You may have heard of all kinds of shortages since the pandemic – chlorine shortage? lumber shortage? – but if you're looking to buy a home, the home appraiser shortage is the one you should worry about.
We don't need to tell you that the US property market is hot right now, with far fewer homes up for sale than buyers. As if things already weren't difficult for buyers, your home purchase may be significantly delayed or even fall through if you can't find a home appraiser.
What does a home appraiser do?
A home appraiser is necessary for the vast majority of home sales that involve either taking out a mortgage or refinancing. They can't be replaced by online evaluations, and the home appraiser does not work for either buyers or sellers. Instead, a home appraiser's job is to produce an accurate valuation of a home that will minimize the risk for the lender. The appraiser always works with an individual home rather than just relying on neighborhood home price estimates, adding or subtracting value after an in-person visit.
What is the cause of the home appraiser shortage?
Christian Adams, former real estate broker and CEO at Repair Pricer (opens in new tab), explains that 'By refusing to train new home appraisers to meet licensing requirements, existing appraisers are able to control the market, creating staggering price increases and massive issues for buyers and their agents.' There isn't enough incentive for experienced appraisers to take on apprentices, as they earn less if they do the appraisals with an apprentice present.
Moreover, many appraisers report being overwhelmed by too many requests and are charging more in an attempt to reduce the number of orders. As Lauren Kenney, an appraiser with over 26 years experience, told News 4 San Antonio (opens in new tab), 'you wouldn't believe how many orders I get every day or requests.'
How can the home appraiser shortage affect me?
Christian recently completed a national survey of 1200 U.S. real estate agents to find out what effects the home appraiser shortage was having on the housing market. His findings are sobering: 32 percent of agents have had a closing delayed or canceled in the last two years as a result of home appraisal issues. Within Austin, Texas alone, this percentage goes up to 76 percent. Additionally, 18 percent of agents have noticed appraisal prices more than double in the last two years, going up to 57 percent in the Austin, Texas area.
In other words, if you are buying in a hot housing market like Texas, prepare for the possible delay and additional cost of your appraisal. It may be very quick to agree a sale right now, but closing the sale is a different matter. Christian concludes: 'Make sure your agent communicates effectively with the appraiser and if possible provides pre-formatted comparative sales examples to facilitate a speedy appraisal. Many listing agents leave these examples printed out in the home on the day of the appraisal.'