Recently one of my clients tried to close his transaction and ran into issue with appraisal. Since now property appraisals are done by appraisers from an independent list, it is taking longer for the process to complete. The lenders place the property list in a pool and independently the appraisers pick from the list and complete their appraisal. All good, the independence affords objectivity to the whole process. Lenders no longer can bend the rules or influence the appraisal process. Sounds good on the surface.
What if the appraiser makes a mistake (ooo I can tell you how many times that has happened). Simple mistakes like address of the property. Come on, that is appraisal 101 and yet appraisers still make that mistake. Another common issue is the actual appraisal. What if the appraiser is inexperienced, can't determine the equivalent value etc etc. More often than not, appraisers and for that matter most real estate professionals lack the construction, structural or engineering knowledge to make a call on property worth. So how should we handle it. If I had a say in this matter, I will have two appraisers look at the property at the same time and then the lender has a better chance of getting a more accurate appraisal.
The process has become lengthier. So if you lock your interest rate, chances are the interest rate will expire before you can close. So banks and other lenders should consider extending the interest rate locking period to 45 days instead of 30 days.
Many more ideas can come of out a discussion on this topic. I hope someone reads this blog and takes up the discussion.