It took 10 days longer for our Boston clients to close on their homes in June than it did in May. In March, closing took only 45 days. The good news for our clients is that even though it may take a while to close, only two of our Boston clients’ deals have failed to get financing since February.
The main reason closing is taking longer is because on May 1st, the Federal Housing Finance Agency’s Home Valuation Code of Conduct (HVCC) took effect. The HVCC is designed to make home appraisals more reliable by restricting the interaction between mortgage lenders appraisers. Since May 1st, lenders can’t deal directly with appraisers. Instead, lenders schedule appraisals through third-party management companies. This adds a buffer between the lender and appraiser, but it also adds time to the process. You can get all the details in the official statement from the Federal Housing Finance Agency (25K PDF).
“Be prepared for possibility of a delayed closing. With the new guidelines, it’s taking up to 14 days to get homes appraised,” says Hannah Driscoll, one of our Boston agents.
Hannah has recently begun advising her clients to order their appraisals as soon as they know they’re going to move forward on the home.
“Closing on time is priceless,” says Hannah. “So don’t wait until you sign the purchase and sale agreement to have the home appraised. Be proactive and order the appraisal right after the inspection if everything looks good. Paying a few hundred dollars upfront could save you a few thousand dollars and a lot of headaches if you have to extend you close date.”
Let us know if your home purchase has been held up by the appraisal?