Episode 68, Part 3: Explaining Recent Appraisal Delays in Austin
John and Andrew talk appraisals and recent delays in the busy Austin real estate market.
"There's no doubt that there are delays with appraisals right now," John says. "Prior to March or so, in real estate things get really busy in the spring through the summer, and then it slows down around November. We're in two thirds of the way through the busy season right now."
Why are appraisals taking longer to come in right now?
"Appraisers get really busy too, but to become an appraiser, it's like a two-year apprenticeship and you also have to have a college degree, and you can't just hire appraisers," John explains. "It's an industry where the average age is going up and the younger generation is not getting into becoming appraisers, for whatever reason. It's just the reality - the average age of appraisers is around 60 right now."
So when appraisers get really busy, they're tapped out - there's just not enough appraisers out there right now.
"We're used to about a 5-day turnaround, but we're seeing in Travis County that it's taking about 6.4 days on average to get an appraisal back. When you're in this business, every day counts. Sometimes that one day can really affect things."
In other counties like Bexar County near San Antonio, appraisals are taking about 7 to 8 days right now.
"In Salado, we had to call 10 appraisers to find one who could do that report in 17 days. We couldn't find an appraiser to do it in the time-frame it needed to happen, so we had to push out closing date out, and the appraisers were still 3 days past that date."
We work with appraiser management companies, so we don't really have any control over how the appraisal goes or how fast it comes back," Andrew adds.
Guidelines to Dealing with Appraisal Delays
1. Be prepared to possibly pay more
A typical appraisal costs roughly $460, but it's not uncommon these days to pay $560 or $660 for an appraiser simply because they are so busy and working later than normal. "It's supply and demand," John says.
2. Talk to your lender about what their turn times are
We have a pretty good idea depending on the location of the property what the turn time is for an appraisal. If a closing date is August 10th and the best appraisal time is August 8th, we'll then tell you that we think it should close on time, but there may be a delay. A good lender will let you know upfront that there may be a delay in your appraisal.
3. Have a back-up plan
"Unfortunately, right now you may just have to assume that the appraisal will come in a day or two late," John says.
Be sure to communicate with your realtor and lender to ask what the plan is if the appraisal does come in a little later than the deadline. "I think most good agents will think through this and have a pre-negotiated backup plan so that if the worst-case scenario happens, you will be able to get through it," John says.