That way we would not [experience] the administrative challenges we get, which is [that] Broker A places an order for an appraisal; two days later, Broker B is placing an order for the same appraisal, for the same applicant, for the same property.”