Beginning May 1st a new regulation was enacted to try to put a buffer on often inflated appraisal reports. You may know that the appraisal is what the banks use to value a home prior to committing to a loan for the property. Most appraisals are honest fair valuations based on similar homes in the area. But appraisers have some leeway in the numbers and unscrupulous ones may even give the bank and realtor whatever they need to get the deal done.
Now the bank and realtor have to deal with a 3rd party who orders the appraisals in order to keep such favors in check. The problem is that now the appraisals take weeks instead of days, requiring longer mortgage rate locks and extensions which are more expensive. Also if the home’s value was questionable the friendly local appraiser could give a quick ‘yes/no’ response to the bank and the deal could be halted without any wasted time or expense. Now an appraisal must actually be ordered (for $300-400) to determine this go/no-go. Then if the deal gets cancelled the customer is out the appraisal fee.
Read more at stltoday.com
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