Why do Real Estate Agents think they are Appraisers as well???

Good post Ray, Your writing in English is improving quite a bit. I know that was one of your reasons for blogging so just wanted to point out that it is working:)

I think it definitely dependa on the experience of the Realtor whether or not the appraiser would do a better job. The important thing to remember, in this more difficult market, is that apprasied value and market value are not the same thing. An appraiser is using historical sales where as a Realtor should also be using active, pending, withdrawn lsitings and more current market data. As a Realtor I am trying to establish what a property will sell for NOT what it's worth.

Ray, I agree with Bryant on your improving English.  While I only know you from AR and not the spoken word, I have noted your written messages have improved. (look at all the comments you have received here! )

Now to the topic.  There is a huge difference in a professional appraisal and a CMA. The difference that concerns me are not the lack of details but the fact that an appraisal is based on HISTORY not the MARKET.  So as an agent we have to be sensitive to that fact.  As in Jay's illustration above, pricing now based on old comps and not taking into account a declining market is a huge mistake.

With that said, since you (Ray) and I are in the same market, I know what you are talking about.  We have an abundance of poorly trained agents and managers that haven't got a clue how to handle this market. There collective ignorance of the job at hand is hurting the market, the industry and the consumer.

The sad thing is, these agents don't recognize the fact they are clueless.  I think that is what Ray is trying to state.  Only he said it nicer. 

kk

"Hi Ray"

As my husband, Broker Bryant, beat me to the punch. I will have to do a little twist on your post...

Here in Florida the Realtors are real big on Multiply Licensing. They have both licenses Realtor aka Appraiser...

You can only imaging the FAKE power they try to throw around in a deal!

They submit their offers with their own Appraisal. The houses they used for their FAKE Appraisal are normally no where near our listing.

Over the years we have learned to have a little fun with the Multiply Licensed Realtors...We enjoy messing with them. :0)

TLW "The Lovely Wife"...Like I Said On Another Post FAKE Is Funny...ROAR!

Ray,

Most everything has been said before I got here! I would like to point out though, that in my area, Broker's are also allowed to appraise homes.

Also, for myself, I do a lot of Broker Price Opinions on foreclosed properties and reevalutaions which I think gives me an edge over some Appraisers in the area.

I have to agree that the more experience whether being a Realtor or an Appraiser, the better they will be at pricing.

This is a very tough market right now and prices (here at least) have been dropping.

The final word: The House is only worth what someone will pay for it!

As Bryant and Krystal pointed out, there is sometimes a big difference between what a property will appraise for (and differences between sale and refi appraisals) and what a property will sell for in a given market.  Agents factor in current market activity, while appraisers are only permitted to rely on history.

Suzanne,

Are you saying that an Agents have a better handle on it, using current market activity? And Appraisers have "actual value"?

There are a lot of valid opinions expressed here, and some of them are conflicting. I can't believe there are places where appraisers don't have to be licensed! I thought about going for an appraisers license, but after looking at the cost of classes, and the amount of time required, I nixed that thought. Also there is a two year internship required, and the classes are not taught here in Honolulu on a regular basis, so we have to plan on spending weeks if not months on the mainland just to get the required training.

I also agree that as realtors we have a handle on market value, which can vary greatly from the appraised value, especially in shifting markets.

Lucky"

The appraiser licensing law has been in effect several years so it's not brand new.

I believe it applies to anyone that performs an appraisal in the state of Tennessee and collects a fee for it.

I know as real estate licensees we can't use the word "value" in relation to the..............well, the "value" of a home.

We're supposed to use phrases like:

• "this is a recommended listing price"    
• "this is a recommended listing range", or
• "this is a recommended purchase price."

Ray,

Being a mortgage broker, I am a outside looking in on this post.

I would have to agree with what Broker Bryant stated.  You are comparing apples and oranges.  The appraiser bases his/her values on what has recently sold.  The realtor uses what is active, pending, withdrawn, sold, etc.  The realtor is creating a starting price or bid.  The buyer negotiates with the seller to reach a value that is fair to both.  Once the contract is drawn, it is given to the appraiser to make an official final statement of value.

I do not believe that realtors think of themselve as appraisers.  I do think that it is their job to provide a fair market price as to what a house is worth.  It is their job to do the research to determine this.  If part of their research is to use CMAs, that it is a fair and safe way to determine value.  If they want to consult an appraiser, again this is ok.  No lender will take a realtors word as what a house is worth.  That is the appraisers job.

I have seen some really stupid appraisals in the last year or two.  Last year for example every single VA appraisal I got one either side of the transaction was low several stupid low.  In one case the condo I was selling was the most upgraded unit in the complex.  the VA appraisal came in $30,000 below the contract price yet there were closings for lesser units higher than ours.

The good news, was I successfully challenged ever one of those appraisals.

Would I use the opinion of one of them? Not on your life.

On the conventional side I have seen much better results, but even there I had two where the appraisal was so off that it didn't even resemble reality.

As a professional Realtor helping establish market value is one of my main functions.  In the end it is always the clients call on the final price.

I do consistently recommend an appraisal on custom and unique high end properties.

My final thought:  It may differ in other areas, but you see here several types of appraisals.

1. An appraisal for a loan will come exactly at the price needed to get the loan, no matter how much more the home is worth.  The appraisers never stick their neck out any higher than they need to.
2. If you shop around for appraiser, which most good Realtors and loan officers do, you can always find an appraiser to agree with you.

Ray,

I can't tell you how many times I have had a client tell me what their home appraised for only seconds after I told them it would attract a buyer in today's market at a significantly lower price.  We have to caution our sellers that refi appraisals are often 'optimistic.'  Unfortunately, the number they've heard from the appraiser has influenced their idea of what their home is worth, not to mention they've often borrowed against non-existent equity.

I do think that many agents need more training on determining market value.  I am never ashamed to bring along a few colleagues when I need extra help.  In fact, I think it impresses clients that I am able to bring through some of my market's top producers before the home goes on the market.  For higher priced homes (over $1,000,000) it's pretty much our SOP. 

Ray-

Great Blog !!  I like to let Appraisers be the Appraisers, the Inspectors be the Inspectors and the Loan Officers be the Loan Officers, etc... 

There is a mini appraisal that you can request from an Appraiser.  It's called a Drive-By.  It doesn't cost as much as a full blown appraisal but it can confirm if your CMA is close without paying $450.

Ray-

Great Blog !!  I like to let Appraisers be the Appraisers, the Inspectors be the Inspectors and the Loan Officers be the Loan Officers, etc... 

There is a mini appraisal that you can request from an Appraiser.  It's called a Drive-By.  It doesn't cost as much as a full blown appraisal but it can confirm if your CMA is close without paying $450.