Solano Real Estate Scene: Solano appraisals in 2020s see highs, lows as market shifts

Jim Porter

Article By: Jim Porter

Residential home appraisals are done by licensed appraisers. Over the past three years, the shortage of licensed appraisers in California has been blatantly evident.

The Home Value Code of Conduct rule, or HVCC, that was created after the crash in 2008 drove some great appraisers with long-term lender relationships out of business because lenders have not been allowed to order appraisers directly through the appraiser of their choice since HVCC. Lenders cannot even talk to the appraiser prior to the appraisal being done to prevent lender influence on value.

The other reason for the shortage is that 70% of the licensed appraisers in California are over 50 and only 20% are under 40.

It’s also difficult to become a licensed appraiser. A college degree is required, and the rookie appraiser must work under a licensed supervising appraiser for a year or two. Very few senior appraisers want to take on an apprentice. The amount of revenue is not enough to go around for the two appraisers, and the appraisal management company that takes a piece of the pie for being the order-taker from the mortgage lender. Lenders must order appraisals through an appraisal management company and then that company puts the order out for bid to all their approved appraisers on the company’s roster.

Many Solano County residents in 2020 and 2021 had to pay 25% to 100% more than normal for appraisals because refi-mania and the 2020 and 2021 seller’s market, where buyers had to write aggressive 21-day close of escrow offers. Appraisers could charge $1,000 to $1,500 for rush appraisals in Solano County.

In 2022, the appraisers, like the lenders, are hungry for business. Now lenders can have appraisals done quickly for less than $700.

One more thing for you potential buyers out there sitting on the fence: An appraised value is determined by a market analysis based on comparable homes that have sold within the past six months. Now that we are nearly in September, a buyer can feel comfortable that the appraised value will be based on today’s market and not the buyer-frenzied market in 2021.

Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.

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