The Evolving Boulder Appraisal Process
Appraisals have always existed as one of the lengthier commitments to the mortgage loan process. Over the last few years, the Boulder appraisal process has only become more protracted.
In just the last three to five years, Boulder appraisals have gone from taking weeks to over a month. A number of factors may be attributable to this increased lag time for appraisals. Some of these factors include regulatory overhaul since the housing bubble burst of 2008, difficulty of comps in the Boulder/Denver area, and a shortage of appraisers available along the front range.
Impacts of the Housing Bubble
Problem appraisals didn’t create the housing bubble we saw burst in 2008. However, they certainly became one of the elements that gained a heap of bad publicity at the time.
In the years preceding the housing crash, the appraisal process became border line fraudulent. Mortgage lenders would use favorite appraisers and weren’t shy to pull business if they didn’t receive the appraisal they desired. This in effect inflated the already budding housing bubble.
When the bubble popped in 2008, appraisals inevitable received part of the blame. In the wake of the meltdown, the Dodd-Frank act was passed. Ensuing regulations came down on appraisers, lengthening the already tedious process of submitting home appraisals.
Finding Comps for Boulder Appraisals
The increased difficulty of finding comparable properties has also contributed to the lengthier process of Boulder appraisals. Residential valuations are based on the market value of the property, determined by comparable sales. Because no two properties are alike, it is up to the appraiser to make dollar-adjustments based on differences in the sold comparable properties.
Comps are a problem in the Boulder area because of the sheer lack of comparable transactions. The decline in available inventory across the Boulder market has only further limited available comps for Boulder appraisers. Even today’s most experienced appraisers can sometimes struggle to develop a comparable report up to par with today’s appraisal guidelines.
Boulder Appraisals: A Game of Supply and Demand
The Boulder appraisal process has been further hindered by a shortage of available appraisers along the front range. While we have seen a decrease in available inventory throughout the Boulder market, the Denver market is erupting. With record numbers of homes going under contract each month, appraisers are struggling to keep pace.
A comeback of the Denver market since the burst of the housing bubble was first noticed in 2013. Yet when the Brexit vote caused interest rates to plunge over the summer, the real estate market hit a tipping point.
Research shows that the cost of appraising a standard home in the Denver area has jumped from $350 to upwards of $600 in just the past three years. These increases reflect the heightened demand for appraisal work, met with the unchanged supply of available appraisers.
Future Prospects
The prospect of rising interest rates and the close-out of the summer season may curb demand in the real estate market. A decline in demand could cause the appraisal market to regress, though it is doubtful to return to its state three years ago.
For now, closing deadlines continue to be pushed back. Due to complications discussed prior, Boulder appraisals are only more prone to these changes. Once a lasting only a couple weeks, Boulder appraisals are now taking up to a month to complete.
Boulder Home Buyers Should Do This
Purchasing your Boulder abode, consider ordering the appraisal the moment you go under contract.
Why? With the new normal time frame of thirty days to get a Boulder appraisal accomplished, you need every day the contract affords you. In most cases, you’ll have time to cancel an unneeded appraisal following the Inspection period if buyer and seller are unable to resolve.
This becomes even more of a time crunch for consumers utilizing a VA home mortgage. Little known secret: VA only authorizes appraisals on Mondays. Turning in a request on Tuesday? It won’t be ordered for another week. With the timing issues of today’s appraisal market, it is crucial for buyers to quickly order the appraisal in the Colorado market!
Above and Beyond Customer Service Gets Deals Closed
Part of the process, whether I’m assisting a first time home buyer or working for a Boulder home seller, involves meeting the appraiser at the property. Let’s Move Austin, a blog I follow on occasion points out how important it is for buyers to involve their Realtor in the process.
This can be helpful if an appraisal comes in low. Perhaps the professional assigned for the appraisal didn’t understand the specific market; a Realtor can review the comparable properties and make suggestions to help all the parties get to a successful Boulder appraisal valuation.
On the Listing Side, I work to be present at every appraisal, with a detailed packet of information for the appraiser. This includes recent sold comparable homes, all the other offers (to help explain the contract price), the purchase contract with the negotiated price highlighted. And I make certain the lights are on and the house is showing nicely.
Consumer Home Mortgage Experience
The bottom line, as you purchase your Boulder home or wait for a successful mortgage approval and Boulder appraisal valuation, you’ll need to budget for more time. The limited number of appraisers out there are busier than ever. Gone are the days of ten day closings with a mortgage. Be prompt in ordering the home valuation and patient on its delivery. A good Realtor will make a world of difference to achieve the best case scenario: an on time for value completed Boulder appraisal.