The current practice of overbidding has resulted in 23 percent of home sales being delayed due to appraisal issues. Morevoer, 12 percent of the proposed deals ultimately fell through as the problem could not be resolved.

Since mortgage lenders will only lend the amount of the appraisal, those buyers seeking funding are increasingly having a difficult time.

To get around the low appraisal issue, come buyers are waiving the appraisal contingency, meaning they will make up the difference in cash.

The sudden surge in home buying and refinancing brought about by historic low mortgage rates is causing a delay in turnaround times for appraisals. Some lenders are now quoting two to three-week delays in many cases.

The good news is that appraisal waivers are increasing in some markets through automated underwriting systems and consumer-friendly online document exchanges.

Because of the finite number of appraisers and underwriters available, delays will continue without an increased use of automated technology.