Five reasons to value your real estate appraiser

Five reasons to value your real estate appraiser

Did you catch my cheesy pun? I hope so-appraisers do have a sense of humor you know. All kidding aside, appraisers can provide much 5 reasons to love your appraiser needed value to the home buying process since they are the only unbiased third party to the sales transaction.

We are often seen as “deal killers” standing in the way of people wanting to buy their dream house, however looking at it from a different perspective appraisers should be seen as advisers helping buyers to make smart decisions by not overpaying for what is usually their largest investment. Let’s take a look at the top reasons to value your real estate appraiser and take advantage of their expertise to help you make the best decisions possible.

Honest opinion about value

The main job of a real estate appraiser is to provide an honest and unbiased opinion of value based on market data. This is valuable to buyers because we have no emotional ties to the property and are able to value the property accurately based on market data.

If we were to provide an opinion of value for a house for more than it was worth, and the buyer’s needed to sell in six months due to a relocation or other similar situation, it is highly unlikely that they could sell it for what they paid for it. An appraiser’s main objective is to determine what the majority of like minded individuals would pay for a home, not one or two who are exceptionally motivated.

They’re your personal appraisal wikipedia and can answer any questions you have

I like being able to provide value to people by answering their appraisal questions. Most people only get an appraisal when they buy, sell, or refinance their home, and that’s on an infrequent basis, so they may have questions about the process.  I’m also asked questions by real estate agents regarding how and why appraisers do certain things or if it’s okay to use comparables from a certain area.

One of the main reasons I started this blog was to be able to provide answers to people’s commonly asked questions. If one homeowner or real estate agent asks me a question I figure that there are many more people asking the same thing. If you’re reading this blog and ever have a question feel free to contact me. You can even use the tool on the right side of this page to leave a voicemail with your question.

Help you with negotiation

Most people believe that the only course of action when an appraisal comes in low is that the deal is dead, however there are other options. If an appraisal comes back low, the report can then be used as a negotiation tool. A counter offer at the appraised value would put the buyer in a better equity position than proceeding with the original deal and paying for the difference. Since a lender will not loan more money than a house is worth, renegotiating the deal and getting the price lowered can help the transaction.

Help you with square footage

Real estate appraisers are able to provide help when either homeowners or real estate agents have questions about what the accurate square footage of a home is. In my experience, the square footage provided by the county property appraiser’s office is rarely accurate. The square footage is something that needs to be known when selling a home and this information is provided in a pre-listing appraisal.

If an appraisal is not needed then only a floor plan sketch can be provided. It is important that the living area be determined using a common standard so most appraisers use the ANSI standard. I’ve provided more extensive information on this topic in a former post if you want to read more.

New agent education provider

If you are a broker and want to educate your new agents on the end and outs of the appraisal process who better to do this than an appraiser? I speak at numerous real estate offices to help educate agents about how and why real estate appraisers do what they do. For the longest time our job was shrouded in mystery due to lack of communication between agent and appraiser, however over the last several years I believe appraisers have found the value in educating agents so they understand better about what we do.

There are occasions when the appraisal does not come it at the contract price, but lately I have found that if this occurs with an agent whose office I have spoken at, they understand better why this occurred because I have educated them about these situations and why they occur.

Question

If you are an agent do you have an appraiser you can call and ask questions? If you have any questions I have not covered here please leave me a message below, and as always thanks for reading.

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Comments

  1. Thank you for talking about how appraisal services need to provide honest opinions. It makes sense that remembering this can help you find someone you can trust and who can help you with the job. I can see that making sure you choose someone who has the tools to get the job done right the first time around is essential.

  2. Great post Tom. To add to Ryan’s idea, maybe have an Appraiser Pride Parade. 🙂

  3. Another great post Tom. In an industry that’s often chastised you’re definitely a bright light leading the path for appraisers and providing those who aren’t with great education about the industry. Also, great comments from Tom Molinari who’s literally one of the top appraisers in all of CA. I also would have liked a title like “5 Reasons to Love Your Appraiser” although I do like Ryan’s idea of a National Hug Your Appraiser day. Thanks again Tom for all you do for the industry and how you represent appraisers in such a great manner!

    • Thanks Roy, I appreciate the kind words. I agree with Ryan too, we should push for that holiday! Tom M. is always a great commenter that I appreciate a lot.

  4. And, appraisers are usually nice people trying to do a good job in the public interest, make a living, and put food on the table for their families.

    Your point on educating realtors, the public, and others who need our services about exactly what we do is key here Tom. Thanks for pointing that out. The fact is that our training and education is different from that of real estate agents. We are not paid to market a property to get the highest price for the seller. We do not have a fiduciary responsibility to negotiate for the lowest price for a buyer. We are third party independents trained to analyze the market data, determine the contributory value of different facets of the property, and develop that market value of the property based upon our findings. How we do that is misunderstood by others in real estate business who sometimes believe that our job is to support a sale price. That is not the case and it is important that appraisers educate those who have a need for our services so they know where we are coming from when we complete an appraisal of a property for them. Thanks again Tom for a great post.

    • Always appreciate your kind words Tom! I think our number one job in the public relation realm of appraisers is to inform and educate the public and our clients about what we do. While people may not be happy about the results they will at least understand it. Some people believe that an appraiser’s quality is measured in how fast they do a job and if it comes in at what it needs to, but I disagree. An appraiser’s quality is largely based on how well they communicate their value opinions and help their clients understand the process.

  5. In the spirit of this post, maybe it’s time you establish National Hug an Appraiser Day…. 🙂 Nice job as always. I think it’s easy to point the finger at appraisers, especially when things go wrong with a transaction. Let’s not forget some of the benefits and positives though.

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