topic Re: How long should an appraisal take? in Mortgage Loans

How long should an appraisal take?

Phitor — Fri, 04 May 2012 22:49:15 GMT

Timeline:

- March 31 : Offer accepted for an amended June 15 closing, and a mortgage commitment deadline of April 30th

- April 16: After shopping for a lender, chose a local credit union.

- April 24: Gave them the deposit for the appraisal and other fees, as well as other paper work

- April 27, Delivered more paperwork, and inquired about the appraisal date. Found out the average turnaround for an appraisal is currently 2 weeks, due to volume. I asked for an expedited appraisal.

- April 28: Extended mortgage commitment from April 30 to May 11, based on delayed appraisal and projected appraisal timeline.

- April 30, CU agreed to the expedited appraisal, but I don't know what impact this has . Also received request from the CU for the listing agent's contact info, so an appraiser can eventually be let into the property.

- May 1, Sent contact info requested

- May 4, Mailed more paperwork to CU.

But also on this day, we received a rather blunt, quasi-threatening email from our agent about the situation, claiming no one has contacted the listing agent to be let into the house, there are backup buyers lined up, etc etc etc.

Both agents are very nervous, and our agent suggested it might be worth it to eat $350 and schedule our own appraisal. Even though the CU couldn't use it, it would accomplish two things: 1) We would get forewarning if the appraisal came in low, that our loan might not go through when the CU performs their own appraisal, and 2) shows the sellers that we are doing everything in our power to move this along, and not playing games with them.

At this point, I think our plan is to call the CU first thing Monday morning and *calmly* inquire about the appraisal date. If they are still wishy washy or nondeterministic, order our own appraisal for Tues with a report available hopefully on Thurs. Then we can go from there. I wish I could go back in time and not pick this CU. If anyone is keeping score between CUs and brokers, score one for the brokers.

Anyone have an experience like this? Or have any advice? Thanks...

Re: How long should an appraisal take?

Anonymous — Sat, 05 May 2012 00:45:38 GMT

I hope everything works out for you. The only experience I can share with you is that We had an appraisal done on a Thursday and received the report the following Monday. We also just had to have a second one done (re-inspection) yesterday and just received the paperwork today (Friday). I would imagine this last one was faster because it was not a full inspection. I am using a Broker and when we buy again we will do the same. Wishing you the best!

Re: How long should an appraisal take?

StartingOver10 — Sat, 05 May 2012 01:21:37 GMT

Looking at your timeline, you didn't actually make loan application with the CU until April 24, 2012. It is not an official application until you sign the app and pay the fee. Having said the above the CU seems to be taking an awfully long time to process your app, even if you made it late.

(Note; I'm an agent, and in our purchase and sale contracts there is a time frame that is allotted for the buyer to make formal application after the contract is ratified and the standard time frame is 5 days. As a matter of standard business practices in our area, the time frame for an appraisal is 10 days or less. The lender doesn't order the appraisal until they get the appraisal fee and the official application.)

I understand where the agents are coming from, but having another appraiser come out to appraise the house doesn't make any sense unless the appraisal would be acceptable by your lender. You might be better off having the lender issue the commitment subject to the appraisal, if you can get them to do that. Then the seller would be more calm and the agents would know you are truly approved.

BTW, there is another choice besides brokers and CU's. You should have gone to a mortgage banker. They can do the deals in 30 days easily. They underwrite their own deals, fund their own deals and in general, move much more quickly.

Re: How long should an appraisal take?

Phitor — Sat, 05 May 2012 01:55:50 GMT

@Anonymous wrote:
The only experience I can share with you is that We had an appraisal done on a Thursday and received the report the following Monday.

Yeah, I expected maybe 2 business days from appraisal to report, so at least your timeline coincides with that. So if it were to happen early next week, the report might make it in before the 11th. After Wednesday though, not a chance.

Re: How long should an appraisal take?

Phitor — Sat, 05 May 2012 03:04:30 GMT

@StartingOver10 wrote:
Looking at your timeline, you didn't actually make loan application with the CU until April 24, 2012. It is not an official application until you sign the app and pay the fee. Having said the above the CU seems to be taking an awfully long time to process your app, even if you made it late.

