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!
Here are five ways real estate agents can receive better appraisals, right now!
1 - Show up on time:
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.
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:
|I 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:
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.
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.