In 2005 the relationship with real estate agents and appraisers was very very different than it is today. Lenders could call up an appraiser and order the service with relative ease. They had their list of top appraisers they enjoyed, and the efficiency of the process was good, but according to some was a contributing factor to why the real estate industry crashed.
I am not here to make a judgment call on that in any one way or another, as my experience with both appraisers and mortgage lenders has been really quite good.
For whatever reason though, the government decided that appraisers and lenders should not ever speak. This created the need for a third-party to step in as a middleman company. This layer that was created is now part of a checks and balance system and even though it can be a bit clunky, and sometimes perceived as ridiculously cumbersome, it protects you as the buyer.
The bank wants to make sure that the property is worth the money that you’re buying it for. The contract states that if the property does not appraise for the sale price, then the seller could sell it for less… In which case the buyer would have to buy. And wouldn’t that be great? To sign up for a purchase and agree on a price, and then further along in the process be able to buy for less… Not a bad deal for the buyer.
What this means from a real estate agent’s perspective is that when a problem occurs, we are not really at liberty call the lender and expect immediate results. The lender has to go through their third-party company, make the formal request, and evaluate the problem accordingly. Appraisal problems are not fun. It can take a good transaction that is well on its way to the closing table and completely derail this process. This is one of the main reasons why it is important to work with an agent that knows real estate values.