(Note; I'm an agent, and in our purchase and sale contracts there is a time frame that is allotted for the buyer to make formal application after the contract is ratified and the standard time frame is 5 days. As a matter of standard business practices in our area, the time frame for an appraisal is 10 days or less. The lender doesn't order the appraisal until they get the appraisal fee and the official application.)

I understand where the agents are coming from, but having another appraiser come out to appraise the house doesn't make any sense unless the appraisal would be acceptable by your lender. You might be better off having the lender issue the commitment subject to the appraisal, if you can get them to do that. Then the seller would be more calm and the agents would know you are truly approved.

BTW, there is another choice besides brokers and CU's. You should have gone to a mortgage banker. They can do the deals in 30 days easily. They underwrite their own deals, fund their own deals and in general, move much more quickly.

In retrospect, I agree about myself being "late" to apply. However, I feel I was grossly mislead by my realtor, who stated that all I needed to have was a "mortgage commitment" by the 30th, nothing more. Not an unconditioned commitment, or the appraisal done, etc. Well, I had a commitment on the 24th. It was my understanding that the loan app takes 1-2 weeks to process, that's why my timeline was 2 weeks to shop, then 2 weeks to process once I had a lender.

Regarding getting a 2nd, unofficial appraisal, the way it was explained to me is this... if the appraisal comes in low, the loan is at risk to fall apart. If this happens after the 11th, we are at risk to lose our $20k good faith money. If this happens before the 11th, we can still get it back. The second, unofficial appraisal, if completed before the 11th, would give us some insight as to how the lender appraisal will come in, and still give us time to bail and collect the good faith money - and with a week left here, timing is going to be crucial. Giving the sellers a "warm and fuzzy" that we still care, is sort of a beneficial byproduct of a secondary appraisal.

BTW, regarding your comment on getting a "commitment pending appraisal"... I received a commitment with 10 conditions on 4/24. I received a revised commitment on 4/30 with 6 of the conditions removed having been satisfied, the other 4 pending on things closer to closing. The appraisal is all that is left. That all said, don't I, in essence, have a "commitment pending appraisal" already?

Re: How long should an appraisal take?

StartingOver10 — Sun, 06 May 2012 00:41:31 GMT

@Phitor wrote:
@StartingOver10 wrote:
Looking at your timeline, you didn't actually make loan application with the CU until April 24, 2012. It is not an official application until you sign the app and pay the fee. Having said the above the CU seems to be taking an awfully long time to process your app, even if you made it late.

(Note; I'm an agent, and in our purchase and sale contracts there is a time frame that is allotted for the buyer to make formal application after the contract is ratified and the standard time frame is 5 days. As a matter of standard business practices in our area, the time frame for an appraisal is 10 days or less. The lender doesn't order the appraisal until they get the appraisal fee and the official application.)

I understand where the agents are coming from, but having another appraiser come out to appraise the house doesn't make any sense unless the appraisal would be acceptable by your lender. You might be better off having the lender issue the commitment subject to the appraisal, if you can get them to do that. Then the seller would be more calm and the agents would know you are truly approved.

BTW, there is another choice besides brokers and CU's. You should have gone to a mortgage banker. They can do the deals in 30 days easily. They underwrite their own deals, fund their own deals and in general, move much more quickly.
In retrospect, I agree about myself being "late" to apply. However, I feel I was grossly mislead by my realtor, who stated that all I needed to have was a "mortgage commitment" by the 30th, nothing more. Not an unconditioned commitment, or the appraisal done, etc. Well, I had a commitment on the 24th. It was my understanding that the loan app takes 1-2 weeks to process, that's why my timeline was 2 weeks to shop, then 2 weeks to process once I had a lender.

Regarding getting a 2nd, unofficial appraisal, the way it was explained to me is this... if the appraisal comes in low, the loan is at risk to fall apart. If this happens after the 11th, we are at risk to lose our $20k good faith money. If this happens before the 11th, we can still get it back. The second, unofficial appraisal, if completed before the 11th, would give us some insight as to how the lender appraisal will come in, and still give us time to bail and collect the good faith money - and with a week left here, timing is going to be crucial. Giving the sellers a "warm and fuzzy" that we still care, is sort of a beneficial byproduct of a secondary appraisal.

BTW, regarding your comment on getting a "commitment pending appraisal"... I received a commitment with 10 conditions on 4/24. I received a revised commitment on 4/30 with 6 of the conditions removed having been satisfied, the other 4 pending on things closer to closing. The appraisal is all that is left. That all said, don't I, in essence, have a "commitment pending appraisal" already?

