New Appraisal Process is a Headache

Changes were made to the appraisal process in order to enhance the independence and accuracy of appraisers, but they are actually doing the exact opposite. Some appraisals are causing stress for everyone involved in the transaction.

The problem centers on how the appraisers are chosen. The Mortgage Broker can no longer choose the appraiser. In the past appraisers came from a local company and would be familiar with the area. Today appraisers are hired through an appraisal management company that acts as the middle man and generally hires the cheapest option, even if they’re unfamiliar with the area.

Appraisals are coming in less than the agreed upon price, which is causing the seller to pay for additional appraisals in order to prove their home’s value. This addsstress to the sale and some deals even  fall apart.

In a recent survey conducted by the National Association of Realtors, 70% of realtors have recently seen out of town appraisers and longer appraisal times. One third of these realtors has lost at least 1 sale due to the delay of the appraisal process.

The National Association of Realtors is pushing Congress to suspend the new rules until the problems are ironed out.

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