Over the past several years appraisers and real estate agents have had a confusing relationship. When I say this I am mainly talking about an agents understanding of exactly what they can and cannot talk to an appraiser about. I thought I would approach this topic from a qualifications point of view and look at exactly what agents are allowed to ask the appraiser in the hopes that they can determine if the appraiser is actually qualified to appraise the property that is under contract. Lets look at five questions you should ask the appraiser before you give them the go ahead to look at the house. If they don’t answer the questions adequately you might want to talk to the loan officer and ask them if the appraisal can be reassigned to an appraiser that my know the market better.
Where are you from (or where is your office based out of)?- This sounds like a simple question but it is one that should be asked. Lenders continue to use appraiser that may be based out of state, and when they do we continue to see problems with geographic competency. I’m not saying that out of state companies cannot do a good job but I have seen many situations where they do not know the area well enough to do a credible job.
How much appraisal experience do you have in this area? Many times appraisers attempt to work in areas where they have no experience. This can occur as a result of the previous item when they are from outside of the area and do not have adequate knowledge of the market, however it can also occur when new appraisers take on assignments they are not ready for. Everyone has to start somewhere, and I’m not against appraisers gaining experience, however if they don’t have sufficient experience in an area they should seek the help of someone with more knowledge of the market.
Where do you get your sales comparable information from? This may seem like a crazy question to ask but it really matters and I’ll tell you why. If an appraiser is going to do work in an area they need to use reliable comparable market data. In the Birmingham, Alabama market there are two major data sources. These are the Birmingham Multiple Listing Service and the Appraiser Group Data Association (AGDA). Most metro areas have their own multiple listing service and if your’e an appraiser you should subscribe to them. Birmingham is unique with the AGDA service, and it is almost impossible to provide reliable appraisals without being a member of this service. By asking this question you can get a good idea if the appraiser is serious about their role as an appraiser by finding out if they utilize the most accurate sales data in their market.
What are your qualifications? As I stated previously, everyone has to start somewhere but if you have a particularly complex assignment you may want a more experienced appraiser to tackle this one. If the appraiser doesn’t have a lot of experience, do they have a supervisor who does? In addition to amount of experience you may also want to know if they belong to any professional organizations or if they just possess the minimum state requirements. I know some appraisers who don’t belong to a professional organization and they do a great job, however many professional appraisal groups have continuing education requirements that exceed minimum state requirements, so those belonging to these organizations may have more educational background. While this not a deal breaker it is certainly something to consider.
Do you have an electronic keypad to get into the house (or any other form of access) This is not as serious of a criteria as the previously mentioned four, however I thought I would include it based on the comments of an agent friend and it made sense. In the area I do business, the local Board of Realtors uses electronic lock boxes and if you are serious about your profession it is a good idea to pay the board for the electronic keypad to unlock the lock box so that you can schedule appraisal inspections at your leisure and you do not have to coordinate your schedule with the listing agent. This keypad should just be considered another “tool of the trade”.
Can you think of any other questions that an agent should ask the appraiser? Let me know by leaving a comment below.