Do Appraisers Have You Running Scared?

Real Estate Agent with Keller Williams Realty

Dog & Tennis Shoe


I heard it again yesterday from a potential seller - Appraisers are just suppressing our home values!  The word has finally reached the more informed public, there are challenges in selling the home and now the blame is being aimed at the appraisers. The thought of appraisers can bring a chill up the spine and a big gulp, will I have a valuation issue?

Finally, the difficulty of the home value challenge has shifted some from the agent onto the hurdle of the appraisal.  It use to be when I delivered the message about the value estimate of the home I would also have to enlighten the owners about what obstacles we face in our industry.  If the home is unique or there was limited data then the problem would be data and the appraiser having a challenge with the report. The word has gotten out and the concerns of this part of the home selling process have taken main focus.

There are ways to combat appraisal problems and take control. Knowing what your challenge may be on the front end will help prepare you for offers and the appraiser.

 Being prepared is the first line of defense.  This is one of the strongest tools that a listing agent can offer to their client - knowing about your home, the amenities and comparables that will be available.  Making a list of the amenities and on each comparable sale knowing what the points of difference are & how your home may offer more. 

Why are we running scared when it comes to the appraisal?  Fear of the selection of an appraiser with attitude, fear that your home value is strained and the appraiser will not value, fear that the appraiser will just look at living area and bathroom count only and not consider all the additional finishes, condition of the home.

To take a bite of the fear we have a responsibility to invest time in preparing the strongest defense of our listing's true worth.  ASSUME NOTHING .. do not assume that the appraiser has noted the extensive floor finishes, updated appliances, lot size, view amenities, etc.  You can prepare information in a non-confrontational manner by having a well prepared packet ready.  Make sure what you have prepared does meet with good comparable selection not just all sales thrown together and handed over.  Know what these sales will say when analyzed.  Write out the points of difference ... this home did not have wood floors in all the lower level like my listing, it was on a smaller site size, it is older and not as updated, etc. 

Know that the issue may not be the appraiser who we would love to pass on the blame.  The report must be prepared to meet varied guidelines, meet the test of underwriting and review, utilize sales within 6 months, etc.  With reporting restrictions, the Realtor has a responsibility to be aware before the listing is taken what situation they may face and plan for the obstacles they will face.  They need to inform the owners so there are no surprises.  They need to be cautious on the contract terms and buyer qualification. BE AWARE!

If you are a true professional then bring on the challenge - you will be ready.  If you happen to get that just awful appraiser with attitude then your next defense - get the buyer to change to a lender that has a better pool of appraisers on their round robin lists. Be ready for Plan B.


Comments (50)

Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

I forgot to tell you how much I love your dog. Great picture.

Oct 24, 2011 03:02 AM
Linda Fidgeon
Berkshire Hathaway Homeservices Page Realty - Wrentham, MA
Make your next move your best move!

This is a great post, and I agree wholheartedly. I am as frustrated as everyone else, because appraisals are really stepping on home values.  But, I had a discussion with an appraiser the other day that made me think. He was complaing that the people who receive the appraisals are just so difficult, it makes it next to impossible to put any "art" into it. The lenders don't care about finishes, condition, etc. If the appraisal don't doesn't have hard comps. it often gets sent back,i.e. rejected. So, often the appraisal problem is not with the appraiser, but higher up the food chain.

Oct 24, 2011 03:31 AM
Brad Baylor
ERA Coup Agency - Milton, PA

I'm not feaful of the appraisal process.  The major issue I have is when you question something that appears in the appraisal.  I have found that many appraisers do not like to have their appraisals questioned, no matter what the question may be.  "Don't you ever, ever question me!  Do you know who you're talking to?  I happen to be Appraiser Buford T. Justice, a respected appraiser with over 30 years seniority!"  (My apologies to Jackie Gleason) 

Oct 24, 2011 03:36 AM
Wendy Cutrufelli
Alain Pinel Realtors - Walnut Creek, CA
Contra Costa Realtor

While I agree that there is an increasing problem with inexperienced and out-of-area appraisers impacting values, I had an interesting discussion with a couple of appraisers after a panel discussion that shed some light on the whole "Realtor providing comps" issues:  "the majority of Realtors don't provide valid comps".  As a result, I now provide a cover letter  with the comps that proves I know their parameters.  "All comparables provided are within the subject neighborhood (or, at the most, within 1 mile), within 4 months (or, if NONE are available within 4 months, within 6 months) and are equivalent in style, s.f., bed/bath count and amenities." 

