Five Ways Real Estate Agents Can Receive Better Appraisals

By
Real Estate Agent with Frankly Realty - Old Town
http://actvra.in/RGt

Five Ways Real Estate Agents Can Receive Better Appraisals

So you've done the hard part--you've won the listing; you slam-dunked the marketing, and you've captured the attention of a buyer!  One of the remaining obstacles in your way is the appraisal.  

You dislike this part because appraisals can be subjective.  It's difficult to tell what the result will be, and hey, it's one more person you need to deal with! 

By the way, if you ever find that you need to order an appraisal, yourself, consider the fine folks over at Appraisals Guaranteed by clicking here!

Here are five ways real estate agents can receive better appraisals, right now!

 

1 - Show up on time:

late

Of course you already do this!  Your time has worth, and guess what?  So does the appraiser's.  Show up late--he's killing your deal!  Maybe not, but this is the easiest one on the list, so just go for it!

Another option is to place a combo lockbox on the door.  You've already taken the smart lockbox away once you got the contract, but return and set up the combo one (assume the appraiser does not have a smart key).  Voila!  He has zero chance of being stuck waiting.

Whatever you do, don't have the selling agent meet him, but that's a topic for another blog...

 

2 - Give the appraiser what he asks for:

Appraisers, by nature, are a suspicious lot.  You entered this business because you like people.  They got into their business because they hate people!  If they liked people, they'd do what you do...

In other words, don't answer the appraiser's questions, and you risk sending him into paranoia mode.  

Just last week I asked an agent to tell me the date that the contract ratified--it was a new-construction townhouse, and the buyer had agreed to the price almost a year ago.  The contract was difficult to read because it was in that Realtor-favorite, seven-point font, and it had been faxed around fifty times.

robocop

Instead of saying "Oh, it was signed on May 7th," the agent threw me one of those stares which reminded me I wasn't sitting at the cool-kids' table.  She said "I've never been asked for that before!"  Then, after an exhaustive sigh, she sifted through the pages she probably never read the first time.

Really?!  Do you think an appraiser wants to work with a person who acts like this?  

Good appraisers ask questions!  Good appraisers are on a quest for the best answer to this question: "How much is this home worth?"  You, the agent, are in an excellent position to help.  You researched the market area already when you had to price it, and you heard feedback from a lot of people, not just the buyer.  Help out!

 

3 - Less is more:

less is moreI am so buying this shirt...

Please don't tell the appraiser what an agent told me recently.  She handed me a folder and said "Here's everything you need!"  

You'll make the appraiser cringe!  I mean, I doubt the agent put black cherry Chobani, new brakes, and Jessica Chastain's phone number in the packet! She obviously failed to give me everything I need!

Remember, nobody enjoys being told how to do his job.  People don't mind, however, discussing their jobs with peers.  You are a peer--you're in the business! The trick is to communicate with the appraiser without lecturing him.

Also, go easy on the "comps" you provide.  Once I had an agent hand me a phonebook of "comps."

The definition of a comp is something that the buyer would consider a substitute for the subject property.  Google "principle of substitution" for more on this.


4 - Pretend like you're smart:

smart dog

If you're already smart, then you can skip this step and proceed to #5...

When you're standing in the kitchen at the end of the tour (because all appraisal inspections seem to end up going over the cabinet upgrades, don't they?), avoid asking the following:

  A - "What do you think the value is?"

See the appraiser's folder? It's probably still a little bit on the thin side, it will grow.  He's at the gathering stages of the assignment.  He's doing the easy part right now--the inspection.  There are many more steps he must take before he knows the value.

Assuming for a moment that the appraiser already has a good idea of the value, he can't tell you!  You're not the client.  Your seller is not the client.  The buyer is not the client.

  B - "Can you tell me if the value is at least the sales price?"

The value is expressed one of three ways: 1) as a single number, 2) a something that falls between a range of numbers, or 3) as anything above a single number.  That is, "it's at least $400,000," is technically an appraisal.  It's $400,000 or higher.  It's an opinion of value.  He can't tell you.

  C - "We've got to hit $600,000!" 

You'd be surprised how many times I've heard this, sometimes with an air of desperation.  Trying to hit numbers is a big no-no in Appraisal Land.  I mean, now the appraiser just plain doesn't like you!

You've "got to hit" something; the appraiser doesn't.  You would be better served by sharing useful and independently-verifiable indications of value.

  D - "The tax assessment is $440,000."

Tell me  this, and I will show up at your next open house, and when your property is selling for $500,000, but the tax assessment is $440,000, I will say, "The tax assessment is...."  

