“Just give me a call if value looks like it’s going to be an ‘issue’.” I hear this fairly regularly from real estate agents who ask me to let them know if the appraised value is going to be lower than the contract price. The goal is really twofold: 1) If value doesn’t seem reasonable, the agent can offer additional market support for the appraiser to consider; and 2) The agent can help prepare the seller or amend the strategy for negotiations.
Agent: Are we good on value?
Me: I can’t talk about value with you since you’re not my client.
Agent: Don’t tell me the exact number. Just let me know if I’ll be happy or not.
Who is the appraiser’s client anyway? Unless hired directly by a Realtor for a private appraisal, the appraiser should not be giving a “courtesy call” to discuss confidential information (value) with anyone besides the client. Despite the agents, home owner and borrower being tied to the transaction, the only client is the party who ordered the appraisal. This can be frustrating to digest, but think of it this way. If an attorney hired you to do research for a court case, you shouldn’t talk with anyone about your work besides the attorney, right? Keeping confidentiality seems obvious when talking about a court of law, but the same is true with a loan appraisal. While agents, owners and buyers may end up relying on the appraisal as a tool for negotiation and confidence in the transaction, ultimately the appraisal is really for the lender to assess whether they should risk making a loan or not. Since the lender has initiated business with the appraiser, the lender is the appraiser’s client. This means when appraisers share about value with other parties, even when they are connected somehow to the transaction, it’s a violation of client confidentiality (which can also actually damage negotiations).
Suggestions for talking with appraisers: This doesn’t mean agents and home owners cannot talk to appraisers. It’s just important to realize appraisers cannot divulge confidential information to non-clients. Since appraisers won’t be discussing a specific value with agents, I recommend for Realtors to be proactive about talking with the appraiser before the appraisal is complete, and feel free to share recent potential comps if you’d like – whether at the inspection, on the phone or via email. Also, if you are an agent, it may be worth considering saying something like, “Call me if you have any questions or need something from me to support your value” instead of “call me if there are value issues.”
Question: Realtors, do you find appraisers do share value with you when you ask? Or do appraisers say, “sorry, I can’t talk about the value with you”?
If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook