Real estate agents and loan originators say it’s taking longer to get an appraisal than it used to, sometimes resulting in delays in transactions. Appraisers say they are out straight, working on a backlog of up to four weeks of work – and if there aren’t changes in the industry soon, delays in transactions will inevitably become more common and appraisals will be more expensive.

“We’ve noticed that in some markets, appraisers are taking more time to respond, ultimately causing delays in buyers’ ability to obtain financing in the timeframe allotted for in the purchase and sale agreements,” said Andrew Armata, co-owner of LAER Realty. “We had at least a half dozen deals pushed out at the end of August for this specific reason.”

Other agents around the state reported similar experiences. They say delays are more common, but haven’t been a major problem – yet.

The turnaround time is “definitely increased,” said Shant Banosian, a loan originator with Guaranteed Rate. “It’s been a major problem in the last eight weeks. The purchase market has been busy for the last couple years, but now you’ve got this massive refinance activity since Brexit. It’s a major stressor on us.”

Banosian has made changes in office procedures to accommodate the lengthening turnaround times, but when customers expect a 30- or 45-day closing, time is always a factor.

“We used to wait for the appraisal to come in before we submit to underwriting; now we’re getting everything done before that,” he said. “Mostly we’ve been on top of it. We do little things, like if we know the purchase and sale agreement will be signed tomorrow, we’ll get the appraisal ordered and scheduled.”

For RE/MAX Leading Edge manager Alison Socha, adaptability and anticipation have been key.

“We try to be really flexible with them,” she said. “I give them a little biography of the market and town and as much support as we can. I write out notes on the comps we used when we listed the property and absorption rates. We’re all in this together.”

Appraisers say the backlog is easing as the market cools down, but the next busy spring market is around the corner. They say the reasons for the backlog have been years in the making and making changes at the federal level can also take years.

They blame a shortage of appraisers and the fact that most lenders require that trainees be accompanied by a supervisor when doing an on-site inspection. That model makes it financially difficult to take on trainees and therefore limits the number of appraisals they can perform.

New Rules Stifling Growth

“I am now turning away 30 jobs a day that I could have accepted if I was able to create new appraisers,” said Rick Lipof, owner of Lipof Real Estate Services Inc. “All my appraisers are booked out three weeks with work. It is so frustrating for me and all the lenders. We turn work away because the lenders do not want to go longer than three weeks due to commitment dates, etc.”

Lipof had 53 appraisers working for him before the crash, but since lenders started requiring trainees to be supervised on inspections, he’s down to 20. There were approximately 7,000 appraisers in Massachusetts in 2007; today there are about 2,200. Worse, the average age of an appraiser is 58, and since the requirements to become an appraiser were changed to require more training and a college degree, there are few, if any, young people to replace the appraisers approaching retirement.

Then there’s the limitation on the number of trainees at a single company. North Atlantic Appraisal Co. employs 50 appraisers and covers four states; CEO Jonathan Asker said The Appraisal Foundation only allows him to take on three trainees at a time, but firms like his could support 10 trainees comfortably. Removing that restriction would help ease backlogs.

“Generally, I have a population of 20 percent trainees,” Asker said. “Now I’m down to 8 percent trainees. It’s just killing us. I have four trainees and am looking to hire two more. I sent letters to every trainee in the state, but many of them are gone. They got burned out or are uninterested.”

Even if the rules changed immediately, Asker said he would expect to see a huge influx of new appraisers with very little experience – and that’s not ideal, either. He thinks sooner or later, the lack of appraisers will result in unacceptable delays, and lenders will allow trainees to do site inspections without physical supervision. He just doesn’t know when.

“The mortgage industry issue will right itself,” he said. “Big lenders will eventually allow trainees, and we can lobby The Appraisal Foundation to allow more than three trainees. In the meantime, the current cure is killing me.”

Help May Be On The Way

Steve Sousa, executive director of the Massachusetts Board of Real Estate Appraisers, said he sees signs that relief may be coming – the Appraiser Qualifications Board (AQB) has been discussing lowering some of the requirements to becoming a licensed residential appraiser.

“The AQB realized this was happening several months ago and are reconsidering; the tightening of the criteria is too much of a barrier for entry into the profession,” Sousa said. “Maybe by the end of the year they’ll relax the criteria. That might make it easier for licensed residential appraisers to get more work.”

“It’s depressing,” Lipof said. “The brakes are on. There’s lots of refinance, home equity and purchase activity. It stinks that I can’t expand my business because I can’t take on any trainees. It’s going to get worse. The lending community needs to accept trainees or the government needs to find a way to let trainees work alone.”