What Is The Home Appraisal Timeline?

These Items Affect The Home Appraisal Timeline

I recently wrote a blog post about the different reasons that it might take a while to get your appraisal back. This consisted of various issues that appraisers could run into that may add to the typical time frame.

A Look At The Home Appraisal Timeline

The items I discussed in the previous post may occur depending on the property and its unique characteristics. Not every property will experience delays.

Today I would like to share with you the various steps in the appraisal timeline that an appraiser must go through before completing every assignment. If you have any questions about this please leave a comment below.

Steps In The Appraisal Process

1) Order – The first step in the appraisal timeline is of course the order. If a lender orders an appraisal they typically order it through the appraisal department of their company or through a third party Appraisal Management Company or AMC.

If it is ordered through the bank the actual order is sent directly to the appraiser, however, if it is sent to an AMC this may take a little longer because it is a third-party vendor. As in anything else, when more people are involved in the process the longer things take.

The AMC scenario was put into place several years ago to reduce direct contact between the loan officer and the appraiser, however as I said it can be a slower process.

If an individual requires an appraisal they can contact the appraiser directly, with no time delays due to the direct contact. Communication in this scenario is ideal because there are no intermediaries and the appraiser and client speak to one another directly.

2) Set Appointment – After receiving the order the appraisal inspection must be set. This is easily done for private jobs because we are already speaking with the client.

If the appraisal order is received from a bank or mortgage company the owner or agent will need to be contacted to schedule the appointment. Any delays that the lender has in getting the order to the appraiser can extend the delivery date of the appraisal.

This delay can grow even more if an AMC is used because one more party is involved.

The appraisal inspection appointment will be set by the appraiser based on their current schedule. The appointment can be scheduled within one day to several weeks depending on their current workload.

3) The Appraisal Appointment – This step occurs when the appraiser visits the property. The goal is to collect as much information about the property, such as how big it is, what condition it is in, and what features it has.

This step can take anywhere from 30 minutes to several hours depending on the property. Larger properties take longer to measure and walk through so keep that in mind.

Read a prior article I wrote that discusses what to expect when the appraiser visits your property.

The two main parts of the property inspection involve observing the inside and outside of the property. I prefer to start with the outside first because this allows me to sketch the house first and have that available when I go inside where I can then locate and label the various interior rooms and features.

The exterior of the home is measured to arrive at the gross living area, which will be used to arrive at one of the key metrics in appraising, the price per square foot. If the home has more than one level, such as a basement or second floor these areas may be measured from the inside.

For two-story homes that have a footprint the same as the main level, the upper-level measurements can be copied from the first level. After the home is measured the appraiser finishes the outside work by noting any other exterior improvements such as barns, pools, boathouses, etc. in addition to taking pictures.

The observation continues on the inside of the home with the appraiser walking throughout the house and noting the materials of construction, condition of the home, and the various features. Finally, pictures of all of the rooms and features are taken to include in the report.

4) Analysis – After the appraiser has all of the physical data about the subject property he/she can begin to collect and analyze the data on recent sales in the subject’s competitive market area. The physical data collected about the subject allows the appraiser to narrow down the recent sales to those properties that are the most similar.

The sales will be studied to determine the adjustments to be made in the report for the physical differences between the subject and comparables. Both closed sales and active listings will be included to arrive at the most accurate value indication.

During this stage of the appraisal, the appraiser will research and verify information about the sales to make sure the most accurate data is used. This often involves contacting a party to the sale such as the buyer, seller, or real estate agent who was involved in the sale.

The time required for this stage will vary depending on the amount of data readily available. In areas where sales are plentiful, it will go more quickly than a rural area where sales occur less frequently.

In areas where most of the sales are handled by agents, the information will be easier to find. In other locations such as with rural property, there will be fewer sales, and/or the sales may be private so it may take longer to locate them and verify the information.

5) Finalize The Report – After analysis of all of the data, the appraiser then puts the report together to deliver to the client. This involves filling out the report and including all of the necessaryThomas (Tom) Horn Real Estate Appraisal Form exhibits such as the floor plan sketch, photographs, and maps.

Appraisal reports come in various formats, however, most people are familiar with Fannie Mae form 1004. This form is what is used by most lending institutions for residential properties. Some appraisers may write a narrative appraisal report for complex residential properties, however, for the most part, most are done on the 1004 form.

The appraisal report includes information about the subject property that was collected during the property inspection. Due to limited space on the form, many of the items noted may be abbreviated, however, if you do not understand how to read it you can check out this video I did explaining the form.

After the appraisal report is finished it is either delivered by email or through a lender or AMC appraisal portal. For private appraisal assignments, the report is either emailed or delivered through regular mail.

I am always available for questions that clients may have to help them understand the report or how I came up with the value.

Question

Do you have any other questions about the appraisal timeline or process that appraisers take to complete an assignment? If so please leave a comment below and as always thanks for reading.

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Comments

  1. Mark Buhler says

    Good info Tom. It is that Step 1 that the public should be made aware of. This step could slow down your timeline due to the process involved with (some) AMCs. Instead of locating the most competent and experienced appraiser for the property, the AMC sometimes spends precious days of that timeline trying to find the fastest and cheapest possible option. Unfortunately for all involved in the transaction, the AMC and lender typically get exactly what they pay for. Request a COMPETENT appraiser when you are contacted to schedule the appraisal. Ask questions, if you dont like the answers, go back to your lender and request a (keyword->) “competent” appraiser-both geographically and for your property type.

    • That is excellent advice, Mark. Lenders do sometimes try to save money on the front end with a cheap appraiser but then find out that they don’t know what they are doing and the lender must then go back and get another appraisal from a competent appraiser which ends up costing more overall and taking more time. Thanks for pointing this out.

  2. I definitely start with the outside of the property first too. Sometimes a client will ask me to do the inside first but I say NO because I have a certain flow of how I do things. 🙂

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