So, you’re ready to sell you’re Cactus Acres home. The market is good. Housing demand is rising. But there’s just one snag. The one thing you need in order to close is hard to find and that’s an appraiser. The people who value homes are shrinking in numbers. And that’s causing a lot of delays in closings, costing a lot of money to both buyers and sellers.
On-time closings are down 77% last April to 64% today for loans backed by Fannie Mae and Freddie Mac, according to Campbell/Inside Mortgage Finance. Issues related to appraisals in these delays went up 50% in that time.
It all started in 2007, with the U.S. housing market crash. Since that time, the number of appraisers has shrunk by 22%. Not only that, but the current group of appraisers is aging with more than 60% over age 50. That could present a challenge when selling your Cactus Acres home.
So, why aren’t we seeing new appraisers come on the scene? It’s mainly due to new regulations designed to protect banks and borrowers. “They were put in place at the end of 2008 by Fannie Mae, Freddie Mac and the FHA, as the entire mortgage banking community was under strict scrutiny after the financial crisis.”
The rules changed regarding apprentices doing full appraisals. No longer can they be on their own. A licensed appraiser must be on-site for the inspection. As a result, the appraiser no longer sees a need to pay apprentices. But apprentices, whether it be at your Cactus Acres home for sale or one in another community, need 2,500 hours of appraisal experience in two years in order to become licensed.
As home prices rise, valuations are becoming more important in neighborhoods like Cactus Acres. Prices could change in a matter of months, the same amount of time in some markets it takes to have an appraisal done. Changes are being considered but so far, there’s no short-term fix.
Bottom line, the new rules involving apprentices has caused the numbers of appraisers to go way down, impacting the sales of homes. Whether it’s your Cactus Acres home for sale or one in another market, plan on waiting longer than normal for a home appraisal.