How To Choose A Real Estate Appraiser - Five Critical Questions You Must Ask
Whenever hiring a real estate appraiser you must contemplate "How should I choose which real estate appraiser to hire?"
Whenever considering a real estate appraiser to hire, keep the following five critical questions in mind.
1. How much experience does the appraiser have with the type of property that you are contemplating having appraised?
While length of experience is not the only criteria, it can be very important. When contemplating the sale or purchase of a home or any type of real property, typically the largest investment for most people, do you really want to potentially put yourself at risk by dealing with an inexperienced appraiser? You should also be concerned about the appraisers specific experience in dealing with the valuation problem at hand. Inquire if the appraiser has experience performing appraisals for consumers as opposed to real estate professionals. Mortgage brokers and loan officers have distinctly different desires and needs than homeowners. An appraiser who understands the concerns of homeowners and prospective purchasers is more likely to help you learn about the appraisal process and answer questions you may have along the way. An appraiser with 10 years experience appraising low priced tract homes for mortgage lenders might not be the best choice for a custom, luxury waterfront home or a commercial/industrial property. There are many specialties IE: partial interests, life estates, sub-division, certiorari, condemnation, historical properties, conservation easements, expert witness testimony for matrimonial or other contested litigation, stigma damage, etc. Be sure the appraiser you are contemplating hiring has sufficient experience with the valuation problem you need to solve.
2. Is the appraiser you are hiring the appraiser that will inspect your property and write the appraisal report?
The appraiser you initial contact may or may not be the appraiser that gets sent out to your property. Many appraisers have trainees and other far less experienced appraisers working for them. Some even employ people who don't even have a trainee (assisstants's) license. It is very important that you inquire about the certification/license level and experience of the appraiser who will be assigned to appraise your property. It will do you little good if the appraiser you hire has 20 years of experience, if they plan to send out an unsupervised trainee or an unlicensed person with say less than 3 or 4 months experience to inspect your property and write up the appraisal. The more experienced appraiser will likely plan to review the appraisal but a 5 to 10 minute review is a far cry from spending half a day researching sales, inspecting the subject property, physically viewing at least the exterior of each of the comparable sales to be considered and writing the report. Ask the real estate appraiser what percentage of their work is performed in the neighborhood in which the property is located. Appraisers who do a lot of their work in a particular area often have a much deeper knowledge of property values in that are aka geographical competence) a. Additionally, they are more likely to know how "neighborhood variables" such as school districts, non-residential areas, etc. affect the property values in the area.
3. What is (are) the intended use(s) (purpose) of the contemplated appraisal?
You should always discuss the contemplated intended use of your appraisal with your appraiser. If you contemplate more than one intended use, make sure you are on the same page with the appraiser. If you are appraising the property pre-listing or pre-purchase, don't assume you will be able to use the appraisal later to obtain mortgage financing. Most lenders are not permitted (by law) to use an appraisal originated/ordered by the seller or purchaser.
4. Who is (are) the intended uses(s) (purpose) of the contemplated appraisal?
If there are to be more than one intender users of the appraisal, be sure to discuss this beforehand with the appraiser. All intended users need to be specifically named in the appraisal.
5. What is the scope of work and terms of the assignment?
It is always best to have a written agreement with the appraiser that spells out the scope of the appraisal (In basic terms, the scope of work is the work an appraiser performs to develop assignment results. USPAP defines "scope of work" as the type and extent of research and analyses in an assignment. The scope explains the extent of the research the appraiser expects to perform, including if there will be a physical inspection of the subject property and comparable sale properties as well as the contemplated extent of data collection efforts and research of standards for the industry, identifies the intended use(s), identifies the intended user(s), establishes the fee/terms of payment and estimate of time-frame for delivery.
Frequently Asked Questions About Appraisals http://www.quickval.com/appraisal/index.asp
Ken Rosssman's Curriculum Vitae: http://www.eappraiser.ws/aboutus.html
Find a Highly Seasoned Appraiser that Services Your Neighborhood here: All Area Appraisal - http://www.quickval.com/
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