Appraisals continue to be a potential issue with every contract; we expect this to worsen come the spring ’13 market. What if agents and sellers calmly considered options before problems arose; took a step back to think ahead? What if instead of trying to fight a losing battle after a contract is submitted, appraisers were consulted prior to the event? What if sellers went in with something to legitimately challenge a low appraisal with? Like another appraisal?
Sellers planning to list over the next few months would be very wise to consider the expected turbulence; we see a challenging market due to many factors. It is reasonable to assume that accurate list price will be critical; do you trust yourself or your agent to determine that? Are you a seller that expects to increase list price based on the media reports that “the market has improved and prices are up”? Do trends nationwide related to your micro market? No.
Sellers should hire an independent appraiser in advance of listing. The benefits are many, a few include:
· An impartial review of the SPECIFIC micro market and trends therein
· An impartial opinion of value – find out what the home is worth based upon legitimate comps
· A check against listing agents – you’ll quickly see if that agent has the data an appraiser has
· An impartial evaluation of the home – it will be looked at like an appraiser, not an agent
· A current appraisal can be used while marketing the home
Agents should consider suggesting and even including appraisals in their listing program:
· An appraisal can bring unrealistic sellers back to reality
· Listing price can be based on the appraisal, not only the agent’s opinion
· An appraisal can be given to the buyer’s appraiser, this can help establish credibility of the offer
· In the event of an appraisal issue, the appraiser can be consulted to help resolve the problem
Most appraisals start at $375+- and increase depending on the complexity of the home. It’s a good idea to inquire and ask if the appraiser will be willing to update it as needed or help out in the event of a low appraisal. The key is to be prepared and to trust the professionals. The requirement for experience cannot be overstated; sellers must hold real estate agents to the highest performance standards and verify everything, learn how to select a real estate agent.
Just as agents must be held to high standards, so should appraisers. Select an appraiser that's based in your local market, is active, has all appropriate data and provides references. There are dud appraisers out there just as there are dud agents; it's up to the public to raise the bar. And remember, an appraisal is an opinion of value; while it might be expected that there will be a narrow range there might not be, However, getting that bank appraiser useful and applicable information from another appraiser might be the ticket to a smooth transaction.
The spring market will be an interesting one, wise sellers will do well to stay out of the fray. Remember, when it comes to real estate transactions, boring is good. Hank Miller is both an active real estate broker and active certified appraiser in the state of GA.
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