Appraisals: Still A Problem

Appraisals: Still A Problem

Brokers say Appraisals cause problems with 35% of sales

Wow. Appraisal issues continue to be a problem according to the latest Realtors® Confidence Index Survey.  Realtors® surveyed said delays, lower sales prices, or cancellations occured in 35 percent of recent transactions.

appraisalsDoes that mean you have a 1-in-3 chance of experiencing some kind of appraisal-related “glitch” in your home sale?  Sounds that way – especially in Colorado with the new inspection disclosure requirements.

Looking at the pie-chart, and assuming you’re not one of the lucky 65%, you’d probably prefer a delay over either a lower sale price or a cancellation.  Start by setting realistic deadlines and do your homework in advance of the appraisal.

3 ways to Do it Right:

1.  Pick a realistic “Appraisal Deadline.”  Buyers aren’t expected to order the appraisal (it’s expensive) until after the inspection (expensive) is completed and resolved in writing.  That could easily take 7-10 days. After the appraisal is ordered, lenders are telling us it will take 5-7 business days to “get it back.”  And that’s when the lender sees it, and you know if you have any problems. So don’t make the mistake of creating an unrealistic “deadline” which could make the contract easily voidable.  Bottom line: give it 3 weeks minimum.  Then if there’s work to do, you’re more likely to have delay and not a cancellation.

2.  Write the Inspection Resolution on a separate Amend/Extend form.  The objection form isn’t meant to be part of the contract, and
it is not within the normal scope of work of an appraiser to perform an inspection of tangible property and tangible property components in the manner comparable to an engineer, home or building inspector. (DORA, Colorado Board of Real Estate Appraisers, Nov. 19, 2012)

3.  Do a good job selecting and analyzing comps to support your value. This will not only result in a faster and higher sale, but comes in handy later:  appraisers really do appreciate useful corroborating information from the brokers.

 

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