Recent closing activity is high, but everything is so much more complicated, and we're not even dealing yet with the new TRID mortgage rules that will affect loans made after October 3rd. The banks are getting ready for a higher level of scrutiny from the Federal government, so they are closely monitoring all deals to make sure they don't get in trouble for lack of due diligence.
For example, a recent residential closing was held up over an issue of peeling paint - on about 12 feet of fencing in a backyard. The appraiser had to come back out and reinspect. Note that appraisers are not hired directly by the bank. According to Federal law, the bank has to hire an appraisal management company which sends out an impartial, third-party appraiser, so there is no hint of favoritism. These management companies didn't even exist before, and therefore appraisal costs have gone up to pay for them.
The appraisal is very crucial because there have been many cases where the appraisal has come in much less than the offer on the table, so the bank isn't going to loan the full amount and the potential buyer may not be able to make up the difference.
Occasionally, an appraiser will claim they can't even talk to me and go about their job silently. Actually, we are permitted to talk to them and present facts, but we aren't allowed to influence them. There are really no checks and balances on appraisers who may write bad appraisals and yet they keep getting assignments. The Federal government's position is that as long as they have a license, all appraisers are equal.
Today, we're seeing around 30% of transactions as "all cash" deals as buyers and sellers are happy to opt-out of this system. Real estate transactions are so complicated these days that you really need an experienced realtor to help you through all the potential pitfalls. If we can help you with any of your real estate questions, or you would like a free market analysis of your home, give my office a call anytime at (914) 761-7878.