I'm sorry your Realtor didn't give you good guidence for the loan process.

Yes, actually, it sounds like you do have a commitment pending appraisal already.

I see now why they are asking for the appraisal to be completed - but IME appraisals for the same property can come in with vastly different amounts. To illustrate, I was the listing agent on a short sale where the short sale loan was an FHA loan and the servicer was BOA. The property was put on the market, we received 4 offers in two days and accepted the highest conventional financing offer. As a part of the normal process, BOA sent out an appraiser to determine value for the short sale lender. Within the following week or two, the buyer's lender sent out an appraiser for the buyer's loan. Both appraisals came in and there was a huge difference in value: the short sale appraisal from BOA came in at $164k and the conventional loan appraisal for the buyer came in at $200k. That is a large difference considering the actual price. The comps were the same, the house was the same property (no changes) - the only difference was the appraiser.

This is just one example, but it happens all the time where the values come in vastly different on the same property in the same time frame depending upon the appraiser and the bank's instructions to the appraiser.

I see where you are coming from - you have your deposit at risk. Can't you extend the date again for the appraisal due date? This time get a date from the lender that they know they can meet since you still have plenty of time to close.

Re: How long should an appraisal take?

Phitor — Mon, 07 May 2012 21:27:31 GMT

@StartingOver10 wrote:
@Phitor wrote:
@StartingOver10 wrote:
Looking at your timeline, you didn't actually make loan application with the CU until April 24, 2012. It is not an official application until you sign the app and pay the fee. Having said the above the CU seems to be taking an awfully long time to process your app, even if you made it late.

(Note; I'm an agent, and in our purchase and sale contracts there is a time frame that is allotted for the buyer to make formal application after the contract is ratified and the standard time frame is 5 days. As a matter of standard business practices in our area, the time frame for an appraisal is 10 days or less. The lender doesn't order the appraisal until they get the appraisal fee and the official application.)

I understand where the agents are coming from, but having another appraiser come out to appraise the house doesn't make any sense unless the appraisal would be acceptable by your lender. You might be better off having the lender issue the commitment subject to the appraisal, if you can get them to do that. Then the seller would be more calm and the agents would know you are truly approved.

BTW, there is another choice besides brokers and CU's. You should have gone to a mortgage banker. They can do the deals in 30 days easily. They underwrite their own deals, fund their own deals and in general, move much more quickly.
In retrospect, I agree about myself being "late" to apply. However, I feel I was grossly mislead by my realtor, who stated that all I needed to have was a "mortgage commitment" by the 30th, nothing more. Not an unconditioned commitment, or the appraisal done, etc. Well, I had a commitment on the 24th. It was my understanding that the loan app takes 1-2 weeks to process, that's why my timeline was 2 weeks to shop, then 2 weeks to process once I had a lender.

Regarding getting a 2nd, unofficial appraisal, the way it was explained to me is this... if the appraisal comes in low, the loan is at risk to fall apart. If this happens after the 11th, we are at risk to lose our $20k good faith money. If this happens before the 11th, we can still get it back. The second, unofficial appraisal, if completed before the 11th, would give us some insight as to how the lender appraisal will come in, and still give us time to bail and collect the good faith money - and with a week left here, timing is going to be crucial. Giving the sellers a "warm and fuzzy" that we still care, is sort of a beneficial byproduct of a secondary appraisal.

BTW, regarding your comment on getting a "commitment pending appraisal"... I received a commitment with 10 conditions on 4/24. I received a revised commitment on 4/30 with 6 of the conditions removed having been satisfied, the other 4 pending on things closer to closing. The appraisal is all that is left. That all said, don't I, in essence, have a "commitment pending appraisal" already?

I'm sorry your Realtor didn't give you good guidence for the loan process.
Yes, actually, it sounds like you do have a commitment pending appraisal already.

