How to work with appraisers before, during & after the inspection

Are you doing all you can to work with appraisers? The appraisal is one of the most important parts of a real estate transaction, yet many agents have a very hands-off approach when it comes to communicating with appraisers. Sure, you don’t want to pressure for a certain value, and it can be hit and miss whether the appraiser will even talk with you. But at the same time there are definitely things real estate agents can do to help communication flow, which in turn can make a huge difference in the appraised value. Enjoy some practical tips below. Anything you’d add?

prepare for appraisal inspection - image purchased and used with permission by sacramento appraisal blog - 530

BEFORE THE INSPECTION:

  • Let your seller know how intentional you are about communicating with appraisers. This will help you look good.
  • Make a great impression on appraisers. In an industry that tends to think of appraisers as a necessary inconvenience, why not stand out from the crowd? What does it look like to represent your industry well? Do that.
  • Choose to have a positive attitude about this next transaction even if your last deal didn’t go well because of the appraisal.
  • Make a written list of all upgrades to give to the appraiser (with costs). Or have your seller make the list for you. Use my information sheet format if it works for you.
  • Choose some competitive sales and listings you used to price the property. Write out any significant differences between the “comps” and the subject property at the top of each MLS sheet. You might know something important about some of these properties that isn’t obvious. Share that type of stuff because it can make a huge difference sometimes in the appraised value. Make sure your “comps” really are competitive though. This means a buyer would theoretically purchase them instead of the subject property.
  • Make arrangements for the appraiser to have access to all rooms and structures at the property.
  • Realize the appraiser may have just received this order and probably has one week to complete it.
  • Please make sure the dog is tied up (have your seller pick up the poop too).
  • Prime the meeting, “I’ll have some information for you”.  Is there anything you need from me?

Image purchased at 123rf dot com and used with permission - 14688774_s - smallerDURING THE INSPECTION:

  • Be the professional and give off a personable vibe. Be awesome.
  • Be emotionally fresh (don’t bring appraisal baggage from the last transaction)
  • Don’t rant about the last appraiser who was an idiot.
  • Say “hello” to the appraiser first before talking on your phone and returning emails.
  • You might want to ask the appraiser if it would be best to chat before the inspection begins or after the inspection. Plan to have a brief conversation.
  • Helpful statements: “Let me know if you have any questions about the property or neighborhood” or “Call me if you need anything.”
  • Share your list of potential comps and say, “Here are some sales I used to price the property.” You’re only saying “have a look at my research” instead of “Here are your comps to use”.
  • Give a written list of all upgrades and repairs made.
  • Share insider information. How many offers, showings and calls did your listing have? What were buyers attracted to about the house? What sort of feedback did you get from agents? This type of information is often useful because it’s market data for the appraiser to consider. Please be honest.
  • Share any neighborhood information you might have. Is there something you know about the street or community that impacts value (or will impact value)?
  • You can walk around with the appraiser, but don’t hover. It’s probably best to give a little space so the appraiser is not distracted. Remember too if you walk into a room first, this means the appraiser will have to wait for you to get out of the way to take a photo.
  • Point out anything you think the appraiser should know about.
  • Avoid subtle pressure statements (I hope it “appraises”, I really need this to “make value”, You shouldn’t have any trouble “meeting value”)
  • Get the appraiser’s business card.

AFTER THE INSPECTION:

  • Hope and pray the value will be okay.  🙂
  • Email the appraiser to say it was nice to meet and that you are available for any further questions (remember, you got the appraiser’s business card).
  • Remember the appraiser probably has a number of days or even one week to finish the appraisal (so don’t call multiple times).
  • When the appraisal report is finished, pour yourself a cup of coffee and enjoy an enthralling read (that’s sacasm). Seriously though, as you open up an appraisal report, forget about minor clerical or spelling errors. Focus on issues that can really sway value. Is the square footage and bed/bath count correct? Does the value make sense for the neighborhood? Are the comps good substitutions for the subject property? Do adjustments make sense? Are the neighborhood boundaries correct? Was the market described correctly? (increasing, declining, stable)
  • If the value is off-base, you can use the lender’s rebuttal system to challenge the appraisal. It won’t do you much good to contact the appraiser directly, so use the lender/loan officer as a vehicle to help communicate with the appraiser. If you end up asking for a reconsideration of value, focus on critiquing comps and give the appraiser at least two other sales to consider. Try to build a case for why the value should be re-examined rather than making an emotional argument void of market support. Don’t suggest a target value either, but let your research speak for itself.

I hope this was helpful.

Questions: Anything you’d add? What have you learned about working with appraisers?

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The pot growing behind the tenant’s closed door

Since I talked about meth houses last week, I figured it would be fitting to follow up with some thoughts about a much more common scenario. Pot. Don’t worry, this won’t become the Sacramento Appraisal & Drugs Blog. Here is a conversation I had a while back that made me chuckle:

Me: May I see the last room now?
Tenant: Sorry, I don’t have a key to that room.
Me: Oh, too bad. So there is no way to get in?
Tenant: My roommate is traveling and won’t be back for a very long time. He has the key, and he doesn’t want me going in there (keep in mind this is a duplex in a sketchy area).
Me: What a bummer. My client will probably want me to come back when the harvest is ready your roommate gets back into town.
Tenant: That could be a while, but okay.
Me: No problem. I’ll let my client know.