The second issue the appraisers mentioned is that many Realtors do a really crappy job with their MLS input and that is the basis for the analysis.

Oct 24, 2011 03:46 AM
Glenn Freezman
Nucazza LLP & Home Buying Evolution, & Family Abstract, Inc - Fort Washington, PA

First, My dog has the same shoe fetish! Second, It is not the apprasiers fault, they are now given the grace of not being bullied into certain numbers that made sense for the mortgage to get approved.  Perhaps, this is all the home is worth now. 

Oct 24, 2011 03:49 AM
The Derrick Team - Indy Metro Realtors
Carpenter Realtors - Avon, IN
Your Pet Friendly Realtors

Good discussion. I've been weary of providing information to appraisers for fear of 'guiding' but I've been told it's OK by my broker. Just had one ask for comps on our listing. Guess I'll work on a package in case I have to defend our sale price.

Oct 24, 2011 03:56 AM
Jon Quist
Tucson's BUYERS ONLY Realtor since 1996

It's mostly the appraisals done by AMC appraisers, with seemingly little experience and lazy analysis practices, that are the problem.

I just had two appraisals done by real appraisers, on cash deals. Yes, I still want an appraisal. They both came in right where I thought they would. Quality and skill go a long way.

Oh, yes, one appraisal came in lower than sale price. It came in right exactly on our offer price though. Because it was a cash deal on income property my investor still took it. She knew what she was looking for.

Oct 24, 2011 04:13 AM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Especially in today's market, every agent should provide a value added list and pictures for the appraiser to examine about any improvements since the original purchase and compare properties that have sold for less in the neighborhood or area.

Homeowners should always take pictures before and after any remodel or renovation and keep it filed in case they need it for insurance, refinance or sale of the property. Agents can provide so much more information to homeowners but unfortunately, most do not. 

Oct 24, 2011 04:54 AM
Kate Akerly
Kaminsky Group - Manhattan Beach, CA
Manhattan Beach Residential Sales

We have yet to have a property fail to appraise, but I keep preparing for the worst!  I definitely work off the presumption that they will appreciate any information I can provide to assist them in doing their job.

Oct 24, 2011 05:13 AM
John Hopkins
Nakoni Appraisal - Renton, WA


Great post.  I agree with everything you wrote.  With that said, I can't help laughing.  Helpful agents with information about the house and packages would be wonderful.  Shoot, I am ecstatic, if they agree to let me in without the attitude that I a ruining their life.  Most of the time I am told there is a lock box on the property, just call the seller & tell them you are coming.  The attitude really cranks up when I inform the agent that I will not inspect an occupied home alone.

 In the last 3 years I have had only two agents bring packages to the appraisal inspection.  One was 67 pages, all priced over the subject (some by $100K plus), most over 6 months (quite a few over a year), and as far away as 5 miles in a urban/suburban area.  The other provided four good sales and a listing (all on my clipboard already but good to see).

As far as what to bring you mentioned six months, Wendy’s post (#36) is more accurate with 4 months (and that should be OMD) as lenders are requiring time adjustments on anything older than 90 days or a detailed explanation as why they were not required.

When it comes to finishes, quality or amenities (sunrooms, greenhouses, pools, water features, saunas, gyms, etc) if I cannot find comparable with a similar feature, the lender will not allow value.  (I know it has value, but if I cannot prove it to them, they won’t accept the report).  Also it must fit the market.  Spending $80K on a kitchen remodel in a $150k neighborhood does not make the subject worth $230K.

