A growing concern with appraisals has impacted Bend OR real estate transactions within the last few months. The concern does not revolve around the value of the property, but instead, whether or not the home can be evaluated by a licensed appraiser within the time allotted within the contract. Changes to lending requirements implemented last October due to federal regulations (i.e. TRID) have extended the timeframe for most home buyers using a loan to purchase their property. Escrow timeframes under TRID have increased from 30 days to 45 on average. Real estate professionals have adjusted to the lengthened timeframe for most property purchases when loans are involved to accommodate TRID requirements. However, the newest problem, just seen within the last few months, involves appraisals. Home values in the Bend real estate market are rising and appraisals, in general, are coming in fine with the value the appraiser assigns to the property. However, the timeline for the appraisers to conduct their evaluation is becoming a real problem. During August, over half of Bend Premier Real Estate's transactions involving loans were delayed due to appraisers not completing their appraisals within the time allotted. Even when the appraisal is ordered as soon as the deal is ratified, it is taking 6 to 8 weeks for the appraiser to actually evaluate the property. For those buyers with VA loans, the appraisals are often out 3 to 4 months.
So what is the problem? Sadly, it appears there are not sufficient numbers of appraisers to meet the demand. Appraisers go through a lengthy education and then an apprenticeship program before they are certified to conduct business themselves. Current appraisers do not appear to be willing or able to take on an apprentice, and not enough new people are entering the field and taking the education courses required. VA appraisers have additional training and there are just a few of these to handle VA loans over 4 Central Oregon counties. For buyers, the frustration of appraisal delays are triggering "rush appraisals" at inflated costs (in excess of $1000) to get the appraisal completed within the contract timeline. For sellers, in a hot market such as what we have been experiencing, when given multiple offers on their home, they are far more willing to go with the cash offer over that involving a loan, even if the offered price may be less.
Until there is either a change in the market (i.e. a slowdown) or more people become licensed appraisers, it does not look like this situation will be rectified. We should anticipate longer escrows with more frustration for all parties.
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