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Five Ways Appraisals Can Be Delayed

How consumers can better understand the appraisal process, including the reasons for potential delays.

Lenders may be asked to hire an appraiser with specific expertise and professional affiliations.

Consumers eager to buy or sell their homes might find waiting for the appraisal to be stressful. Appraisers want to serve their lender clients as professionally as possible, but they might face roadblocks.

Here are five ways that can explain why an appraisal might take longer than expected to complete:

1. Research and analysis…

An appraisal requires much more than looking at similar houses in the neighborhood and developing an opinion of value.

For a reliable, credible report, an appraiser researches the property, inspects the site, investigates comparable sales, talks with local government offices, analyzes tax information, MLS data and zoning information — among many other tasks.

These steps take time and shouldn’t be rushed. A valuation that is rushed could result in errors and delay the transaction more.

A valuation that is rushed could result in errors and delay the transaction more.

2. Paperwork…

Federal reforms implemented in response to the mid-2000s real estate crisis have increased paperwork. Underwriters require more photos and property details that potentially slow down the valuation process.

At one point in time, an appraisal report could be completed in a few hours, but now it can take days. In the case of commercial properties, it can stretch into months.

3. Federal regulations…

To reduce the possibility of collusion between loan officers and appraisers, lenders must now work through third parties (such as appraisal management companies), which often randomly assign appraisers.

This means the appraiser could have no experience with the property type or local market, which can lead to errors when developing opinions of value for the subject property.

4. Fewer appraisers…

Valuation is a graying profession with many appraisers nearing retirement age. According to Appraisal Institute research, the number of licensed U.S. real estate appraisers dropped about 20 percent between 2007 and 2014.

Statistics also indicate that new professionals are not entering the field at a rate sufficient enough to replace the ones leaving. Some parts of the country might not have enough appraisers to complete assignments on a timely basis.

5. Errors and scheduling…

Sometimes a delay is caused by routine errors or situations beyond anyone’s control. Maybe the appraiser is unaware of a major renovation that might impact a home’s value, or the house is not in the same condition as the comparable sites, which requires more research.

An appraisal also can be delayed by the weather or inability of the appraiser and the property owner to set a mutually agreeable time for the appraiser to visit the property.

Appraisers are as eager to provide reliable, credible reports in a timely manner as consumers are to receive them.

Appraisers are eager to provide reliable, credible reports in a timely manner.

However, the steps required to develop an opinion of value — in addition to new regulations, changes within the valuation profession and human error — are among the causes for delays. By sharing this information, real estate agents can reassure their clients and make them more at ease with the valuation process.

Consumers can request that lenders assign an appraiser who holds a designation from a nationally recognized professional association, such as the Appraisal Institute. Appraisal Institute Designated members can be found using the association’s find an Appraiser search tool.