I got an ill-mannered complaint email about how an evil loan officer from another company ordered the appraisal without waiting for the inspection to be done, and it turned out there was a minor problem that the seller likely could have had repaired, but this clown chose to walk away, and as a result is griping about having to pay for the appraisal.
First, that appraiser did the work based upon your representation you wanted the property. You signed a purchase contract saying that you were intending to purchase the property. You submitted a mortgage loan application, and as a result of that someone acting on your behalf ordered the appraisal, which has to be done if you're going to get a loan. That appraiser did the work. They are entitled to be paid.
Second, scheduling an appraisal promptly protects you. The longer the entire process takes, the worse the loan you are going to get. If they didn't order the appraisal right away, the loan officer is gambling with your money. But rate locks aren't free, and they are for definite periods of time. The longer a rate lock is, the more you will pay for it. Furthermore, if you go beyond them you're either going to pay a tenth of a point for five days, or a quarter for fifteen (both assessed in full on the first day of extension) or pay worst case rates. The person who ordered the appraisal was acting in good faith to protect your interests based upon the representation that you wanted the property. If you didn't, why did you make an offer and sign the purchase contract and submit a loan application? Speed is important in getting a loan done, and even if in some instances people like you end up paying for an appraisal when they cancel escrow, the people who actually want the property benefit by having everything done right away. Appraisals are around $350. A tenth of a point of $400,000 is $400. A quarter of a point is $1000. Or you can pay a quarter of a point more - $1000 - for a longer rate lock in the first place.
The assumption when you sign that purchase contract and loan application is that you want the property and loan, which means the appraisal has to get done, and you want the lowest rate, which means the shortest practical lock time. People get sued - successfully - for not ordering the appraisal right away. This person was doing exactly their job, and in the best possible way for a buyer who really wants the property.
I have stated before that I will bet money, based upon no additional information, that a loan done in thirty days or less will be a better loan than one that takes sixty or more. Due to all the new regulations and procedures delaying the loan, add thirty days to those numbers but the principle is still valid. Ordering all of the services: inspections, appraisal, disclosures, zone report, etcetera, right away is part of how a good loan officer - and good agents - get a transaction to close fast, on time, and to the loan quoted. For the buyers who carry through on their intention, as evidenced by that signed contract, doing this is the only correct way to do business. Delaying the appraisal until after the inspection adds to the time it takes to get the loan done. In the vast majority of cases, the inspection is going to reveal something you didn't know. Sometimes it's trivial, and sometimes it's major, and all gradations in between. Most people manage to deal with it like mature adults and negotiate something reasonable. I recently negotiated some sellers to pay $20,000 plus to hook up a sewer connection when the septic was shown to be failing, something I had no way to know when I checked out the property. The repairs were made, the deal closed, my clients are in the property and very happy. But this person who wrote me to complain canceled and walked away from something far more minor. How do you think the seller feels about everything they had to pay for, now that this person who said they wanted to buy the property flaked out?
A purchase contract should not be something you enter into lightly, thinking you can get out of it easily if the slightest thing goes wrong. This is part of the reason for buyers agents. They should explain to you that this is a binding contract, and you are agreeing to purchase that property, and in many cases the seller can sue to make you buy the property. A buyer's agent will also spot a lot of problems before you make the offer. Don't think of them as building inspectors; few agents have that license (and I'm not one of them). But there is nothing that says that I can't spot potential issues and bring them up. In the particular case of the person who emailed me this question, it was a trivial issue that I spot and tell my clients about on a regular basis before they make an offer, and as a result, we have dealt with the issue before the contract is agreed to.
Caveat Emptor
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