I know what some of you are thinking. Appraisers have been screwing up real estate deals, and now some appraiser has the nerve to tell Realtors how they need to talk to appraisers? No, that’s not where I’m coming from at all. My goal isn’t to talk at anyone, point my finger or wave a victim flag, but instead improve communication in the real estate industry. I’m passionate about that, especially since I regularly rely on my Realtor relationships to do my job.
Today I want to share 10 subtle (or not so subtle) statements that in a small way can come across as trying to influence an appraiser’s value. These statements are very normative in the real estate industry, aren’t they?
10 questions and phrases to pressure appraisers to “hit the number”
- I’ll be happy as long as it appraises for at least the sales price.
- Do your best to get the value as high as possible.
- The market has been “on fire”. You shouldn’t have any trouble with the appraisal.
- Is it going to come in at “value”?
- I never say this, but if you can just work some magic this time, you’ll be my hero.
- If this doesn’t “appraise”, the seller is going to go into foreclosure.
- I would be shocked if it didn’t “appraise”.
- I really hope this works out. No pressure or anything though.
- The son has cancer. It’s been really hard on the family. The last piece to wrapping up this transaction is the appraisal.
- I don’t want to ask you to do anything unethical, but just do your best.
Agents Laugh: Whenever I share these statements during classes I teach at real estate offices, agents always chuckle. Why? Because we all know how common they are. Of course I don’t think most Realtors are trying to overtly steer an appraiser to a certain number. After all, coercion is kind of a big ethical deal. It’s rather a matter of simply using lingo that is a regular part of real estate culture – but maybe shouldn’t be. When we begin to really think more deeply about subtle statements like these, what is the real goal of using them? And are statements like this ethical in the eyes of the DRE?
The Pressure Test: How would you know if you are trying to influence an appraiser’s value? It really comes down to motives. If you find yourself saying one of the statements above while talking with an appraiser, ask yourself: “Why am I saying this? What is my goal here?” If the appraiser asked, “Why did you tell me that?”, what would your response be?
My advice? It’s probably best to use language that cannot be interpreted as pressuring for a certain value – whether high or low. If you find yourself using subtle statements like this, ask yourself what you are really trying to get across to the appraiser. How could you do that without pressure statements? Honestly, it likely feels tricky sometimes to be able to communicate with appraisers these days in light of HVCC and Frank-Dodd, but with some focus and strategy, there are definitely ways to chat and convey good information to appraisers – without trying to steer a certain value. If you’re looking to communicate more effectively with appraisers, check out Quick tips for agents for talking to appraisers and Agents, be ready to answer these questions when appraisers call.
Lowball Reality: Lastly, I know lowball appraisals are plaguing the market. It’s a real problem, and I’m not dismissing that reality for anyone who has lost a deal because of legitimate appraisal issues. I know a post like this can be frustrating to some who really don’t want to communicate at all with appraisers because of so many bad situations in the past. However, no matter what the past or future, the best thing we can do is communicate well and work with the system we have.
I hope this was helpful. Anything you’d like to add?
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Isn’t it sad that it has come to this?
I let my license lapse in 2009, after 25 years of appraising, so just to be clear, I’m no longer on the scene – but I still can’t quite let go.
Throughout my career, phrases very similar to the ones you quote were encountered on a regular basis. I believe they will continue to be part of the industry, and I don’t consider them to be unduly exerting pressure on anyone. IMO, it is up to the appraiser to shrug these phrases off. Some are friendly banter, some are illustrative of circumstances, all are likely to just be part of “fleshing out” the conversation. The only “threat” is that the parties involved will be “unhappy”. No real threats are involved.
Would you really report an agent for any of those (or similar) questions/statements? Surely there are better ways to spend energy! Not promoting the use of those phrases, I just think there are bigger fish to fry: overt pressure that includes threats of direct consequences to the appraiser if certain conditions are not met. I realize that appraisers are (still!) being picked on, but do we (well, I guess I no longer count…) gain anything by picking back?
Seeing my beloved industry getting pushed around and made the scapegoat for bigger crimes is heartbreaking. Bogging the appraiser down in minutiae does not solve anything, IMO. Common sense has left the scene, and thanks to the rotten apples, we have all been reduced to the lowest common denominator.
You, Ryan, are a shining example of an appraiser who understands their role. You educate instead of attacking, and you know what’s important to stay ethical! I commend you for the great work you’re doing, and I immensely enjoy your blog.
Thanks for your comment and insight, Cecilia. I really appreciate your kind words too.
I think context and motive means everything. I do think some of these statements could mean several things depending on where and how they are used in a conversation. I’m glad you brought that point up. While it is not the end of the world or some sort of atrocity to say one of these “top 10” statements, I still do think it’s important to pay attention to motives – even with the small things. Like I said, in the real estate offices I visit, agents always get a chuckle, because I think this conversation brings up an important point to sift through.
I agree there are bigger fish to fry. It’s a good thing I’m not cooking anything here other than attempting to foster better conversation in the real estate community. 🙂
For me one of the bigger issues here is an exchange of useable information as opposed to clichés or blanket statements that do not provide any value. For instance, the statements above don’t supply the appraiser with any data or tools to enhance doing his/her job. I’m a big fan of talking numbers or market trends instead. Let’s cut to the chase and leave out some of the common real estate vernacular that really doesn’t propel the conversation forward.
I just read your comments and agree nearly 100%.
After almost 47 years I am pretty much done with all the bs I see. Everyone is calling the shots except the appraiser. Most lenders just want to get the report past the uw. Why else would you give the contract to the appraiser? I know what uspap says. But years ago we had some lenders who would not tell us the sale price – they wanted a truly unbiased opinion. Giving the contract to the appraiser creates bias. You can’t unsee the sale price and it places pressure on the appraiser whether they acknowledge it or not. When you have the sale price you better have a very strong position if your number comes in low.
Thanks Robert. I hear what you’re saying. On one hand we can say the contract prices is a data point, but we have to wonder about an anchoring bias too.
Had an appraiser’s license twice. Threw it in the trash twice shortly after getting it. Found that realtors and brokers had total control over appraisers and you give ’em the number they want and leave the bad stuff out or your license is worthless. And the state regulatory boards know it and condone it completely.
As far as realtors pressuring appraisers, I laughed the first time I went appraise a sale and the seller’s realtor brought me the comps to use for the appraisal, as a “Courtesy”. I told her where she could put those comps, and, of course, I never got any orders from that realtor again.
Realtors and brokers and their pet appraisers are well-known to mutually dependent, and the buyer is never the winner.
Thanks for the comment, Stephen. I’m surprised to hear you had it twice and threw it away quickly. Your words highlight one of the big reasons why HVCC and Frank Dodd came to birth. Now the tide has shifted and it’s upsetting to many to see so many appraisals coming in lower than they used to. Now Realtors, loan officers and brokers cannot choose their appraiser any longer, which is overall probably a good thing.
Nice article Ryan. I honestly feel sorry for most appraisers out there. I know there has been a lot of pressure to hit certain numbers (OR ELSE), especially in recent years. This blog is a good reality check – helps us investors and lenders understand the appraiser’s perspective.
Seth, thanks for the comment. I appreciate your empathy too (it’s a bit rare for appraisers). I hope an article like this will simply stimulate conversation about how to communicate better as real estate professionals. There is definitely room for that, and I’d like to be a part of those conversations. Take care.
Reptiles. Realtors. Same thing, functionally.
There are a few exceptions. I know some, personally.
They are the minority, sadly.
Hi Brian. There are bad apples in every profession. In fact, I cannot think of a job where there aren’t. Anyway, I guess I’m lucky enough to know many great agents.