What percentage of our Purchase Loans actually requires a full appraisal? First note that there are three types of appraisals the underwriting process may require:
1. Full Appraisal – 1004 Report. Requires an interior inspection of the home and comparable sale data. This is required for FHA transactions, or conventional loans with 5% down payments.
♦ In April, 43% of our purchase loans required a 1004.
2. External-Only Appraisal with comparable sale data – 2055 Report.
♦ In April, 47% of our purchase loans required a 2055.
3. External-Only Appraisal with NO comparable sale data. This process assumes the purchase price has established the home’s value and the report does not indicate a value.
♦ In April, 10% of our purchase loans required this appraisal.
Less than half of our purchase loans require an appraiser to step foot in the home. For the Realtor, this means:
• If you are waiting to hear from an appraiser to make an appointment, that call may never happen.
• If you plan to use the appraisal to renegotiate your buyer’s offer, be prepared that the report may not reference value at all.
• No required repairs will come if the appraiser doesn’t actually enter the house.
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