Wednesday, September 28, 2016

Shortage of Appraisers and how to plan as both a buyer and a seller

Cell/Direct:  (301)943-4370

Part of the sales contract includes the option of having an appraisal contingency. When getting ready to write or review an offer, depending on whether I am on the buying or selling side, I ask the lender how many days the appraisers he/she works realistically need to to complete this contingency to make sure it is in line with what is on the contract.

As you can see from reading this article, there is a shortage in appraisers which is often resulting in delays during a sales contract period so it is extra important for sellers to do as much upfront diligence on a buyer to make sure they are qualified financially to buy their home before accepting a contract as sellers should have it in the back of their minds that as a consequence of the shortage of appraisers, the contract period may take a longer time.

Some buyers try to wait until after the home inspection contingency is fulfilled before giving their lender the green light to order an appraisal but doing so can put the buyer behind the 8 ball on the contingency if it takes a long time to get the inspector out to the house and/or there are lots of back and forth between the buyers and sellers in negotiating inspection items. A domino impact is that the lender cannot give a financing commitment until the appraisal is complete and a delay in that could delay in settlement. And, if you delay settlement, you may have to pay to extend your lock-rate, though interest rates remain very low.

If timing is tight a buyer can always write an addendum asking the sellers to extend the appraisal contingency. The selling side must be agreeable and this may depend on how friendly or abrasive negotiations have been, how long the house has been on the market and how long it has been off the market under contract.

Sellers, my biggest piece of advice is that your agent should do as much diligence up front in reviewing each buyer's offer, talking with their lender and making sure that the buyer is strong financially before accepting an offer.  If the buyer is strong and has otherwise presented a contract that works for you as is or is negotiable,then I would keep it in the back of my mind that if the buyer needs to extend the appraisal contingency (which could also mean extending the financing contingency and the settlement date), I would agree unless the buyers are not being reasonable during the inspection period and you want to start fresh with a new possible buyer.

 In addition, before considering backing out of a contract, I would factor into this how many days your home was on the market before getting any offers, if the market is strong or weak for sellers.

Any time you or someone you know is contemplating a move or has a real estate question, please call me:  (301)943-4370 or send me a note to  

I always have time for and greatly appreciate your referrals.

Life is good!


Cell/Direct:  (301)943-4370
Office:  (301)921-4500  - ask for Adam
RE/MAX Realty Group

Information deemed to be accurate but not guaranteed

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