Appraisal Delays are happening!
Good morning, Shana Acquisto. Party of one Acquisto Real Estate broker here to talk about appraisal delays. Ok, so. There have been many instances over the last month of appraisal delays, and we want to talk about that, so if you have a lender in your loan, you have a loan and it is subject to an appraisal. Ok, so it’s not just the value anymore. It’s if the appraisal actually gets done.
So what we’re seeing is we’re getting past buyer approval and then we’re getting into the property approvals portion of the contingency.
And the appraisals are not being picked up by appraisers. So the lenders ordering an appraisal and it’s just sitting out there waiting to be picked up and be completed. So what happens in this situation? Well, it causes delays. And you would think, well, if the lender can’t get the appraisal, then I just have to extend. Everyone should be willing to extend. But that’s not the case.
Ok, so this is becoming a huge problem. And if you think that you’re just automatically going to get extended, that’s not you need to not think that way. So what is happening is when a lender orders an appraiser appraisal, they send it out to an AMC. And AMC is an appraisal management company.
And unless a bank can really prove that their process is accurate and there’s no bias going on, they’re going to utilize an AMC. To get this to assist them in getting this appraisal completed. So what happens there? What we’ve noticed is the AMC. Is not paying the appraisers properly.
So let’s think about this, as you guys know. My my dad was an appraiser appraiser, and he ran around like a crazy person and would drive miles and miles and miles for three hundred dollars. Four hundred dollars for an appraisal. So when that goes out to the the pool of appraisers, they will let them know how much they’re willing to pay for this appraisal.
So you can understand that if I’m an appraiser and I’m looking and somebody wants me to go to Weatherford, which could be an hour, hour and a half away for three hundred twenty five dollars, probably going to pass on that because the market is crazy.
And there’s so many needs for appraisals right now that appraisers are not going to pick those up. So, you know, this is where the delay comes in. So if you have something local and it’s easy to get to probably going and not have much of a problem picking it up. But as you kind of go out on the outskirts of town, you’re going to start to see a delay. They’re not going to want to pick it up. I personally think that they should be paid more.
This is a huge factor in obtaining a loan. They’re putting in a lot of work to do this, they are a professional, a licensed professional. I firmly believe they should get paid more. Just saying so. Something else I’ve seen is the AMC may pay the appraiser three hundred twenty five dollars, but they’re charging your client, you know, six hundred twenty five dollars.
It just doesn’t seem right either. So that’s a whole other subject. But I just want to make you guys aware that this is not an out of the contract just because the appraisal can’t get done. You know, you still have a closing date to adhere to. So, you know, we need to be proactive here. So how do we avoid this from happening? Well, you need a local lender.
You know, and I understand that there’s the the rocket mortgages and in some of these online companies that may look appealing, it may give you an approval with a great interest rate. However, it can cost you greatly if you can’t close on time. So we need to make sure that you have a local lender. This is a question that I would talk to your client about on the buy side and make sure. Do you have a local lender? If you don’t, let me explain to you what situations we could run into.
Ok, if they don’t have a local lender, then you need to contact and be a part of the process of discussing this with their lender to let them know, hey, is this going to be an issue or are you having problems with appraisers picking up the orders for appraisals? Because if so, we need to figure this out and be proactive to avoid this from happening.
Don’t just wait for it to happen. We need to be proactive. Ok, so local lender, I think is best. But even with your local lenders and your local banks, please understand this is a problem and have these conversations. Ok. It’s really good for you guys to all understand this process and how it works. So you can avoid these delays and costly mistakes down the road. Ok. All right. Ed said on that.