I think Yun did a good job on describing the market. Then he goes for the fake news of an appraiser shortage.
"Among contracts that had a delayed settlement (23 percent), 30 percent faced issues related to obtainingfinancingand 21 percent had appraisal issues.
While they are still the top cause of delay, issues related to obtaining financing have been
cited by fewerrespondents than when NAR first tracked this indicator. Fortypercent of those reporting a delay cited a
financing issue. The decline mayreflect the improvement in the economic environment, better credit
histories from borrowers, and improvement in theloan evaluation processes of mortgage originators.
Regarding appraisal issues, respondents reported facing appraisal delays due to a shortage
of appraisers,valuations that are not in line with market conditions, and “out-of -town” appraisers who are not familiar
with local conditions.InNAR’s Survey of Mortgage Originators, 55 percent who took part in the surveyreported some level of issues getting appraisals."
The report basically says there is a shortage of listings. Why is that? Well, when you crashed the market in 2006 you delayed the construction of housing for about 8 years. Not the appraisers fault. I've run into a fair share of incompetent realtors, they probably explain the "Other 30%." We appraisers are only 11% of the problem and that is probably way over exaggerated. And AMCs hire out of area appraisers and they know it.
"Regarding appraisal issues, respondents reported facing appraisal delays due to a shortage of appraisers, valuations that are not in line with market conditions, and “out-of-town” appraisers who are not familiar with local conditions." ... I wonder why there could be a perceived shortage of appraisers and out of town appraisers? Is it because the local appraiser charges too much for the AMC to make a huge profit and the out of town ones doing a high volume don't have time to get to them fast enough so they lower the value to lower their liability? When are they going to learn? Don't bite the hand that feeds you and don't feed the hand that bites you. I see it all day long, cut values due to sheer quick and dirty appraising. They don't have time to be accurate, so they do nominal adjustments and provide low values. I guess you get what you pay for.
Funny how it never occurs to NAR a contributing reason for deal delays/failures can be partly caused by RE agent incompetence? Why is THAT never mentioned? Failures such as over pricing property, writing inflated price contracts with personal property, and concessions,, not qualifying buyers properly, not being realistic to sellers, cobbling together shaky deals etc. Until they add themselves to the list, this article is a repetition of those that came before; self serving drivel putting blame on everyone but themselves. (maybe the 30% "other" is their own incompetence )
Amy- I see it all day long, cut values due to sheer quick and dirty appraising. They don't have time to be accurate, so they do nominal adjustments and provide low values. I guess you get what you pay for.
Unless you do review appraisals, how do you see this all day long? I highly doubt this out of town appraiser trope ...no lender wants to keep losing deals to low appraisals due to out of town appraisers..much as they love saving money or profit from a cheap pay AMC, they would pull the plug if that was happening. Nearly all AMC's do have a distance limit on where they send appraisers.
It's my personal opinion that if anything, a fast/cheap fee appraiser would tend to hit a SC price rather than come in "low", since coming in ";low " means A time consuming ROV and possible loss of business, the last thing a crank them out for volume appraiser wants.
Regardless of real or imagined incompetence due to distance or fee, the reality is it is fast and easy to slap in a low value, or inflate to a high value. What is hard ( and time consuming) is coming in at a well supported, credibly developed market value opinion, whatever spectrum of the value range it may fall in.
Any appraiser coming in low deliberately to limit their liability would soon lose clients...I've heard this theory before and outside any few exceptions who might defy any norm, I've never run across it...I have on review work or appraisals handed me by owners/ agents seen appraisers apparently willing to risk liability by hitting outlandish SC prices/inflating values on refinance orders.