An Appraisal Before Listing Means Very Little To A Buyer's Agent...or Buyer.

By
Real Estate Agent with RE/MAX Compass, formerly RE/MAX WHP 0524642
https://activerain.com/droplet/rfP

I showed a home for the third time this morning and after getting back to the office I noticed an email from the Listing Agent. In the body of the message was an explanation and almost defensive posture from the agent. Attached in a PDF format was a copy of an appraisal.

I looked at the appraisal and shared it with my buyer. Guess what, we don't care.

An appraisal isn't a ruling from a court or a law passed by Congress. It isn't and shouldn't be considered a line in the sand when NOT ordered by a lender. In other words, an appraisal done out of the blue means very little to a buyer, especially one that's got cash or who is going Conventional with their loan.

Appraisers don't typically pick up the phone and call each other to compare notes before every appraisal. Buyers who borrow money work with a lender who orders an 'independent' appraisal from a management company. It's important that sellers recognize that their pre-ordered appraisal won't mean a hill of beans when it comes to negotiating. Value is a matter of opinion. And there's only two opinions that matter the most, the buyers and the buyers ordered appraisal. If they aren't on board, then the deal is dead, no matter what the seller or sellers agent/appraiser have to say about it. And don't get me started on the .. "But Zillow said!"

Sometimes in rural areas or subdivisions with very limited sales we run into problems where we cannot find ANY homes that have sold in the last year, two or more. In this case it helps to get an appraisal to "defend"  a price, especially if there have been considerable improvements done to the home/property. It's a decent gage and is a way better substitute than shouting from your roof top.. "But I ain't givin my home away!"

An appraiser who works for hire on the behalf of a seller has no underwritten review, no second peek, no fear of being black balled by the management company. In other words, it's possible for an appraiser to appraise a home slightly higher if hired by a seller. This isn't to suggest there's an ethical pattern in question. Not by any means. Appraisers can, and have used the sellers "talk" to  more degree in this scenario. When working for the lender, the Appraiser almost NEVER communicates with a seller and his finger pointing at the new toilets and a/c vents up above.

You could hire 3 appraisers and they'd likely all come up with a different value on any one house. This is really why a buyer shouldn't take any one appraisal (from a seller)  with absolute certainty.

Posted by

 

 
Greg Nino
, Houston area Realtor®.
Helping residential buyers, sellers and tenants 7 days a week.
Available @ 832-298-8555 

RE/MAX Compass (Formerly RE/MAX WHP)

www.GiveMeMyHomesValue.com

www.EverydayHoustonHomes.Com

 

 

The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.  

 

 

 

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Pat Laracy Baker 01/14/2012 05:25 AM
  2. Lenn Harley 01/14/2012 06:07 AM
  3. Ritu Desai 01/15/2012 01:06 AM
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Rainmaker
101,340
Brint Wahlberg
Windermere Real Estate - Missoula, MT
The Wahlberg Team

Great post, love the comment, "Guess what?  We don't care."  That used to be a popular thing to do in the "boom years" a little while back but I hardly see anyone using that tactic anymore.

Jan 14, 2012 05:29 AM #1
Rainer
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go to RealEstateFaster.com & get 20 Listing Appointments per month
Real Estate Faster - Los Angeles, CA

Thanks for sharing and great point "Value is a matter of opinion".

Jan 14, 2012 05:35 AM #2
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

ABSOLUTELY.  Appraisals are not an exart art and different appraisers will come in with different values regularly.  Unless it's a private sale with no financing, a pre-listing appraisal has no value.  If the listing agent needs an appraisal to price a property, they need to get some CE.

Further, many of the "Pre-listing appraisals" we see were performed for refinance purposes and many are out of date.

 

Jan 14, 2012 05:39 AM #3
Rainmaker
491,404
Sonja Patterson
Keller Williams - BV - College Station, TX
Texas Monthly 5-Star Realtor Recipient for the Hou

Hope it goes well for your buyer. Sometimes sellers have to learn the hard way...by having that first offer walk...

Jan 14, 2012 05:41 AM #4
Rainmaker
1,085,952
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

Great point Lenn. You hit the nail on the head (as you usually do) about those appraisals from old refinances!

 

Sonja - we'll be fine. Good to hear from you again.

 

Deven - thanks for the comment.

 

Brint - glad you enjoyed the post! :-)

Jan 14, 2012 05:50 AM #5
Rainmaker
1,048,584
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

Greg, It would be interesting to see what comps a new appraisal chose to use...or if the comps in the seller appraisal are even current enough to still use.

Jan 14, 2012 06:09 AM #6
Rainer
306,531
Linda Metallo DiBenardo
RE/MAX Impact, Lockport, Illinois - Lockport, IL

Sounds like the seller has unrealistic expectations.   

Jan 14, 2012 07:42 AM #7
Ambassador
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Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

My favorite are the re-fi apprasials that are 3-4 years old. Sometimes it's hard not to chuckle.

Jan 14, 2012 10:40 AM #8
Rainmaker
1,143,921
David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

So true bottom line is they really do the exact opposite of their intended goal and thats cause problems and push buyers away.

If someone is interested they will make an offer, period

Jan 14, 2012 01:08 PM #9
Rainmaker
544,156
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

You can get the Cat in the Hat to give you an appraisal and the only thing that'll happen is everything will rhyme!

Jan 14, 2012 04:28 PM #10
Rainmaker
739,292
Ritu Desai
Samson Properties - Ashburn, VA
Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949

Greg, absolutely agree. I think if listing agent and/or sellers are unsure about the pricing they should get appraisal for their own reason. It does not mean anything for a new prospective buyers. Hit suggest!

Jan 15, 2012 01:04 AM #11
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Harry F. D'Elia
Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Appraisal is like you know what-opinion. I am still going to offer the same amount.

Jan 15, 2012 01:33 AM #12
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Rainmaker
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Greg Nino

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