Though the appraisal process can be waived, and it’s not all that infrequent — about 25% of transactions, as of August — when the appraiser disagrees with the buyer and seller on a home’s value, things can get awkward. For all-cash offers, the appraiser’s opinion doesn’t have any direct effects, though it can still influence the buyer or seller’s decision to stick with the deal or not. But for contracts involving a loan, the lender frequently will only lend up to an amount based on the home’s appraised value, even if the buyer offers more than that. And quickly rising prices make appraisal values frequently lower than the asking price, while many buyers are actually offering over the asking price.
Appraisers’ inability to keep up with a fast-paced market is slowing down many transactions. Buyers want to buy quickly, but appraisals take time. More disastrously, deals are forced into renegotiation when buyers find the appraisal is too low for them to qualify for a loan for the amount they expected. This results in 23% of deals being delayed after the appraisal process. About half of these delayed deals end up completely falling through.