Here's a better reason not to use the tax assessment.  It's wrong.  Your tax assessment is wrong.  Mine is wrong.  They are all wrong.  Sorry.   

 

5 - Some things you can provide:

OK, so you want to help.  Here is a way you can be a hero in the eyes of the appraiser.  Bring the following:

  A - The Plat - It costs you two cents.

  B - The phone number to the condo association - In fact, give him this section already filled out: total number of units, total number of parking, number of owner vs. rentals, any guest parking, number of phases (if really large development) .... but at least have the name and number ...

 C - A list of recent improvements condensed to just a page.

 D - A two or three-sentence description of the market area.

 E - Four contract items: 1) The price, 2) seller concessions, 3) all names (printed), and 4) the ratification date.  Yep, they're on the contract already, but it would help if you listed them anyway.

donut

  F - A short list of strengths and weaknesses of any comps you provide (ones that are verifiable).

  G - It never hurts to have donuts!  Don't try this on me though--my body is a temple! :-) ...

So, there you have it: five ways real estate agents can start receiving better appraisals.  This isn't a guarantee against any "bad news."  These steps won't ensure that you will get your way 100% of the time.  What they will do, however, is tune the appraiser to the fact that you know what you're talking about.  It will demonstrate that you are helpful.  And a happy appraiser (high on glazed frosting) may unconsciously be more optimistic about your property.

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Re-Blogged 1 time:

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  1. Bob Ratliff 03/11/2013 06:06 AM
Topic:
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Location:
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Appraisers
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Rainer
28,320
Rick Perry
Realty World - Select - Stafford, VA
RickP

Of course with a name like "Rick" I would expect nothing less than an insight article.  Loved it!  Thanks!!!

Mar 11, 2013 04:24 AM #3
Rainmaker
259,767
Jim Gilbert
Keller Williams Fairfax Gateway - Manassas, VA
The Gold Homes Team

Nice, easy to read, post, sir.

You did not mention the difference between the market value the appraisor is obliged to produce and the sales price which is what is on the contract.  Most agents don't understand the difference.

When contacting the listing agent for access information it helps to state what kind of appraisal has been ordered. I recently had an appraisor tell me that he head visited my REO property but "the water was off."  Since the sales contract called for a conventional appraisal I explained that there was no need for the property to have the water on for a conventional appraisal. He emailed back that he had been ordered to do an FHA appraisal!  Since the sales contract plainly stated conventional financing and the selling agent had not asked me to ask the bank to switch it to FHA I was plainly rather shocked.  Turned out that the lender, selling agent and buyer just thought they could slide it over from conventional to FHA without bothering to tell Wells Fargo, the bank which owned it!

Of course, if I had been asked for an FHA appraisal access I would have made sure that the property was dewinterized and the hot water heater was operating etc. before wasting the appraisor's time going out there.

Regards.

Mar 11, 2013 04:47 AM #4
Rainmaker
100,908
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

Thanks, everyone. 

Marie - The appraiser is supposed to be unbiased; however, I wouldn't want to take a chance (if I were the listing agent) on having the selling agent attempt to sway him in any way.  I've been "tugged" in this manner before.  The most recent was by a selling agent to didn't meet me but emailed to point out a number of flaws I was sure to see (some of which weren't flaws at all), and there was a comment about the buyer needing money for having to send his kid to an expensive college for the deaf.  It was designed to make me feel sympathetic.  Nine times out of ten; however, there isn't a problem .... it's just that tenth one that I'm worried about...

James & Deanna - It seems to happen a bit more now, that the management companies are in the middle of this, that extra conditions are placed upon the order.  Last week I received a stipulation for an extra side photo (an FHA requirement) for my conventional loan's appraisal.  I had to drive back out to Springfield on a Friday in the rush hour (something not at all fun).  There is also the case of management companies charging more money for FHA appraisals (yet paying the appraisers the same amount).  I think when they finally pass the law that allows for a transparency of fees and make the AMCs disclose what they are getting, then you might see this nonsense stop.  In any case, I feel for you...

Mar 11, 2013 05:00 AM #5
Rainer
39,314
Julie Brown
Steffes Group, Inc. - Mount Pleasant, IA
Broker-Associate, Mt. Pleasant, Iowa

All great points.  I wonder if putting people into a "Sugar Coma" is considered coercing... ;o)

Mar 11, 2013 05:09 AM #6
Rainmaker
433,355
Dan Tabit
Northstone Real Estate Inc. - Sammamish, WA

Hi Rick, It never hurts to hear ways to assist our peers. Appraisers have an important job to do and HVCC didn't help many of them to do it easier.  Thanks for the tips.

