Delay in getting home appraisal report
October 26, 2011 1:13 PM   Subscribe

We're in contract to buy a house. It's taking forever to get an appraisal. What's going on?

My wife and I are in contract to buy a house in California. It's a simple, 2-bedroom SFR. We've been in contract for 35 days now. The original date to close escrow was today, but we've had to get multiple extensions.

The sole problem is in getting the appraisal report. The mortgage broker says he ordered it three weeks ago. I was originally told it would take 3-5 days to get a report. Now, three weeks later, we still haven't been given an appraisal report.

Just about every day, the mortgage broker tells us the report will come tomorrow. Each time, there's some problem why it hasn't been delivered. E.g. it was sent back for more QC, it was updated, etc.

I'm becoming suspicious that the appraisal came back low, and the broker is trying to re-jigger it or getting a different appraisal to try to get the deal to go through. I've raised this concern with the broker and my agent, and they both insist that the rules would prevent them from doing this.

What's going on? Is it normal to take three weeks to get an appraisal report on a simple 2-bedroom SFR? Or is someone engaged in some kind of shenanigans?
posted by mikeand1 to Work & Money (12 answers total) 1 user marked this as a favorite
Nope. It's not normal.

When I got the appraisal on my house, I contracted separately with an appraisal company of my choosing. You might see if that is an option. It cost me about $500 out of my own pocket, but I didn't have to pay that in closing costs, obviously.
posted by SpecialK at 1:16 PM on October 26, 2011 [1 favorite]

Appraisers are busy these days because there is a lot of refinancing happening, but I agree this seems odd. Getting your own appraiser is a good idea. And you did have your home inspected by someone you chose, right?
posted by underthehat at 1:18 PM on October 26, 2011

Response by poster: Are you sure you can choose your own appraiser in CA? I had the impression the appraiser had to be chosen randomly, and there's some third party between the mortgage broker and the appraiser. We're already paying for the appraisal, so if I could handle it myself, I would.

We did choose the inspector, yes.
posted by mikeand1 at 1:22 PM on October 26, 2011

Possibly shenanigans. But possibly by the bank/lender, not necessarily the broker. Lowball appraisals are a huge problem everywhere, and that could be the case here. But from what I hear, lenders are being super conservative with underwriting in general, and a lot of appraisals are getting reviewed more than once and sent back to the appraiser with requests for additional detail. It's true to a degree that brokers have less direct influence over appraisals now, also. Unless you're going through a local credit union, they're probably dealing with an appraisal management company and can't even talk to the appraiser themselves.
posted by Diablevert at 1:24 PM on October 26, 2011

Get a new mortgage broker, or at least threaten to get one.

If there's a real problem with the lender, they should have let you know weeks ago. It's got to be incompetence on the part of the broker, or whatever appraiser they use.
posted by miyabo at 1:27 PM on October 26, 2011

Oh, in re the choosing your own appraiser business --- the Dodd Frank financial reform act of last year created a whole new set of regs about who can and cannot talk to appraisers. Not sure if you'd be able to do it yourself these days -- after all, the appraisal is to protect the bank, not you. You could have your own done and contest what the bank's guy said, but they don't have to listen.
posted by Diablevert at 1:28 PM on October 26, 2011

Response by poster: Right, the mortgage broker says they're using an appraisal management company that prevents them from communicating with the appraiser. I'm wondering if that's really the case.

I'm reluctant to get a new broker and start over. For one thing, we managed to lock in a really low rate, right when mortgage rates hit a bottom about a month ago. Would I lose the lock?

BTW, the lender is Wells Fargo.
posted by mikeand1 at 1:32 PM on October 26, 2011

Right, the mortgage broker says they're using an appraisal management company that prevents them from communicating with the appraiser. I'm wondering if that's really the case.

Short answer: yes, that is quite likely to be true. Memail me if you want the long answer.
posted by Diablevert at 1:37 PM on October 26, 2011

Response by poster: To clarify, I don't doubt that they're using a management company, it just isn't clear to me that that would absolutely prevent them from influencing the process?

And if it's the lender that's engaged in shenanigans, how do I find out about it? Do I have the right to talk to the appraiser at some point, e.g. after the report issues?
posted by mikeand1 at 1:41 PM on October 26, 2011

This happened to us - the bank kept telling us they were calling every day to check , but I wasn't allowed to call the appraisal company (despite the fact that they were providing a service I had already paid for); the bank couldn't call the actual appraiser; the appraisal had to go back multiple times for "quality control". It eventually came back less than we offered, and we renegotiated the price. It took forever, and phone calls every day of me threatening to find another bank, but really, that just meant starting all over again - and paying for another appraisal. It was not a fun process, and there seemed to be nothing I could do aside from complain to the bank's management to hope they never used that company again.
posted by dpx.mfx at 3:39 PM on October 26, 2011

I sell manufactured homes. The vast majority are FHA land and home mortgages. Taking that long for an appraisal is not that unusual in the least. We have had quite a few take weeks to be done. While we have had quite a few take 3-5 days, they don't all get done so quickly.

Could be being busy, could be having problems getting the comps needed, could be they were not given all the info needed upfront, could be a ton of things.

One problem is the fact that the appraiser is chosen on a blind-random system. The appraiser who works hard and fast gets no better treatment than the appraiser who sits on his ass and throws
an appraisal together. This is all done in the lawmakers mind to protect you from shenanigans.

Don't always blame the lender. The lender can't choose the appraiser. They are just as frustrated as you but times 100 for all the other borrowers who are upset about the delay. You go to a different bank and it will likely still go through that same appraiser management company.

Also on FHA mortgages the appraiser is assigned the appraisal and going to a different lender will mean you still have to use the same appraiser from the previous lender.

It is just part of the current problem. Grin and bare it and be glad that you only have to go through it once
posted by 2manyusernames at 3:46 PM on October 26, 2011

I just bought a house last month. We had similar delays. Our mortgage banker said they are very backed up on appraisals right now and there is far more oversight to make sure they're accurate than the house bubble's "drive-by appraisals."
posted by phritosan at 4:49 PM on October 27, 2011

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