Appraisals are slower and more expensive than ever. What’s up with that?
Why do you hire a Realtor? Because things change in the market ALL of the time.
It is what keeps it interesting for people like me who like change. Not all change, ( I do not particularly care for loose change – I gotta jar for that) but most change keeps things from getting dull and static.
So the latest issues we are having are with appraisals, and/or appraisers.
This is a function of a system in Oregon that makes getting licensed to be an appraiser very time consuming, expensive and difficult. And the regulations put on them by legislation what was passed in the wake of the financial meltdown of the mid 2000s, such as Dodd-Frank, made filling out the paperwork onerous, and put appraisal management companies in as middlemen who take a cut of the appraisers money.
The main hurdle is that appraisers must do an apprenticeship with an existing appraiser. But with the existing system, there is not incentive for an appraiser to take a new person under their wing. It basically just costs them more time, and there is no personal benefit. So at this time, it is my understanding that there are very few appraisers waiting to come into the system. Too much red tape, and not enough profit.
Add that to appraisers retiring, and business being very brisk at the moment, there aren’t enough people for the job.
Which leads to 3 big things I am seeing.
1. The average appraisal in our area right now is out almost 4 weeks, and compared to other areas of the state that is actually good. If you are looking in Klamath County, it is closer to 8 weeks
2. Appraisers are cherry picking the easy appraisals, and passing on the more difficult ones. What appears to be happening with the difficult ones then is they fall to the bottom rung of appraisers who are so bad at their job that they can’t get hired unless no one else wants it. So the hardest appraisals are going to the least qualified appraisers.
3. Lenders are offering extra money (charged to buyers generally) to get their appraisal picked up quicker. So they add a Rush charge of a couple hundred bucks. But that just pushes out the buyers who are waiting their turn longer, and to compete they have to pay more money.
Okay, so that was just sort of complaining. What can we do about it is the question. Knowing that it takes 45-60 days to close a house with a loan is one thing. Added patience is needed.
Ordering the appraisal as quickly as possible. This actually hurts potential buyers, because they could pay for an appraisal on a house, then discover that the foundation is bad. I like to have inspections completed before spending the money on the appraisal, but that is getting harder to do in this market.
We as Realtors have been working on this issue with the legislature and the Appraisers board to try to solve if for a couple of year now.
But what we need are consumers who have been hurt by this challenge to complain to their legislators and work on getting a fix. Because as the appraisers keep retiring, this problem is just going to get worse.
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