Recently, I was in the field for the entire day racing from house to house without my normal time between home viewings to respond to a voice mails (happening more often lately). When the day was done I had about forty messages on my phone, which is normal these days. About ten of those messages were home buyers or borrowers who had been told that their lender could not find an appraiser to get their deal done prior to the planned closing date, stating that appraisers were scheduled months, not weeks out. These consumers are calling around trying to help their lender make their refinance or purchase transaction work. The remaining thirty or so messages were our normal appraisal requests, but far more than our four appraisers could ever service daily, and this does not include the majority of appraisal requests that come in by email each day.
Appraisers around Portland, Oregon have been seeing a demand for appraisals that is beyond anything we have ever encountered, even during the run-up to the last real estate market collapse. Our schedule is seven weeks out as I write this, but we are trying hard to bring that down to a more reasonable two to three weeks. According to many people I’ve spoken to, it is more difficult to get an appraisal in Oregon than anywhere else in the country. So what is going on? Where are all the appraisers in Portland?
There are many factors that are causing long delays for appraisals, not just in Oregon, but across the country. Here is a list of some factors that you might have heard:
However, I think there are two underlying causes for this problem that are not listed above.
The solution to these problems are already starting to work themselves out with simple supply and demand. Just today I got a call from an appraiser in Utah looking to move to Portland for the higher fees and I’ve had four appraiser trainees ask me for work in the past two weeks. When there is money to be made, some appraisers who had previously left the industry will come back.
In the past six months, appraisers have seen fees jump, especially around Portland, Oregon. Some real estate agents near Portland were refusing to accept VA offers on sales because the appraisals were taking too long. In response, the VA raised prices for appraisals in Clackamas County by over fifty percent if the appraiser completes within a reasonable time. Also, some lenders are now following suit with VA-like appraisal price increases or bonuses for quick delivery. These fee increases will also likely attract more appraiser trainees and make more appraisers feel like they can afford to train someone.
Now, the lenders need to open up their internal policies and make it clear that appraiser assistants can and should take more of an active role in the appraisal process and inspect subject properties and comparable sales in states where it is legal to do so. The health of the appraisal profession, the real estate market, and the lending industry all depend on having plenty of skilled appraisers. More background is provided below regarding the laws in Oregon and using appraiser assistants on typical Fannie Mae appraisals for lenders.
Did I leave anything out or do you want to join in the conversation? Let me know in the comments below.
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Thanks for reading,
Gary F. Kristensen, SRA, IFA, AGA
Here is some additional information regarding if an appraiser assistant can inspect a property without the supervising appraiser present in Oregon:
Each state and lender can decide if appraiser assistants can inspect a property and report what they see back to the supervisor, but the rules are complicated and out of an abundance of caution or other bureaucratic reasons, many or most lenders and AMCs will not allow appraiser assistants to inspect the subject property and comparable sales without the supervising appraiser.
The Oregon Appraiser Certification and Licensure Administrative Rules 161-010-0010 states, “Unlicensed/Uncertified individuals may assist in the preparation of an appraisal, but are not allowed to sign the appraisal report. However, Oregon rule 161-025-0030 states, “An appraiser assistant may sign an appraisal report, provided their supervising appraiser co-signs the appraisal report and accepts full responsibility for the contents of the appraisal report.
Fannie Mae, Freddie Mac, FHA, VA, and USDA (GSEs) dictate on the Uniform Residential Appraisal Report (URAR) that the signing appraiser must personally view the subject property and comparable sales. It says on page 4 of the URAR, under Scope of Work,
“The appraiser must, at minimum: (1) perform a complete visual inspection of the interior and exterior areas of the subject property, (2) inspect the neighborhood, (3) inspect each of the comparable sales from at least the street.”
The Fannie Mae Selling Guide B4-1.1-03 states:
“As noted in the License and Certification section in this topic, Fannie Mae allows an unlicensed or uncertified appraiser, or trainee (or other similar classification) that works as an employee or subcontractor of a licensed or certified appraiser, to perform a significant amount of the appraisal (or the entire appraisal if he or she is qualified to do so), as long as the appraisal report is signed by a licensed or certified supervisory or review appraiser and is acceptable under state law.
If a supervisory appraiser is used, the supervisory appraiser must certify that he or she
A supervisory appraiser may not sign the left hand side of the appraisal report unless he or she has met the requirements of the appraiser as noted in the License and Certification section in this topic, including but not limited to, inspecting the property. “