I see now why they are asking for the appraisal to be completed - but IME appraisals for the same property can come in with vastly different amounts. To illustrate, I was the listing agent on a short sale where the short sale loan was an FHA loan and the servicer was BOA. The property was put on the market, we received 4 offers in two days and accepted the highest conventional financing offer. As a part of the normal process, BOA sent out an appraiser to determine value for the short sale lender. Within the following week or two, the buyer's lender sent out an appraiser for the buyer's loan. Both appraisals came in and there was a huge difference in value: the short sale appraisal from BOA came in at $164k and the conventional loan appraisal for the buyer came in at $200k. That is a large difference considering the actual price. The comps were the same, the house was the same property (no changes) - the only difference was the appraiser.

This is just one example, but it happens all the time where the values come in vastly different on the same property in the same time frame depending upon the appraiser and the bank's instructions to the appraiser.

I see where you are coming from - you have your deposit at risk. Can't you extend the date again for the appraisal due date? This time get a date from the lender that they know they can meet since you still have plenty of time to close.

Thanks again for all the advice... here is the update from today and over the weekend.

Worked with the UW on Saturday morning to schedule the appraisal for Monday or Tuesday, as well as eSign some last docs. They should have received my last package of documents in the mail today.

The appraisal was scheduled for today, but the appraiser had to request to be taken off the case, as he had some relationship with the homeowners and there was a conflict of interest (yeah, right. rolleyes.) So we have a new appraiser scheduled for Thurs, May 10, with a report later that night. Cutting it close to the May 11th deadline, but I'm sort of out of options at this point and had to accept that offer.

I did get some good, reassuring information from the lender. Even though the condition for the appraisal can't be taken off the loan, my loan really isn't riding on it:

"If the appraised value comes in lower than expected, for example 8% less than the purchase price, then this would raise your loan-to-value (LTV) up to 94%. This would raise your PMI bracket, but since you are currently at a 25% debt-to-income (DTI) this doesn't seem like a problem. The credit union underwriting guidelines will allow up to 45% DTI. As an FYI, your closing costs may also increase if your LTV increases, due to Fannie Mae Loan-Level-Price-Adjustments."

I relayed all this to my agent and the sellers, hopefully pacifying them until Thursday when the appraisal comes in.

Re: How long should an appraisal take?

Phitor — Fri, 11 May 2012 21:25:27 GMT

Update... appraisal happened yesterday morning, then the report came in this afternoon. Property appraised 7% above purchase price, which was really exciting. It will be nice to start out with 18% equity in the home, instead of 12%. Was a little disappointed that this won't help with LTV and PMI though, as the value they use is whichever is lower between the purchase price and the appraisal. Oh, well.

I've been told that the PMI approval, which is the last condition on the commitment letter, will take one business day to go through from the receipt of the appraisal. My lawyer suggested we extend the mortgage commitment deadline a second time from May 11 to May 16 to allow for the PMI approval. I didn't really think this was necessary, but I went along with it anyway.

Almost there...

Re: How long should an appraisal take?

StartingOver10 — Sat, 12 May 2012 01:08:29 GMT

Congratulations! The appraisal is the critical part in a market like this - and you have extra equity to boot!

You did the right thing by extending the mortgage commitment deadline to allow for PMI - its just the prudent thing to do. Sounds like you will be closing soon :0

Re: How long should an appraisal take?

Phitor — Wed, 16 May 2012 21:16:41 GMT

Ugh... so, my commitment deadline officially expires today. The PMI approval condition has been removed, as expected, but there is still a condition based on the appraisal. The appraisal was executed on Thursday, and the report available on Friday. I asked my lender about this condition, and they said "I have reviewed and approved the appraisal. Unfortunately, the appraisal condition is hard coded in our letter and we cannot delete the condition."

Well, my title attorney is freaking out about this, claiming this can be used as an out to invalidate the commitment at any point in the future. If the appraisal condition can't be removed, she asked me to have the lender add the following verbiage to the commitment letter: "the appraisal came in at $X and that it has been reviewed and approved by underwriting." I have asked for this verbiage to be added, but have not heard back. I have also not requested a 3RD(!!) extension to the mortgage commitment. The deadline will pass today, so I am taking a leap of faith that this does not turn out to be a problem.

Anyone hear of anything like this, where a "condition for an appraisal" can't be removed from the commitment letter because it is a hardcoded condition, even though a satisfactory appraisal was obtained? Is my lawyer correct that I should be concerned about this as a possible lender "out" at some point in the future?

Thanks...

Re: How long should an appraisal take?

