How to avoid Deal-Killing out of area appraisers

By
Real Estate Broker/Owner with Grady David Tipton Brokerage Florida # BK451206

Tampa Bay Area RealtorsDo not allow an inexperienced appraiser to kill your deal because that individual is not from your area. What is the reason appraisers most often kill deals? Industry professionals overwhelmingly named appraisals as the biggest obstacle they face in getting deals to the closing table.

Legislative changes under the Home Valuation Code of Conduct have created a flood of out-of-town appraisers who, many complain, routinely undervalue properties. That, in turn, threatens buyers' mortgages, and makes them think they're overpaying where they could potentially walk away. 

Why is this happening? Mainly, the out of town appraiser does not have access to MLS data to accurately find information needed to find the true value. They have to rely on public records, which doesn’t tell the whole story- not even close. Additionally, it could be a lack of due diligence on the appraisers’ part. Then the sellers have to pay out of pocket to get another appraisal from a local appraiser or “area expert.” This second appraisal may then be used as a negotiation tool for the lender to compare to the previous appraisal.

The difference in experienced and non-experienced appraisers has to do with market familiarity and market conditions analysis. The out-of-the-area appraisers often do not compare apples to apples. This simply means comparing a distressed sale (short or bank-owned) with a NON-distressed sale (arms length or conventional). It sounds very simple, but it does occur.

I have heard appraisers at continuing education classes debate this point. That it is to say it is perfectly acceptable to use what is available no matter what type of transaction. This simply creates more chaos in the transaction and may be occurring out of laziness. This is why I have started entering the “transaction type” for all my comparables as well as noting the subject’s.

How do we as agents stop this from occurring? The agents have the most power in this situation. They should avoid persuading at all costs and simply give the appraiser all the information possible so the appraiser can make an informed opinion of value. Agents are legally the only ones allowed to speak with the appraiser anymore under the HVCC (Home Valuation Code of Conduct.) Anyone otherwise could be seen as having the capacity to coerce the appraiser one way or the other.

Therefore, agents and brokers have now started providing appraisers with reams of information to prevent unexpectedly low appraisals. As an appraiser, one should not EVER turn away more information because in this business the adage applies, “Data wins.” All the data or observations must be considered. As they say on the hit TV show CSI, “Trust, but verify.”

As an agent, one should avoid assuming the appraiser knows the market. Assume they know nothing if you must assume. Appraisers must verify the information provided by brokers, he noted. The agent’s responsibility is to make that process easier by providing sources as well as phone numbers for agents involved in comparable sales.

Jon Tipton, Realtor/Certified Appraiser

813-391-6121  Direct

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Location:
Florida Hillsborough County Tampa
Tags:
brandon fl real estate agents
tampa fl real estate brokers
tampa fl real estate appraisal company

Post a Comment
Spam prevention
Spam prevention
Post a Comment
Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
301,213

David Tipton, GRI, ePro, SRES

Real Estate Broker - Tampa
Do You Have a Question, Get my Free Report: Click Here
*
*
*
*
Spam prevention

Additional Information