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Chris Salese: Napa's Loan Ranger: Appraisal costs rocket higher

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Over a year ago, the world ran into a global pandemic. Suddenly we were forced to slow down and ultimately stop because of the super-bug. Our lives were running fast before this happened so moving into a lockdown shocked everyone.

But now we are waking up and coming out of the lockdown. In fact, we aren’t walking, we are running out of it. It feels like everything is moving faster than it was before we had to retreat to our homes for the last year.

Unfortunately, the speed in which we are trying to rebound economically, socially and mentally from the pandemic is causing problems that we did not see coming.

For example, the lending industry was caught off guard by the sustained and steep drop of interest rates last year and how COVID-19 impacted the entire operational chain of moving home loans through the system.

An incredible amount of time and money was spent by lenders to quickly retool their systems in order to be able to service their existing loan portfolio and to provide as many homeowners as possible the opportunity to lower their borrowing rates via a refinance transaction.

Even though technology assisted with this process, it still takes a tremendous amount of human capital to make it work.

As such, it has caused fatigue along the way for many in their respective positions.

I’m talking about lenders, escrow officers, inspectors, contractors and appraisers. Now it has rolled up to include Realtors as well. There are very few who could have forecasted the current real estate market conditions that we are experiencing today.

Buyers are trying to take advantage of the COVID fueled low-interest rate cruise ship before it heads out to sea and are lining up all over the place looking to purchase.

In turn, sellers are pricing their homes at lofty levels because they can. On top of that, everyone wants to move fast. Everyone wants it done asap. It’s frantic, almost panic-type of intensity.

When this happens, you need to be mindful of your financial commitments. It is crazy—I’ve never seen the cost for property appraisal reports as high as they are today.

If you are unable to qualify for what’s called an appraisal waiver via either Fannie or Freddie, then you’ll be required to get an appraisal on the property that you are trying to finance. Even if you remove your loan and appraisal contingencies on a purchase, without a waiver, an appraisal is still required.

Therefore, the pressure being created by both buyers and sellers plus all of the parties involved in facilitating their real estate transactions has resulted in a ridiculous amount of pressure on appraisers to perform in short periods of time.

In addition, large earnest money deposits are at stake with purchase contracts and the odds for more errors, in general, have increased too.

If everyone can take a collective deep breath, that would go a long way to preventing a bigger mess down the road.

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The Napa River Bridge (now known as the George F. Butler Memorial Bridge) was built in 1977.

Chris Salese can be reached at or 707-363-4439. He is a licensed California mortgage lender (LO NMLS #254469 — CA-DBO #254469 Corp NMLS #1850 Equal Housing Opportunity.

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Chris Salese is a Napa mortgage expert who covers all topics lending related in his column: The Loan Ranger. His column runs on the fourth Wed…

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