It’s not surprising in situations like this to re-inspect the property a weeks or months later only to find that the “roommate” didn’t have a bed, but only paraphernalia for growing plants indoors.

pot growing in house - by sacramento appraisal blog

Does the appraiser have to inspect each room? Ultimately an appraiser is going to need to inspect all rooms in a house if the appraisal is for a loan. In fact, lenders these days want to have a photo of every single room in the appraisal report. This means if you’re growing pot, the appraiser is going to have to take a photo of the room at some point. If the appraisal is for a private reason, the client may give the appraiser permission to not inspect the room and make what is called an extraordinary assumption. This basically gives the appraiser leeway to assume the room is in similar condition with the rest of the house even though the appraiser did not actually see the room.

Here’s my take. As an appraiser I am concerned with the condition of the house. There is obviously a huge difference between a massive grow operation with hundreds or thousands of plants and a home owner with a couple plants (allowable by law). What I’m going to be looking for is anything that might make an impact on value or a health and safety issue – exposed wiring, over loaded plug-ins, poor ventilation, mold, etc…

Question: Would you have a problem buying a house where marijuana was grown? Would the amount grown be a factor for you?

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What information should you be prepared to give the appraiser?

If an appraiser is coming over, it’s usually because something big is happening. Maybe it’s a refinance, purchase, divorce, bankruptcy or estate settlement situation. Whatever the case, it’s important to be prepared to offer detailed information to the appraiser where possible. After all, knowing more about a property and having a deeper perspective on the neighborhood can play a huge role in the appraised value.

A RESOURCE FOR YOU: I’ve included some snapshots below of a downloadable basic information sheet I developed for home owners and real estate agents to give to appraisers. The download consists of the three pages you see below, and you can DOWNLOAD HERE for free as a PDF or WORD document.

Download this format by clicking "DOWNLOAD" above.

Download this format by clicking "DOWNLOAD" above.

Download this format by clicking "DOWNLOAD" above.

I hope this ends up being helpful for you or your clients. I included a WORD document in case you need to edit the form to your liking. As a further resource, check out an article about sharing comps with an appraiser as well as 10 things NOT to do when the appraiser comes over.  🙂

Any questions or stories to share? Contact me or comment below.

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Messy, Nasty and Cleaning before the appraisal

I get this question all the time. Should you clean up before the appraiser comes? In short, it’s okay if things are a bit untidy, but there is a big difference between messy and nasty. Let me explain what I mean.

dirty dishesMessy: This is when some things that are not perfectly tidy. The kids played with Legos last night and their creations are still on the floor. The dishes didn’t get done after dinner. Laundry is piled to the ceiling. It’s been a hard week and your house shows it. Sometimes home owners will say, “I can’t have you come over with a dirty house,” which is understandable, but I commonly say, “The inspection should be fairly brief. It’s okay if everything is not perfectly tidy. Life is full. It’s really no problem at all because I’m paid to look past a normal mess.” In short, if there is evidence of regular living, that type of clutter is no big deal. Appraisers are by nature supposed to be objective, and we can see beyond roller skates on the floor, dirty dishes and a lawn that needed mowing last week.

Nasty: On the other hand, if your house is severely cluttered or thrashed, has terrible odors and things like animal feces on the carpet, that’s another story. That’s what we in the industry call “Nas-tay”. If it’s this bad and bordering on a hoarder property, the appraiser may just have to inspect the property as it is because it’s probably unrealistic to get it cleaned up in a timely manner. I’m not a psychologist, but my heart does go out to people in these situations because there are always deeper reasons for such a mess. However, from a property value perspective, it’s not a good thing. In short, if you have a sincerely unclean situation on your hands and it’s reasonable to cure, take a weekend (or longer) to get things looking and smelling decent again. This will help improve your property value.

I asked some friends on Twitter a few days ago for some examples of “unclean” pictures for this post, and I was given a few gems thanks to Realtor Erin Stumpf Attardi, Appraiser Gabe Trevizo and other friends.

photo from Gabe - Arizona Appraiser

Photo of messy house by Realtor Erin Stumpf Attardi

Dirty kitchen - photo from www.RosevilleandRocklin.com

Closing Thoughts: Appraisers are paid to be objective, yet first impressions are still important. Just as “neat and tidy” is better for prospective buyers, it’s better for appraisers too (though appraisers should be understanding about a normal mess). In short, if you have time to spruce things up and even light some candles (not for romance), go for it. If life is full and you have a minor mess on your hands though, don’t worry about it.

Owner: “My kid’s room is a disaster.”
Me: “I’m glad you’re not inspecting my house.”

Me: “Can you open up the garage for me?”
Owner: “You’re not going to be able to get in. It’s a disaster.”
Me: “Garages are supposed to be messy.”

Owner: “I’m sorry it’s such a mess” (when it’s actually pretty clean)
Me: “Believe me, I’ve seen a mess, and this is NOT a mess.”

I hope this was helpful. If you’re preparing for an appraisal inspection, you may also be interested to read “10 things NOT to do when the appraiser comes over” and “What should you do before the appraiser comes?

Any questions or stories to share? Feel free to comment below.

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Twitter, subscribe to posts by email or “like” my page on Facebook