10 Rules of Engagement with Appraisers that can impact Values

Mary Thompson great discussion - and love the difference of opinion.

I may differ in my own way - admitting the fact that we should work with appraisers to show the value in the house - based on the incidence.

An appraiser valued a home at $60K below what the buyer was paying! We had to take it to the next level and surprise surprise - the new appraisal was about 10K above the offer price - after I showed the comps and requested the review of the appraisal.

And one more - the appraiser refused to even talk to me saying, he knows what his job is! (And yes, I do agree with that statement.)

you know, when i joined activerain many years ago, i was a new agent and i learned so many things here which helped me in my business. this post is added to those things. a lot of things on your list, ive never thought of. thanks a lot...this post is being bookmarked by me. 

Mary, These are good tips for realtors to communicate to an appraiser. It's always good to help the appriaser by furnishing appropriate info about the property and how the homes was priced.

In ANY  business, whether it be lending, like me, or appraising, like you; information is ALWAYS  valuable !   It doesn't matter whether it is GOOD information or BAD information; it is all part of how we form an opinion as to value.

I recently had buyer clients that wanted to offer on a home that was substantially overpriced.  I spent several hours working on the comps trying to find the rationale the listing agent/seller had for pricing this home and there simply was no evidence to support the price.

To make matters worse, it was an investor flip and of course he wanted make money.  But the reality was that there was no way out for him at the price he expected, and in fact, he would most likely need to bring money to the table.

They rejected my buyer client's offer since the seller believed he could get at least close to the asking price.  It won't happen.

Agents do a real disservice to sellers by overpricing a home, or allowing a seller to demand that it be overpriced and then taking the listing.  In the case I'm describing here, going back as far as two years there was no listing that sold above a certain amount.  Item 6 in your post applies here, along with a few others.  

The only clear pattern that emerged for me while searching for comps, is that the listing agent had comped the home to new construction homes in an adjacent community without adjusting for age and other amenities.  Even the newer homes were't selling as high as this listing once they became resale.

Bad news for all involved on this one.  My clients liked the home but there was no way to get the seller to see how his best alternative was to absorb the losses now rather than wait and lose even more when the home doesn't sell.

I do exactly that (except # 8) and have for years, including during the "down market". Works like a charm.

Those are some great tips.  It is always akward working with appraisers.  Some like what we can tell them and others want nothing to do with us.

This is so deserving of all the attention you recieved! I have book marked it to use in my own business - thanks for the great ideas

All great points that very few agents actually know ! I'm BOOKMARKing this post to share in Agent Training !!!

Thanks for the great tips and information, very informative

Stop, call (770) 967-0753 and speak to Mary Thompson about Real Estate appraisals in Flowery Branch, GA.

Fantastic post with great information!

Scott Kimball- Home Inspection All Star Atlanta

Hi Mary Thompson I think your post is great.  Appraisers and agents should work together and everything you have suggested appears to me to be ethical and helpful.

Houses don't appraise all of the time in our market.  It's a market full of raging appreciation.  If I can't justify the comps, I'm going to be in an appraisal fight.  I'd rather take conventional with the ability to make up some of the difference than FHA and be saddled with that appraisal for six months.  That being said, if the buyer's agent can tell the story, I'll bite.

Thanks for a great post Mary! I'm so glad to know someone really does read those descriptions with the photos! The Public and Confidential Remarks fields on our MLS are pretty restrictive but we can go on all day with photo remarks (and I do!). Most appraisers would concur with your recommendations, but unhappily there are those who not only work in areas they don't know well but refuse to accept a package from the Realtor. Since the inception of the AMCs we have had too many instances of appraisers being assigned to our area who have no idea how to establish value here; and they are almost always the ones who refuse to accept an appraisal package. Oh, the stories we could tell!!:):) 

But generally, the appraisers are dedicated professionals who know their jobs and appreciate agents who show them respect, courtesy and an equal level of professionalism. 

Great re-post. I am bookmarking this one. I normally don't do this but will from now on.

Great advice, Selling the property does not end when the purchase offer is signed!