Want some tips for choosing the best appraiser?
Picking the right real estate appraiser is important because they are not all equal. A person’s home is usually their most valuable asset and when you’re selling it you want to make sure it is priced accurately. Today I’m going to give you some tips for choosing the best appraiser you can.
As I have said in the past, there are two things that can happen if your home is not priced correctly. If it is priced too low it will probably sell quickly but you’ll leave money on the table. If it is priced too high you run the risk of it staying on the market longer than it should.
When you finally decide it’s priced too high you’ll lower the price but then the damage is already done. Buyers will possibly think something is wrong with it and start making lowball offers.
Why not start off on the right foot by pricing it correctly, to begin with? In order to do this, you want to choose the best appraiser you can.
Simple steps for choosing an appraiser
There are no secret tips for choosing the best appraiser because it’s just common sense, so let’s get started.
1) Interview Them– It’s better to talk with the appraiser up front before getting the appraisal to make sure that they are qualified and possess the characteristics we’re discussing here. A reputable appraiser will not mind answering any questions you have. You’ll want to ask them questions about the items discussed below.
2) Heart of a teacher– You may not have considered an appraiser as being a teacher but you should. Anytime you are going into a situation where you are not an expert it’s good to have someone that doesn’t mind explaining and educating you on the basics of what is going on.
The appraisal process can be somewhat confusing if you have never gone through it before. Your appraiser should explain to you what he will be doing both while he is at your home and after the visit when the research and analysis take place.
I don’t mind explaining what I am looking for when I am at your home or what I will be doing after the visit. Most of the work that an appraiser does occurs after we visit your home. We must research sales, analyze market trends in your area, and calculate adjustments for differences between your home and the comparables.
While you don’t need to know enough to become an appraiser yourself a good appraiser will give you a CliffsNotes version of the process we go through.
3) Education– As with any profession, it’s important to keep up to date on the latest trends and development within your field and appraising is no exception. Appraisers are required to have a certain amount of continuing education hours each year so the bare minimum of educational requirements is met.
I’ve covered professional designations below under credentials so won’t say anything else about that. If an appraiser is a member of a professional organization they are probably required to take more than the minimum state requirements which is good for you as a consumer because you will benefit from their knowledge.
4) Experience– It’s important that the appraiser you choose have extensive experience performing appraisals as well as experience doing work within the neighborhood your home is located in. This later type of experience is known as “geographic competence“, meaning that they have practical knowledge of your neighborhood and market because they have actually done other appraisals in the area.
As an appraiser in the state of Alabama, I am legally permitted to do work all over the state however, I would not think of doing appraisal anywhere expect around the Birmingham area because I am not familiar with the market in other areas, such as the Gulf Coast. If I were to take the time to learn the market and/or associate myself with appraisers in the area I could then do work in the area but this is typically time and cost prohibitive for occasional jobs. It is better to hire someone from the area who does work all the time and knows the market.
5) Recommendations– One place to start your search is to ask friends and family if they have used someone in the past that they were pleased with. Another group of people to ask are local real estate agents. They have regular dealings with appraisers all the time and can tell you who they trust. Check out my Testimonials page to see what agents say about my reputation as an appraiser.
Remember, it’s not about getting the highest appraisal, it’s about getting the most accurate value so that you can sell your home for what the market will support, in the most reasonable amount of time. If you do get a high appraisal but it is not realistic and market supported then you may experience one of the two scenarios I mentioned above.
6) Data sources– Where appraisers get their data is not an area that many people may think about. It’s important to keep in mind that appraisers use market data to develop their opinions of value.
You’ve heard the old saying, “garbage in, garbage out”, right? If appraisers do not use accurate and reliable data sources then their value estimates may not mean anything. The piece of data that is typically the most inaccurate is the square footage of the home. This is one of the reasons the Zillow zestimate is so wrong because the square footage figures they use are wrong.
The Birmingham, Alabama area is unique in this respect because we have a something that many areas don’t have and that is a data group ran by appraisers known as AGDA. The group collects and shares with its members the physical data on houses that have recently sold. The square footage information is measured by appraisers and allows for more accurate and reliable value estimates. It is important for your appraiser to have accurate and reliable data to sources to use in their appraisals.
7) Credentials– I am an SRA member of the Appraisal Institute and our requirements far exceed the state requirements. I’m not saying that your appraiser has to be a member of the Appraisal Institute but I would recommend that they hold some designation by a reputable appraisal organization because as I said they are going to normally have more education that someone that just holds the minimum state certification.
Do you have any questions about the seven tips for choosing the best appraiser I have outlined here? If so leave your thoughts below and we’ll keep the conversation going. As always, thanks for reading.