There is so much talk about low appraisals, especially as the market has been heating up in the Sacramento area. The dramatic decrease in inventory over the past few months has really changed the market into a seller’s market with many scenarios of multiple offers and offers over asking price too. In light of limited recent sales, this means it’s all the more important for appraisers to get very specific information from real estate agents for their sales and listings. If you are a listing agent, be prepared to be able to answer the following questions when appraisers email or call you.
Questions to be prepared to answer for one of your listings:
– How many offers did you have on the property? Don’t just say “multiple”.
– What price levels were the other offers? Be specific if possible.
– Why was there a change in listing price? (if the price was lowered or raised)
– What attracted the buyer (and others) to the property?
– Why did you accept the particular offer instead of others?
– What have you noticed happening in the neighborhood market?
– What sales did you use to market the property? (opportunity to provide potential comps to the appraiser if he/she is appraising your listing)
– Were there any concessions in the purchase price? (money or anything provided to the buyer to help get the deal done).
Example information when an appraiser calls: “I had four offers on this one. 2 were over asking at $245,000 and the others were at $240,000. I stopped accepting back-up offers. The seller accepted the offer because the buyer seemed committed and able to perform. The seller also liked the buyer as a first-time buyer. The listing price was lowered 15K to get into contract immediately. I had about 50 calls on this property and probably 100 showings, so I know the price was really attractive. The bank was about to foreclose, so we needed an offer immediately. Buyers really liked the cul-de-sac, great room concept and “move-in” condition. The REOs in the neighborhood tend to sell for less since they often need new carpet and paint. Also, the school district boundaries change two streets over, so that was a selling point. Inventory is really low in the neighborhood, so this one really stood out – even as a short sale. All buyers asked for 3% in closing costs back, which is common.”
Does it bug you to talk to appraisers? This list might sound overwhelming or even annoying, but the questions are really aimed at understanding the way the market responded to your particular sale or listing. Most agents get this and do a great job, but sometimes a few agents give off a bothered vibe. Ultimately, keep in mind appraisers are simply trying to do their job, and talking to appraisers is a normative part of the real estate business. Specific information on current listings and pendings in particular helps appraisers gauge the current market – especially since there are sometimes few recent sales to use as comps. This means current listings are an important window into the market. Thankfully it’s easy to unpack answers to these types of questions in just a few sentences. Appraisers of course need to be the ones to ask the right questions, but if agents already generally know what appraisers might ask, that can only help.
We’re in this together. Thank you real estate agents for talking with appraisers. Thank you for returning phone calls and emails. Your insight is often valuable and it’s an essential step for appraisers to do their job (verify data and analyze the market).
I hope this was helpful. Let me know if you have any questions, stories or insight.
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