Mar 11, 2013 05:13 AM #7
Rainmaker
806,885
Bob Ratliff
Canyon Vista Realty - Bandera, TX
"Sold on Bob"

Rick, very useful information and the pictures are hilarious.. and like you said Appraisers by nature are a suspicious lot.

I especially like #5 very helpful but not sure about G.....lol

Mar 11, 2013 05:20 AM #8
Rainer
22,668
Jon Harrison
Signature Real Estate Group - Las Vegas, NV
Jonslasvegashomes

An issue that we have run into in Vegas is appraisers being brought in from out of town and having no clue what the market is here. 

Mar 11, 2013 05:23 AM #9
Rainer
66,792
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert

Thanks for a great post, Rick!  It definitely helps to be reminded that we can all be a bit more helpful to one another, and I'll be putting these tips to work immediately :)

Mar 11, 2013 05:27 AM #10
Rainmaker
656,418
Joetta Fort
The DiGiorgio Group - Arvada, CO
Independent Broker, Homes Denver to Boulder

I've been asked, "What do you need to get?", and then the appraiser said, "That shouldn't be a problem".  Still, I'd feel uncombortable asking if they didn't bring it up themselves.

Mar 11, 2013 05:56 AM #11
Rainmaker
100,908
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

Jon - That's an issue all over the country--where an appraiser might be hired based on his fee and turn-time and not his expertise.  One way to look at it though is as an opportunity.  That is, if he's not from the area, you can point out some things that he might not have considered.

Mar 11, 2013 05:59 AM #12
Rainer
16,543
JOHN HOPKINS
NAKONI APPRAISAL - Fairwood, WA

Rick, Great post.

 

John 3

Mar 11, 2013 07:04 AM #13
Ambassador
1,998,119
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Rick - I can't imagine not just answering the appaiser's questions.  It doesn't make sense.

Mar 11, 2013 04:00 PM #14
Rainer
30,932
Susan Zwarych
Century 21 Fusion - Saskatoon, SK

Great tips, Rick! Thanks.

Mar 11, 2013 05:42 PM #15
Ambassador
1,173,265
Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

Sorry, but I don't mess with the appraisers.  I let them do their thing, and offer help only if they need it.  I think meeting them and giving the unsolicited advice can do nothing but hurt things.  My two cents.  

Mar 11, 2013 11:17 PM #16
Rainmaker
100,908
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

The Christiansen Team - Appraisers do like it when you put a lockbox on the door (#1) and when you don't ask them 100 questions (#3) .... 

You might consider A-E in #5 though... (or just A & B at a minimum).

Mar 11, 2013 11:48 PM #17
Rainmaker
116,308
Kenneth Rossman
Appraiser, Ken Rossman - Boynton Beach, FL
FL Certified General Real Estate Appraiser #RZ3504

Do answer the appraisers questions.

Do provide the appraiser with a survey and or c of o if it is available.

Do provide the appraiser with relevent comparables, not the highest sales in nearby creation (unless they are applicable)

If there is a low nearby comparable, do tell why it sold so low.

Not all appraisers hate people.

Mar 19, 2013 08:21 AM #18
Rainer
169,403
Richard L. Sanderson
Richard L. Sanderson Consulting - Portland, OR
helping improve local property tax systems

Rick:

Your post is very helpful in that it goes a long way toward educating others in what we do.  I've been appraising real estate (for property tax assessment purposes) for more than 30 years and even my sister asks, What is it that you do?  I firmly believe that one of the jobs that comes with the territory of an appraiser or valuation specialist is helping to educate those who use our opinions of value.  Keep up the excellent work!

Mar 22, 2013 07:08 PM #19
Rainmaker
174,478
Lori Lincoln Team
Top Agent Serving Dighton Taunton, Rehoboth and more! - Taunton, MA
Top Agent Serving Taunton,Dighton Rehoboth and mo

Rick, these are words to actions to live by. Thank you for posting this. Lots of craziness out there lately. I love the humor too!

Apr 11, 2013 11:12 AM #20
Anonymous
Irving

Hi,Would that be a good idea to get a second opinion appraisal for a new purchase home. Should i trust the bank appraisal?

Aug 20, 2016 04:05 AM #21
Rainmaker
100,908
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

I feel like a lot of new-construction properties in Northern Virginia lose value after the first year.  It's like there's something about the excitement of the new project that doesn't transfer into the next year or two, when buyers decide that they really aren't up for paying $4,000 a month, like they originally thought they could swing.

 

I like the idea of a second opinion for new construction; however, I would talk to the appraiser beforehand about how he or she would go about selecting comps for that market area.  Ideally, you'd like to see some support come from a house outside of the new development.

Aug 21, 2016 07:50 PM #22
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