Things agents do that appraisers hate
For the most part I haven’t had any major problems with most of the real estate agents I communicate with during my job as a real estate appraiser. With that being said, there have been instances where my peers have shared various things agents do that appraisers hate so I thought this topic would be worth discussing.
I’m not writing this post to point fingers or lay blame but rather to bring these points up to help improve with appraiser-agent interaction. We’re all in this together, so anything I can do to help agents understand what appraisers do and why they do it I will.
We’re All In This Together
One of the things I am big on is education and I do my part to educate agents on the inner workings of appraising. This blog is one way I do this. I receive questions all the time from homeowners and real estate agents with questions about why an appraiser did what they did in their recent appraisal.
Whenever I get asked a question it’s my belief that if one person has a question then there’s probably many more wondering the same thing, so why not answer this question and share it with all?
Another thing I like to do to educate the public about appraising is to speak at local real estate offices. If you’re an agent and need a speaker to help inform and educate your agents about the appraisal process why not give me a call and we can schedule a time to visit your office.
They Did What?
Listed below are some issues I have ran into or ones that I have heard other appraisers talk about. If you have something to add, please leave a comment, I would love to hear your take.
Price listings based on what the seller wants out of the home- Appraisers get blamed for deals falling through a lot but I don’t think it’s always their fault. There are times when the deal was dead before it even got started.
Most of the time this occurs when a home has not been priced based on recent sales and listings, but instead it was listed for an amount that the owner thought it was worth, or they needed to get out of the home. Sometimes these two values may be the same but more often they are not. The bottom line is that the mortgage appraisal will be closest to the contract price when the list price is based on recent and similar sales and listings and not on feelings.
Don’t take time to get accurate square footage- When all else is equal with housing, there is a direct relationship between the size of a home and its selling price. Bigger homes typically sell for more than smaller homes.
With that being said, it’s important to know the accurate square footage of a home. When you have this information it makes it easier to compare homes and arrive at a more accurate list price. You can learn how to get accurate square footage from this recent resource guide I put together.
Don’t return phone calls- One of the things appraisers have to do during an appraisal assignment is to verify information about the comparable sales we use. This is typically done by speaking with the agents involved with the sale.
When the appraiser is not able to speak with the agent, because their call was not returned, this causes the appraisal to take longer than normal. This can delay the loan process and possibly the closing. Appraisers are required to verify this information so they typically don’t have any way around it.
If an appraiser calls you there is a good chance they just want to ask a couple of questions about one of your sales. Believe me, appraisers greatly appreciate the information that real estate agents give them about their listings because it helps us to understand why a home sold for what it did. The price may have been affected by recent updates or even a divorce situation. This type of information is helpful for appraisers.
Wait to give relevant information until after home doesn’t appraise- It is better to provide all the information you have on a listing up front before the appraisal is completed. This will allow the appraiser to consider all the relevant information and provide a more accurate opinion of value. If the appraisal comes up short it is more difficult to reopen the appraisal and include the information that was not considered to begin with.
Not knowing what a comparable sale is- One of the most common problems I see when reviewing comparables provided by agents is their lack of “comparability”. The sales provided are based more on bracketing an estimate of value rather than the attributes of a home like its square footage, age, and features.
There is a big difference between a sale and comparable and its important to know what they are. By using homes that are true comparables rather than just sales there is less chance of a deal falling through.
Do you have any questions about how agents and appraisers can work together more effectively? If so leave a comment below and let’s keep the conversation going. As always, thanks for reading.