State of Appraisals (Updated June 2021)
Real estate continues to be on fire in just about every corner of North America. Many markets have seen prices rise by more than 25% in a single year. The pandemic has made a home more than just a home. For many, it's now a workplace, gym, restaurant, and entertainment centre. Murtaza Haider and Stephen Moranis recently wrote a short article for the Financial Post on the very subject. READ IT HERE The brisk market and renewed lock-downs are placing a strain on appraisals. Many markets across Canada have 7 business day turnaround times. Some are as long as 10 business days. Good luck even getting a report completed by someone if you aren't a trusted business partner of theirs. But there is a silver lining: Turnaround times have peaked and have started to come down in most markets.
Remember Canada Day is around the corner. Many appraisers are taking July 2nd as a holiday!
Place your appraisal orders asap for closings happening the week of July 5th.
Value Connect adapted through COVID with the Modified Full-Inspection (ModFI) appraisal report, where appraisers use pictures of the property provided by homeowners or realtors. And while this allows people worried for their health to get reports completed, it does end up being more work for the appraiser.
Why does it take as much (or more) time to complete a ModFI report compared to a regular full appraisal?
It's because homeowners and real estate agents often provide fewer pictures than required, or the quality is
sub-par. Appraisers end up going back-and-forth to get the required information.
Some lenders are trying to use automated appraisal models (AVMs) to speed up the process - unfortunately those systems have difficulty accounting for large price fluctuations. And while an AVM is a great option in certain circumstances, a full appraisal report is required in most cases today because the AVM simply doesn't "hit" value.
We strongly recommend mortgage professionals and lenders set closings for refinances 40 days from submission date, and request the appraisal as soon as the approval comes in. Do not wait. Train your customers ahead of time so they know to take pictures and how to share them via tools like OneDrive, Box.com, or DropBox.
Need a report or not sure what's happening with turnaround times outside your regular lending area? Contact Us We serve mortgage specialists and lenders across Canada (all property types and locations - Urban, Rural, & Remote).
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