As a Baton Rouge Home Appraiser for over 20 years, visual online marketer and helping a local Broker market their properties online in Summer of 2011, I know it's not easy to finally get a deal under contract and then closing. Trying to keep up with 68 listings that Summer taught me a whole new respect for role and tasks of a REALTOR®.
And.....then there's NAR's own Videos about how Accuracy Matters, which also implies REALTORS® have an obligation to get it right...as in "Living Area Size". The entire NAR REALTOR® video series talks about ethics and service via their video: Realtor.com Ad "Accuracy Matters" - Mom
There's been HVCC, now Dodd-Frank, now TRID and Third Party this and Third Party that - AMCs (Appraisal Management Companies) to help create buffers in business between REALTORS® so those that service deals don't become too cozy. My interpretation of Dodd-Frank law was that it was meant to right the wrongs of HVCC - to bring about more communication between REALTORS® and Appraisers...without us becoming too cozy in influencing eachs professional task. However, dealing with third party AMCs can sometimes make for a lack of follow through and loss of communication.
Top Takeaways From Baton Rouge Appraiser REALTOR Can We Talk Gathering 2014
Can Appraisers and Agents Talk about a sales transaction that Agent has under contract?
How much can Appraiser and Agents talk about this transaction?
What can an Agent offer to an Appraiser about this transaction?
When can an Agent offer to an Appraiser about this transaction?
In October 2015, these were problems I noted with purchase appraisals.
1. ENSURE APPRAISERS HAVE ALL ADDENDUMS TO PURCHASE AGREEMENTS
Making sure Home Appraisers have ALL counters to purchase agreements, fully executed with all signatures and dates. Don’t assume AMCs have actually delivered Appraisers all addendums. But, how do REALTORS® talk to Appraisers you ask? Read #2 dealing with CSS.
2.) DON'T JUST SEND APPRAISERS TO CSS WITHOUT TALKING TO THEM.
This is the very reason REALTORS® SHOULD NOT just tell Appraisers when they call to call CSS to schedule appraisal visit showings without actually talking to the Appraisers.
Another reason NOT to just tell Appraisers call CSS and not actually speak with them when they call to schedule appraisal visit...to make sure Appraisers have ALL purchase agreement addendums
TIP: Talk to Appraisers when they call. Ask the Appraiser if they have all addendums to PA and Counter Offers, verify sales price and concessions, and if they don't, offer to email it to them.
Twice this month now on purchase appraisals, I was sent PA (purchase agreement) by AMC and then days or 1 week after appraisal was completed and submitted, received addendums to PA for $5,000 and $7,900 more than I was initially made aware. Addendums were signed on same day as initial PA, but NOT SENT to the Appraiser.
After the Appraiser has spent hours on a report and understood the market to have reacted to a particular sales price, it's not easy to go back into a report and "find" $7,900 in more value. Plus, it adds more work to appraisals, perhaps adding more comps and may mean Appraiser has to drive another trip out to that market to take additional comp photos (because Lenders want comp pics taken by Appraiser and using MLS pics not an option).
From my 2013 post on this topic:
Centralized Showing Thwarting Communication Between Agents Appraisers?
3.) DON'T COPY OLD MLS LISTING SHEET FOR LIVING AREA SIZE
Three (3) purchase deals this month DID NOT appraise because Agents copied previous MLS listings in MLS history and failed to actually measure the home they were professionally representing for a large commission. And/or the REALTOR® didn’t understand the basics of A.N.S.I. on how to measure a home.
In Baton Rouge, the average home sells for $210,000 +/- and if the local commission base is 6%, sellers are paying approximately $12,600 for professional REALTOR® representation no matter how that commission is split. For $12,600, sellers deserve to have their homes professionally measured! I mean, can you imagine going to a CPA and having them just guess at your income? Would that be a professional service? It's not OK to simply guess at living area size when a seller is paying $12,600 for a professioanl service.
Errors in Listed Living Area sizes were 211sf, 98sf and 68sf, listed at $136/sf, $120/sf and $112/sf.
145sf MORE Living Area. And, 1 listing in Denham Springs for 1725sf, where Listing Agent copied old MLS listings, was 1871sf, 146 sq. ft. MORE living area than professionally represented. Listed at $100/sf. How do you think this seller would feel if they actually knew this happened?
Attached Storage Areas without direct access from interior, not matching in quality of construction and without equal heating and cooling are not "Living Area".
TIP: Accurate Living Area sizes in your listings will at least provide a better chance of your deals closing closer to contract price than not.
TIME OUT HERE: Please understand that I'm writing this from Baton Rouge Louisiana and thankfully, the Greater Baton Rouge Association of REALTORS® does require Agent Indoctrination plus 4 hours of "How To Measure A Home Per ANSI Standards" before our Agents can gain access to GBRMLS. My MLS Board understands why getting living area correct up front is so crucial to deals. And, in 2015, the 4 hour mandatory LREC CE topic was "How To Measure A Home", mandatory for Agents and Brokers.
Photo source above is Louisiana Chapter of Appraisal Institute.
4.) KNOW WHAT "LIVING AREA" IS AND IS NOT
Sunrooms are not generally "Living Area" and you shouldn't add them to Living Area in your MLS Listings unless you're 100% certain.
It's very rare a sunroom matches the quality of the original home and it's a huge mistake to call what is not living area, "Living Area".
See this photo where in this sunroom, walls and ceiling are white vinyl siding. Is it common to have vinyl siding walls and ceiling in a Living Room, Kitchen, or Bedroom in a home? Absolutely Not! It doesn't matter if there's a central heat/air vent inside sunroom, the overall quality is far, far below that of good normal quality construction. A Sunroom has sunroom value but not living area value.
This Listing Agent misrepresented living area to the public by over 200sf with a listing price in the $130/sf (on realtor.com). Don't be that REALTOR!
Other Sunroom Resources By Appraisers:
Sunroom Values in Baton Rouge - Links Resources From Appraisers by Bill Cobb
Can a sunroom be included in the gross living area of a home? by Tom Horn, SRA
Four areas the appraiser will not include in your homes square footage by Tom Horn, SRA
Bill Is Greater Baton Rouge's Home Appraiser with 21 Yrs Experience. Bill is also publisher of Baton Rouge Housing News BatonRougeHousingReports.Com. Ask Bill Your Questions: http://bit.ly/GSvAXd