I thought the basic appraisal course was the most interesting class and learned so much. I agree that real estate agents should take the class to learn more. I would also like to see loan officers and brokers take that class

Thank you for your Information

But you need to mention to adjust the appraisal if the area is REO driven

LIbby; I highly agree, I am a huge advocate that ALL loan officers should be licensed and have to take courses in basic appraisals and beyond...you should hear some of the calls we get in our office from soem LO's that want to know what it's worth before we go out and look at the house. All LO's should know how to do their own "comp checks" as well, there is plenty of info out on the web....but i'm not even going to get into that here. We'll just leave it at agents and LO's would benefit greatly from a basic appraisal knowledge (I have my RE sales license as well, and I always talk to LO's to learn more about their end, it just makes me better at what I do when I know more about the entire process as a whole).

Manfred; You are correct. (let me just say that I had this entire blog almost completed with way more details when it got erased by accident, so when i rewrote it I was in a rush and left out some major details). I will write some more breaking down some other important details regarding the appraisal process, this was geared towrds just choosing comps.....as to your point Manfred, before we even get to the comps page in our report, one of the first things we must comment on is the neighborhood and market analysis. This is where we must analyse and explain what the subject's market is looking like; including neighborhhod built-up %, growth rate, marketing times, supply/demand, pricing trends (rising, stable, declining) and anything else which may affect marketability of the subject; a large supply of REO properties will definitely play a huge role in your marketability and neighborhood analysis.

Unfortunately, many appraisers have this pre-filled out and don't really analyse and accurately mark these as they truly are....but it's not all our fault. Many fear the loss of clients if they were to mark declining prices, so they mark stable, as well as an oversupply of properties which we tend to overlook. if we mark declining prices the loan won't go through, or additional down payments must be put, so the LO gets angry; they will find another appraiser who will mark stable. This is another long story; maybe for another day....

Very interesting information.  You have convinced me that taking an appraisers course is a great idea to insure the understanding of their job. Do you think it is a good idea to have an appraisal done prior to listing if you are in a neighborhood where the only homes that have sold in the last 6 to 12 months have been forclosures or hud homes!  How long is an appraisal good for? Say the house appraises for $175,000 and the offer is negotiated to $170,000.  Yes the Seller is giving away 5,000 will the lender use the previous appraisal on file or order another appraisal that may just match the contract price?

Kelly: Getting an appraisal prior to your listing can be a good idea. It depends on your situation, the property you have and the market. Sometimes it can be very helpful, sometimes it will be just as worthless as a bad CMA....get to know a local good appraiser, someone who takes his profeesion seriously. Ask people in your office who have been around a while, who a local reputable appraiser is. If you have a good local appraiser, they can be very helpful to you, and clients as a referral!

An appraisal is good for 90 Days....however, a good thing to know is an appraisal has an intended user and an intended use. We cannot, per USPAP (our professional standards) simply change the name on the report and give it to someone else. The client can release the report to somneone else, but the client and named user and use cannot change. Therefore, let's say I do a pre-listing appraisal as of 01/01/2008 and the agent is the intended user and the use is to assist in setting a listing price. the property goes under contract 02/01/2008; the appraiser is contacted to do the appraisal for the sale; the appraiser must appraise the property as of that new date, and any new information available (ie comps) must be used if applicable. Basically it is a new assignment for a new client with a new intended use. Another thing you must know is that the agent or borrower or even seller should not be choosing the appraiser, an appraiser's role is to be cokmpletely independant from everyone. An independant, unbiased valuation is what the lender "wants".

So the lender should order a new appraisal through an independant appraiser, if it happens to be the same appraiser, they could certainly negotiate the price for the amount of work that has been already done (this happens often when a borrower changes their lender for a refi).

As for appraisals matching the sales price, well we're giving our opinion on the most probable sales price; if their is a contracted sales price, and your comps support that price, there is no real reason to appraise it $5,000 above sales price.....If you have no comps than maybe they are overpaying.

Hope that helps, do take an appraisal course, it WILL help you as a professional.

-Shane

I am getting ready to take the apprasial course next month.  I think its really important for agents to be more informed.  I'm new to the industry but I've talked to several agents am sometime I'm surprised of what they don't know.  Taking this course I think will give me just one more piece of information that will be useful in working with my client(s).

Great to hear, I guarantee it will further you as a professional!

Appraisal 1 was one of the best real estate related classes I ever took.  You are correct, all agents should take it.