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Realtors have more control over how the Appraisal goes than they may think. If you follow these Top 10 "Rules of Engagement" with Appraisers you will be doing your Sellers a huge favor. Time upfront can reduce the time you may spend on the back end trying to deal with an appraisal that comes in under the sales contract. Remember you are trying to get the HIGHEST possible price for your listing so this takes some work. Your sellers will love you for it!
* Pretend you are selling this home to the Appraiser AND pretend it is YOUR home. Some of the best Listings I have seen are Owner/Agent Listings.
1. PHOTOS....Good Quality and many of them please! Include the views from the rear of the home especially when dealing with Lake, Golf Course or Acreage homes, etc. The photos do not have to be professionally taken, but they need to be of high quality so when you click on them you can see all the details. I see way too many small resolution photos that do not open up to larger, clear ones when you click on them.
** Use all the space you can under EACH photo as descriptors. Appraisers read these every day. The more you add the better, ie; Comments under the Kitchen photo could read: " Renovated kitchen in 2012, new granite counters, new GE Profile Stainless Appliances, New Tumble stone backsplash, New upgraded lighting. Owner put over $30,000 into new kitchen upgrades" The more details the better as they will provide valid support for a higher value in the appraisal. Cost of all upgrades is not required but DOES help!
2. Provide packet of information in the home with "Appraiser Information" written on the outside of the envelope. Many times Appraisers will not call ahead, so have this packet readily available in the home. If they do call, tell them the packet is there which includes information on how you determined an appropriate Listing Price and if a pre-listing appraisal was done, tell them you have included a copy in the packet.
** Make sure to add comments on each FMLS/MLS sheet stating how they DIFFER from the Subject. Very helpful especially if you have been inside those other homes since Appraisers do not see the inside of the Comparable sales, only the Subject.
3. DO provide appraiser with insider information you may have about the home or the neighborhood that they may not have: Include a cover letter to the Appraiser which would include things like why the current owner purchased this home and why the current BUYER is purchasing this home. What are the perceived value added amenities of this home for a buyer. If you know of positive things that are happening in the area or neighborhood, include these. This can be very helpful and so worth your time to provide to the Appraiser.
4. Do include a BRAG Sheet with costs of renovations, additions, updates and the year/s completed. This is Very important for getting the most out of an Appraisal.
5. Call Appraisers Back right away! You do NOT want them guessing on something important and you do not want the Appraisal delayed waiting for your call back. Appraisers typically call the day or day before the report is due as that is when they are working on it, so please call them back as soon as possible, whether it is your listing or not. Remember one day they will be calling a Fellow Realtor on one that impacts your deal.
6. Do NOT price your listings over anything else that has sold in that neighborhood unless you can provide details and reasons why! Lenders have real issues with appraised values over anything else that has sold in that neighborhood, so be prepared to support your actions on your listing price along with other sales that will prove this home is worth being priced over all the others.
7. When you select Comparable Properties make sure you Bracket your Comps...Provide sales and listings that have sold BELOW and ABOVE your sale. This is how Appraisers must chose comps, so please follow the same process and again note on each listing sheet why they are inferior or superior to your Listing.
** Remember one CRUCIAL thing when it comes to Comp Selection: Choose only those sales that a Buyerwould consider as a good replacement for the subject at the same or similar price if the Subject was no longer available. Don't rely solely on SALES PRICE or Price per Square foot for your Comp selection. Appraisers do not do this so you should not do this. Do not go into a superior development with superior homes to justify your listing price or it could backfire on you....Adjustments for location, square footage, quality and condition will be made and this sale could actually reduce the value for your Subject property. **Update per Bill Cobb's comment: Do not forget SELLER Paid Closing Costs/Concessions. If a seller pays well more than the typical closing costs, you MUST adjust downward against that sale as Appraisers will do this. This is Required by Fannie Mae to adjust that sale in the amount that it has effectively increased the Cost of that Home over what the typical market price should have been.
8. Consider using 2nd Gen Square Footage Datasource which comes from actual Appraiser measurements of the homes. This data will help you to accurately determine how much larger or smaller the homes are...the same way an Appraiser would. GLA (that area above ground or grade is what appraisers count) Basement level finished space is considered separately and shown on this website along with other physical data about each home which has been measured.
Cost is very reasonable at .10 cents per address and can be printed off for your files.
9. Do not say things to Appraisers like: "You should have no problem appraising this home at the Sales price"... or... "We need a GOOD appraisal on this one". Remember one thing...Appraiser's objective is to protect the bank and not to make the deal work.
All you will do it place doubt in the Appraiser's mind if you make comments like this and trust me I have heard them many times! Just give them the packet of information already discussed and this will go a LONG way to getting the best possible value that the market will support for your Listing. 10. Do tell Appraisers if you had multiple offers and the details of those as this will provide them with good information about the value and demand for this property.
** IF IN DOUBT AS TO THE PROPER LISTING PRICE FOR A PROPERTY, GIVE US A CALL FOR A PRE-LISTINGAPPRAISAL in North Georgia. THERE ARE SO MANY GOOD REASONS TO HAVE THIS DONE AND SETTING THE RIGHT PRICE SO THE HOME WILL SELL IN A REASONABLE AMOUNT OF TIME IS THE BEST REASON OF ALL!
Thanks for reading my newsletter. If you know of anyone who would be interested in having this sent to them on a monthly basis there is a link below to forward this to them.
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