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Some lenders have decided not to list appraisal cost because it is a "third party cost" not set by the lender. Other lenders and brokers can or will use "lender premium pricing" to pay this and other loan related costs for the borrower - thereby lowering the total loan expenses as reflected in the quote. The problem is that the prospective client does not know which it is, when looking at the quote summary, leading to an inaccurate comparison of lender fees. Further they may not know of this added expense, unless it is specifically mentioned in the lender comments.
I would suggest the Zillow policy be changed to:
1) Require estimated appraisal cost to be mentioned as an estimated cost, if the borrower will be paying it, or with the Zillow stated policy being that if it is not there, the lender will pay it. ...or
2) Require it to be listed, or not, but have a checkbox indicating if the broker will be paying it for the borrower. If it was being checked as paid for them then it may, or not, be shown, but in any case would not be included in total lender fees, thereby making the summary quote comparisons more accurate.
The system as it is now leads to confusion as to what the borrowers true costs are, and gives a competitive advantage in regards to "lender fees" to those who currently are not listing it ...but also are not paying it for the borrower. This becomes an "O by the way" fee in the posted quote at best ...and an undisclosed cost at worst. Users of Zillow, both Borrowers and Lenders, deserve better transparancy for both consumer disclosure reasons, and a for a fair comparison of offers among lenders.
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Keith, see this thread in the ZMM forum.
Thanks for the heads up.
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