StartingOver10 — Thu, 17 May 2012 01:31:32 GMT

I have run into conditions on appraisals having to do with quite literally the conditon of the property. The condition cited is very specific and in each instance the condition needed to be corrected before closing. For example: i have seen cracked windows requiring replacement, wood rot, termites, Federal Pacific electrical panels (replacement thereof) etc.

What type of condition is the appraiser calling for on your appraisal - do you have it in writing from the lender?

Re: How long should an appraisal take?

Phitor — Thu, 17 May 2012 03:24:27 GMT

@StartingOver10 wrote:
I have run into conditions on appraisals having to do with quite literally the condition of the property. The condition cited is very specific and in each instance the condition needed to be corrected before closing. For example: i have seen cracked windows requiring replacement, wood rot, termites, Federal Pacific electrical panels (replacement thereof) etc.

What type of condition is the appraiser calling for on your appraisal - do you have it in writing from the lender?

It's very vague and general:

------------------------

Conditions To Be Satisfied for Closing:

The Credit Union will order or prepare the following documents:

1) Typed application to be signed at closing

2) Satisfactory appraisal with a minimum value of $X. (incidentally, $X was what it just officially appraised for last week)

3) All outstanding mortgages must be paid off unless otherwise approved by the Credit Union in writing (I don't have any other mortgages)

Additional conditions continued on next page

Satisfactory verification of employment will be required within 10 days of closing

This loan is subject to FNMA price adjustments for added risk

-----------------------------------

That's it. The appraisal condition is very high level and vague, and slightly confusing, since the appraisal just happened last week valuing the property at $X, and this amount is actually present in the condition itself! Weird....

Re: How long should an appraisal take?

beb86 — Thu, 17 May 2012 07:56:26 GMT

mine was only a week from when it was ordered...I received a big stack of papers in the mail one day.

Re: How long should an appraisal take?

StartingOver10 — Thu, 17 May 2012 10:19:24 GMT

@Phitor wrote:
It's very vague and general:

------------------------

Conditions To Be Satisfied for Closing:

The Credit Union will order or prepare the following documents:

1) Typed application to be signed at closing
2) Satisfactory appraisal with a minimum value of $X. (incidentally, $X was what it just officially appraised for last week)
3) All outstanding mortgages must be paid off unless otherwise approved by the Credit Union in writing (I don't have any other mortgages)

Additional conditions continued on next page

Satisfactory verification of employment will be required within 10 days of closing
This loan is subject to FNMA price adjustments for added risk

-----------------------------------

That's it. The appraisal condition is very high level and vague, and slightly confusing, since the appraisal just happened last week valuing the property at $X, and this amount is actually present in the condition itself! Weird....

Those conditions are normal, standard conditions. I see them all the time. Nothing to worry about at all. All the CU has to do is initial that the condition has been met (as in the case of the appraisal and other items). For the VOE, its perfectly standard for the lender to reverify just before closing - they want to make sure you still have your job. Don't worry at all.

Re: How long should an appraisal take?

Phitor — Fri, 18 May 2012 02:58:57 GMT

@StartingOver10 wrote:
@Phitor wrote:
It's very vague and general:

------------------------

Conditions To Be Satisfied for Closing:

The Credit Union will order or prepare the following documents:

1) Typed application to be signed at closing
2) Satisfactory appraisal with a minimum value of $X. (incidentally, $X was what it just officially appraised for last week)
3) All outstanding mortgages must be paid off unless otherwise approved by the Credit Union in writing (I don't have any other mortgages)

Additional conditions continued on next page

Satisfactory verification of employment will be required within 10 days of closing
This loan is subject to FNMA price adjustments for added risk

-----------------------------------

That's it. The appraisal condition is very high level and vague, and slightly confusing, since the appraisal just happened last week valuing the property at $X, and this amount is actually present in the condition itself! Weird....

Those conditions are normal, standard conditions. I see them all the time. Nothing to worry about at all. All the CU has to do is initial that the condition has been met (as in the case of the appraisal and other items). For the VOE, its perfectly standard for the lender to reverify just before closing - they want to make sure you still have your job. Don't worry at all.

Thanks for the piece of mind. I kind of agree with you that it is much ado about nothing, but my title attorney is concerned that I only have that the appraisal was approved in email, and that the lenders can claim the appraisal was actually unsatisfactory, if they really want to, voiding the commitment.