Real Estate Agent and Appraisers – Why Can’t We Be Friends?
March 7, 2019 |
There’s chatter online these days concerning the “rotten appraiser” who “killed my last deal”. Those agents will make sure appraisers never get assigned another appraisal for their sales. Are agents and appraisers really destined to be adversaries?
Let’s take a look at a typical transaction:
As the listing agent, your first contact with the appraiser may be to gain access to the property. Or as a buyer’s agent, you may have been listed as that contact. Your task is then to coordinate with the seller to set up the appointment, and/or to convey lockbox or other access to the property.
Some agents believe that their job ends there. While they wait for appraisal completion, and the good or bad news regarding the value opinion supporting the sale price. While waiting for FHA, VA, or USDA loans, agents also may wait for the bad news regarding required repairs.
This limited participation in the appraisal process does not benefit the agent’s transaction when the contract price may be the highest sale in the neighborhood, or if the property is larger/better than most. They could be unknowingly delaying their own sale. Rather than feeling powerless, agents have a golden opportunity to participate in the appraisal process rather than become a doorman.
Let’s take a look at the process with more agent involvement:
As the listing or buyer’s agent, you receive a phone call to set up the appointment. You call or email the instructions to the appraiser, and then spring into action!
Consider yourself no longer simply the doorman, but a valuable consultant with the necessary information to share with the appraiser. You can help by preparing a packet to share with the appraiser.
What would be in this packet?
- A list of recent improvements, with dates attached.
- Comparable sales, that sold within one year, that are truly comparable.
When appraisers ignore your data, the sales you’re providing could be over a year old. With current underwriting requirements and loans that require meeting Fannie Mae/Freddie Mac/VA/ FHA guidelines, any sales over one year can only be used as supplemental sales – rather than as the primary 3 or more.
It may also be that the sales you’re providing are distant from the property. Underwriting requirements often will dictate that sales in an “Urban” area must be within a short distance, such as 10 blocks; “Suburban” sales within 1 mile; and “Rural” sales within 10 miles.
Are the sales you’re providing similar in age, square footage, and other major features? Providing sales with homes built in 1990 will not typically be comparable to those built in 1900. Since appraisers will have to make adjustments for home differences, dissimilar homes will result in higher adjustments. With lower adjustments being desirable, more similar homes are better picks for comparison.
So you’ve tried emailing information and comparables, and it’s not been well received? If an appraiser is not receptive to this information, that is their choice. However, it is likely that the appraiser would like to complete any assignment quickly – and your data is making their job easier.
It’s a myth that agents cannot talk to an appraiser! Although it IS illegal to coerce an appraiser with regards to value, there is no restriction in sharing information with them.
If you or your team is not familiar with appraisal requirements, appraisal forms, and underwriting requirements, consider inviting an appraiser to speak at your next team meeting. They can provide more specifics regarding the helpful data you can provide. This can foster relationship-building that will benefit everyone involved in the transaction.
Consider changing your contribution to the appraisal process by working with the appraiser for your transaction, rather than passively waiting for a result. You may be pleasantly surprised! Better communication may well result in a more accurate appraisal in the end. Similar to this topic, see how real estate agents and MLOs can make a great team.