Originally posted at Herring Consulting Company Blog
Appraisers are the worst, aren’t they? Always working against agents!
OK, real estate agents and brokers, now that we have your attention, we have a confession to make – we actually like you! We know you have a tough job and that to differentiate from your peers you work very, very hard. We also know that appraisers haven’t been the best at communicating with you and that’s on us. So here are some tips for working with those pesky appraisers from the point of view of those pesky appraisers.
TALK TO AN APPRAISER
Some agents and appraisers have this idea that they shouldn’t communicate. We don’t see many other appraisers out in the wild. In fact, when we go to networking functions, we are usually the only appraisers there. We love spreading good information and debunking myths. If you have questions, then invite an appraiser to your next meeting. Pick our brains. Just please, don’t throw things at us.
THEN THINK LIKE AN APPRAISER
When you set the listing price with your client, take an objective look at the market and the property features and don’t cherry-pick comparable sales to hit a certain number. Your appraiser won’t. A high listing might make your client happy at first, but it won’t fool the market and will lead to long list times and valuation issues. If you have a difficult property, get a pre-listing appraisal. Two other best practices are having another Realtor critique your comps and setting the list price BEFORE getting into sales mode and writing a boss MLS listing.
WRITE THE LISTING FOR BOTH THE BUYER AND THE APPRAISER
And speaking of those MLS listings, do your thing and sell your property, but what helps get you value consideration from appraisers is factual and specific information like the date and type of updates. For example, a common phrase like “kitchen is a chef’s dream” does nothing for us, while “complete kitchen remodel in 2016 including all new Viking appliances and granite counter tops” is an appraiser’s dream.
MAKE SPECIAL FEATURES PROMINENT
An appraiser should never be surprised by a major feature of the home. The most common issue we see is with solar. To be honest, the information provided on the MLS is inconsistent and the central Florida local MLS (MFRMLS) does a poor job of making solar prominent. It’s not even listed in the main Green Energy field! If you have solar, or another special feature, attach the specs and/or a portion of the Appraisal Institute’s Residential Green and Energy Efficient Addendum to the listing. Then be sure you any appraiser used on your listing is competent in that area of valuation.
SUBMIT A COMPLETE APPLICATION
Buyer’s agents: when your buyer is applying for a loan, make sure they are submitting a complete description of the property. If the buyer gets this info before applying then it helps the bank assign a competent appraiser and speeds up the appraisal process. For example, if you’re doing a new construction project, we need the building plans. The builder will provide these at the time of sale since they are trying to close the deal, but we have had major problems getting them from certain major builders.
THE APPRAISAL INSPECTION
We love it when agents show up to answer questions about the property and provide factual information, such as repairs and updates. Please bring a copy of the sales and listings you used when developing the listing and negotiated prices. We may not use them in our report due to lender specific guidelines or other more similar sales, but the insight into how the listing was priced is invaluable. As a listing agent, you cannot appeal an appraisal with which you disagree, so this is your chance to shine. Just be careful not to attempt to exert undue influence. Don’t even joke about bribes or threats. As long as the conversation is professional and about the home and the market it’s all good.
A few things to keep in mind when reading the appraisal report:
- The listed client is the owner of the report. That is the person with whom we can communicate directly about the report itself unless there are provisions in writing.
- Market value is the most likely price the home would bring, not what the current buyer and seller have negotiated. Essentially, in a purchase situation, the client is asking, “If I had to turn around and put this house on the market, can I get my money back?”
- We previously wrote about how to dispute an appraisal. If you’re consistently running into appraisal issues, then maybe the pricing strategy is off.
As appraisers, we pride ourselves in using common sense and all the available math and tools to create accurate valuations. We’re not number hitters or avoiders. We simply want to provide the market with good information for making intelligent decisions. If we can help you or your clients with any valuation issues, please reach out!
Seth Philip Shore is an associate appraiser with Herring Consulting Company. Seth comes from a 10-year career in retail banking before he joined the firm.Herring Consulting Company is a real estate appraisal and appraisal review firm located in historic downtown Winter Garden, FL. The firm’s owner, David B. Herring, is a state-certified general real estate appraiser with over 20 years of experience in valuing all property types.