DENVER - It’s not the sexiest part of buying or selling a home but it’s often a necessary one. Appraisal management companies suggest an appraisal fee of $625. But in one of the hottest real estate markets in the country, appraisers, in high demand, are charging hundreds more than that.
Mortgage loan originator Brian Gold says he’s never seen anything like it in his 21 years of working in Colorado. Bidding wars are being created by appraisers looking to make the most on any job.
“It’s time sensitive because interest rates change on a daily basis. We try to lock in interest rates for our borrowers. But if we lock them in for 30 days when the appraisal is taking 90, that doesn’t help,” said Gold.
Appraiser may be one of the best jobs to have right now in Colorado, with no shortage of work.
“I am not exaggerating. For every one that I do I probably turn down 15 to 20. That’s simply a function of-- I don’t have the time,” said appraiser Warren Boizot. “That’s where the fees are being driven up is because the shortage of appraisers, we can’t beat the due date because we are slammed, busy.”
Boizot says he’s booking work at least a month out and that appraisers can currently charge “double, triple, quadruple” the expected fee.
“I have heard from other mortgage brokers, from realtors, as high as $3,000 to get an appraisal done,” said Gold, who said 70 appraisers recently rejected a job at a home in Westminster for a client of his.
As a loan originator, Gold says he personally absorbs the extra fees instead of borrowers, but the real problem is timing. It takes so long to get appraisals done that interest rates can change before the process is over.
“I am getting weekly calls of, look we are in desperate, desperate need here because this appraiser didn’t meet their deadline,” said Boizot.
Boizot also says another reason for a shortage of appraisers may be the 2009 mortgage crisis.
Many appraisers got out of the industry and few new people have taken on the massive work load to get certified.
It's a domino effect causing headaches for borrowers and sellers. Patience right now is the only key to this housing market.