To Brad (#35), I don’t mind you questioning the appraisal.  I just ask a few of things.  One, have a copy of the report not just the dollar amount given to you by loan officer.  Two, read the report, not just the final number.  Three, if you disagree, have a reason for it.  Four understand the definition of “Market Value” is.  Just because your buyer is willing to pay “X” does not mean “X” is the value.  Value is what the typical buyer will pay.  Your buyer may have emotional reasons for their actions.  If you can support your position, I have no problem changing the value and have done so in the past.

Connie, again thanks for the great post.

John 3

Oct 24, 2011 05:18 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

The micro managing of appraisers is taking all common sense out of the business and not taking into account the possibility of an up market.

Oct 24, 2011 05:35 AM
Debora Nichols
Residential Sales, Purchases, Investors, Vacation Homes - Phoenix, AZ
Realtor Anthem,Phoenix,Scottsdale,Glendale,Peoria

Great conversation.  We seem to be having that problem a lot on our bank owned properties.  Not because of upgrades, but because of low inventory and "Premium pricing"  There is that challenge between your buyer winning the multiple offer bid and it appraising.  We have had 5 of the last 8 that did not appraise and have had to reduce the sales price. 

Oct 24, 2011 10:55 AM
Jayson Holland - Denver, CO
Jay Holland

An appraisal is a "professional opinion of value".  Well I have a professional opinion also, and what makes your professional opinion better than my professional opinion? Oh I guess your appraisal license is better than my real estate license. Got it.

The AMC appraisals are the worst thing that ever happened, good thing we got around that one!



Oct 24, 2011 11:32 AM
Theresa Bonin
RE/MAX Valley Properties - Green Valley, AZ

Our challenge here in Green Valley is that all the appraisers come out of Tucson and as a result really don't know our market. More and more homes are not appraising and it's driving down our prices. Thanks for the tip of preparing an infomational packet for them. I'm going to give it a try.      

Oct 24, 2011 03:22 PM
Peter Michelbach

Connie -- you choose a beautiful pic with the  'ready to run dog' - reminds me, that often my shoe laces were eaten by dogs, when I left them in the foyer during my appraisals (bare feet policy when entering a house)...I usually got the listing...remarking ...even the log likes me.

You're right Connie, with the still soft market, I admit it is tough to get the pricing right, especially when the property was bought during the boom - here in W. Australia in 2007. The higher end of the market in the $1 Mill plus, are sacrificing around 18-25% to get it sold.

Agree with Jon, #39 Quality and skill go a long way. Thank you for an excellent post, and the great comments. Success. Peter 


Oct 24, 2011 10:00 PM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Connie.  Great post and suggestions.  Here is another thought on appraisals

Oct 24, 2011 11:05 PM
Paul Armstrong
Realty Network - Laguna Hills, CA
Serving Orange County & The Long Beach Area

Luckily.. Knock on wood.. I've never had a problem with an appraisal whether representing a buyer or seller.  And I've had a good number of sales over the last few years.  When the appraiser calls to get access to the home, I'm very nice and polite.  I meet them there if I need to.  And 50% of the time, they ask me what the contract price is.  Other times, the lender has already given it to them and they just confirm with me.  The appraisal has always come in at contract price... Knock on wood... Anyone else having good experiences with appraisers ??

Oct 27, 2011 07:15 AM
Patricia Beck
RE/MAX Properties, Inc., ABR, GRI, SRES - Colorado Springs, CO
Colorado Springs Realty

Great post and advice.  I did leave extensive info for an appraiser some time ago but I wasn't sure if that was allowed any longer with all of the changing rules...glad to know it is.

Oct 30, 2011 06:39 PM
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

Appraisals can be a tricky part of the transaction, an issue we have up here is that out-of-area appraisers are coming in and trying to decide value, but don't know the area to compare to.

Mar 06, 2012 09:46 PM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

Great post and great comments! I always like to hear different points of view.

Oct 11, 2012 02:38 AM