Trying Times for Appraisals
In this unparalleled time, we are experiencing prolonged turn times for appraisals across northern Michigan, and in fact across the country.
I thought I’d share a bit of info regarding these delays.
To start, here is a quick anecdote from a couple weeks ago. The appraisal management company had 12 appraisal orders to be filled in Antrim County and sent emails to 43 appraisers who do appraising there. They received 6 responses to accept assignments, 6 responses who said they might accept, but would not be able to complete reports until late November to early December, and NO responses from the remaining 31 other appraisers.
There are a multitude of factors are contributing to this appraisal dilemma:
• The sheer number of appraisals that are being requested (a nationwide problem)
• There are a finite number of appraisers in northern Michigan.
• Appraiser attrition – many appraisers have exited the business for a variety of reasons.
The average time to complete an appraisal has increased from an average 3 hours to 5 hours per report due to the increased rules and regs requiring underwriters to request more information that keeps them in the office rather than out in the field.
Appraisers are being very picky as to choosing assignments, i.e., quirky properties that present difficulties finding suitable comps for, have multiple acres, and the more remote properties are less likely to be accepted promptly. They may also come with a premium attached.
Fewer people entering the profession; Appraisers are required to have 200 hours of pre-licensure appraiser education courses and college-level courses, 1,500 hours of experience in no fewer than 12 months and 28 hours of Con-Ed for every 2 years of licensing after the first renewal. That’s a big commitment AND most appraisers do not want to take on an “apprentice” as they see that person becoming a competitor soon.
FHA and VA appraisals may take longer than 30 to 45 days as the appraiser requirements are more stringent and the appraiser must be “approved” to complete FHA and VA appraisals.
Be prepared to have the appraiser come back with a higher price than normally might be charged.
The takeaway: Be patient and be realistic – let all parties know what to expect. What would normally be a slam dunk to close in 30 days may now take 45 or even 60 days – build that in upfront rather than hoping for an extension later. As lenders and Realtors, we may want to have this conversation with our buyers and sellers so that realistic time frames for closings may be set. A delay may not occur on all orders but be prepared in case there is one. Talk to your lender to discuss realistic timelines to ensure happy closings.
As always, thanks for your business and please let us know what we can do to help support your business.