For many, the real estate appraisal process can be quite lengthy. It can take days to weeks to even get an appraiser out to your home, after you complete your loan application. The appraiser comes out to your home, completes the on-site inspection portion of the appraisal, and then usually anywhere from another day to a week later, the appraisal is completed and sent on to the client.
When we’re about to leave someone’s home, inevitably, we hear the question, “So how long will it take before I hear from the bank?”
In this post, I want to briefly describe what happens after the appraiser pushes the Send or Upload button and turns in the appraisal.
First of all, it’s important to remember that a large number of banks and mortgage companies do not order their own appraisals. By that, I mean that the appraisal request doesn’t go directly from the loan officer’s desk to the appraiser’s email. There are some that do this, for sure. But most operate in one of two ways:
- Appraisal / Compliance Department within a bank. In this scenario, a bank has a completely separate department – usually either one person or a very small handful of people – who send out appraisal requests and receive back the reports. The loan officer usually will not know who the appraiser is in this situation, and this provides a certain necessary level of insulation between the loan officer and appraiser. If the appraiser has questions, they can ask the appraisal compliance department at the bank.
- Appraisal Management Company (AMC). An AMC operates much the same way as an appraisal compliance department within a bank, but is usually a separate entity all together. AMCs are third-party vendors oftentimes located in another city or state. They are stand-alone companies who contract with banks and mortgage companies to provide assistance with the sending of appraisal orders, and retrieval of reports.
In either situation, there is usually some level of review done on the appraisal before the final report is submitted to the lender. This is done regardless if a bank uses an in-house department or a third-party AMC. The level of the review can vary widely, though. Some simply check to make sure the lender and borrower names are correct, and that the appraiser appraised the correct house! Others (usually AMCs) go through a very thorough multi-step review that checks for errors, compliance issues, missing information or comments, and on and on and on and sometimes on and on and on some more.
How long does this review process take? In my experience, it usually takes up to one week from the time the appraiser delivered the report. Sometimes, if the review is limited, and there are no errors, the lender will have the report the same day it’s submitted by the appraiser. Other times, if the review is more extensive, and there are revisions needed to be made by the appraiser, it could take up to a week or more.
I always like to briefly explain this process to homeowners, and encourage them to call their loan officer in a week or so from the time we leave their house, if they haven’t heard from them by that time.
So here’s a timeline that might sum it all up for you (these numbers will vary depending on the appraiser, of course. But they’re a good rule of thumb).
Appraisal is ordered by the bank.
Appraiser calls to schedule the appraisal (1-7 days later).
Appraiser visits the home (1-7 days later).
Appraiser submits the report (1-7 days later).
Review process is complete and appraisal report is submitted to the lender (1-7 days later).
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So you can see from the timeline above, once the appraisal is ordered, it could take a week before you hear from the appraiser. Why is that? Because some AMCs like to ‘shop around’ for the cheapest and/or quickest appraiser. They receive the request from the bank, and then they try to fill the order. If it’s a complex property, or in an area with few appraisers, it might take a few days to find an appraiser willing to accept the order. Or, if they offer to pay the appraiser $150 and want it back in 24 hours (yes, I’ve seen this!), then the appraiser will likely make a counteroffer. This approval process sometimes takes days!
Depending on the process, once the appraisal is ordered, it can be anywhere from a week to a month before the lender gets the appraisal back. The two main factors here are (1) how busy the appraiser is; and (2) how long it takes the AMC or compliance department to review the appraisal and submit the final report to the lender.
It’s definitely not a super quick process, having your home appraised. But do you want it to be? Do you want your lender and appraiser to rush through the valuation of your largest investment? I sure don’t! A good appraisal should take time.
I hope this post has been helpful and has given you a little glimpse into the appraisal process. If you have any questions, let us know. We’re happy to help!
Helping homeowners navigate the appraisal process,
Ryan Bays, SRA, AI-RRS