I recently appraised a custom home, and when the order came through the property looked overpriced. I thought, “Yep, I’m going to look like the bad guy when this one appraises too ‘low'”. However, after doing all my research AND asking all the right questions to the listing agent, this property was clearly worth slightly more than the contract price. Ultimately I left the transaction feeling a bit curious why the agent did not offer more information about the property until I asked. At the end of the day her insight was actually vital since I found out there was a back-up cash offer above asking, one other full-priced conventional offer, and another listing coming on the market priced at a similar level – not to mention the feedback on the layout, landscaping, and location. The agent spent so much time, effort, and money to market this listing, but when it came to communicating with the appraiser, her approach was hands-off.
A “cheat sheet” to communicate with appraisers: What if you had a document on your desktop to simply address some of the questions appraisers tend to ask? You could quickly fill it out, and then email it or give it to the appraiser in person. Check out the document below, and you can download in WORD or a PDF.
This document addresses how the market responded to the subject property, and it also gives an opportunity for the listing agent to share any insight about the neighborhood, school district boundaries, market trends, important reasons buyers might be looking in the neighborhood (that the appraiser may or may not know), or insider knowledge about the subject property or street. Remember, this is potential market data, so it can be important for the appraised value. Also, you can look like even more of a rock star to your client when your client sees how intentional you are with the appraiser.
Some quick tips:
- Save this document to your desktop and use it for each listing.
- Tell the truth in everything you write.
- Feel free to skip, delete, or add any categories.
- Take 10 to 15 minutes to answer questions.
- You don’t need to write a novel, but it’s okay if the document ends up being more than one page (try to keep it less than two though).
- Remember, this information is about sharing facts instead of pressure to “hit the number”. This is exactly why it’s okay to share this type of information.
- Try to avoid subtle pressure statements like, “Please get value as high as possible”, or “We really need this one to work out”, because that comes across as trying to steer the value.
- Be specific about upgrades. For instance, instead of saying, “The house was remodeled throughout,” unpack what that means and when any remodeling was done (if you know).
- If you don’t feel comfortable providing sales or listings to the appraiser, that’s okay. However, if you do provide sales, make sure they are actually competitive to the subject property. If you know the sales well, you can always write out any differences at the top of the MLS sheets. I recommend saying “here is data I used to price the property” instead of “here are your comps”. If the appraiser doesn’t want to take any sales from you, maybe the appraiser would still take this information sheet.
DOWNLOAD the WORD DOCUMENT or DOWNLOAD a PDF.
Here is a video where I walk through some tips for communicating with appraisers before, during and after the appraisal.
Is there anything you’d tweak about this document? Speak up or offer constructive feedback below. If there is enough response, I can post a second round of an improved document in a few weeks. I’m all for better communication, and I would LOVE to get more information like this on a regular basis.
Questions: Do you think this document would be useful? Anything you’d add or take away?
If you liked this post, subscribe by email (or RSS). Thanks for being here.
Awesome Ryan. Thanks for the clarification and pages… will use.
Thanks so much Jeff. I hope this will be helpful for many. I know it will help me to get this type of information. I always like to hear things from the agent’s perspective because the agent often has some great insight. Since many in the real estate community are not used to sharing more details like this with appraisers, it might feel like extra work or an inconvenience, but this is definitely worth it. Maybe this could become the new normal.
Ryan, this is terrific!!! I will absolutely use this. Thank you for all you do to help us out!
Thanks Maddy. This makes my day. You are welcome. I hope this will be a great resource for agents in our area and beyond.
Ryan,
Can you think of an artful way for listing agents to report when the price has been set by a homeowner against the agent’s advice? This is invaluable information to help explain when I’m significantly below contract price.
I like this form a lot and will try to share it with the Yolo folks.
Joe Lynch
It would be nice to know that, but it’s doubtful that would be admitted. It would seem to go against the agent’s role of advocating for their client too. However, I have heard things like this before. I hope this form makes it around.
Excellent Ryan! I love when agent’s will answer these questions and am amazed how often they balk when I ask them. Learning to work together better in our industry is really important. Working together does not mean hitting a value or quick turn time, it means sharing the important information relevant to the job to allow the appraiser to analyze all the pertinent information, some of which the agent’s have at their fingertips and will speed up the process if shared. Another great post Ryan.
Thank you so much Cynthia. I’m glad you brought that up. I completely agree that working together is not about “hitting the number”. Well said. Agents and appraisers can be on the same team in terms of communicating well, being professional, and having an open channel of dialogue, but we are not on the same team when it comes to trying to close deals. I think there is a misunderstanding about why appraisers are asking questions. I would simply say appraisers are collecting data, and the information from the agent is data to consider. Sometimes I hear the sentiment of, “These answers don’t impact value,” but real estate is about so much more than hard facts found in Tax Records such as square footage, lot size, and the physical address. Appraisers are trying to uncover what is motivating buyers and sellers in a local neighborhood, and how they reacted to various aspects of a particular house. That simply cannot be deciphered from looking at Realist, which is why the answers to these questions can provide a fantastic context. In my view a listing agent has given birth to an escrow, and has a unique position of having been with this property since it was conceived. Thus telling the story of the marketing life of the home can be very insightful for an appraiser (let’s not draw the pregnancy analogy too far though). 🙂
I’m stealing this to use as a freebie hand out at an upcoming speaking engagement. If you get feedback and update it please let us know. Great idea!
Nice, Mike. 🙂 Good luck in your presentation.
Nice resource for agents Ryan.
Thanks so much Tom. I hope so.
Love it, Ryan!!!! As an agent I often worry what to say or not to say to appraisers!
Thanks DeeDee. I hope this helps. You’re definitely not along in that feeling. Many agents think they cannot even talk to appraisers any longer. For any real estate agent onlookers, focus on telling the story of the listing, and try to help the appraiser understand how the market saw the property. You’ve been with this property for quite some time, and you have insider knowledge to share. Of course there is a fine line because real estate agents cannot try to steer the value one way or another. Some might even view this sheet as trying to steer the value, but really it’s about sharing data. If you stick to the facts and the market’s response to the subject property, that can be helpful stuff.
As both a CRS and RAA (NAR residential appraiser designation with about 50 years experience in RE sales and appraisal, I think your list and suggestions are right on the mark. Realtors should understand that Appraisers have the same goal as the agent and look for avenues to the
Fair Market Value, which hopefully matches the sale price. Information to make the appraiser’s job easier and to explain “red flags” are always welcome and personally, I gladly accept comparables, especially when they bracket the subject’s value and are accurately reported. Much of the time I have selected the same comparables furnished. Finally, “never hold the tape measure”, I have seen agents and clients with gashes from the end hook”.
Thank you Thomas. I appreciate your comment. I am going to inspect something funky soon and I can’t wait to talk to the Listing Agent about the marketing of the property, sales used to price it, feedback, etc… This will be very important data for me.
Yikes on the tape measure. That would not be a good day. 🙂
You are welcome to show my location, Alhambra, California.
And note, my son, Thomas Jr., who works with me is also a certified appraiser, NAR director and currently serves his 2nd year as Chairman of the California Regional Multiple Listing Service (CRMLS) with about 100,000 members.
Great to know. Thank you. I’m so glad to hear you work with your son and kudos to both of you for serving the real estate community.
This is great. I too thought umless the appraiser asked that we had to stay at arms length and could not provide the data as we use to do years ago.
I love being able to share I had been putting this information in Docs in the MLS however this would be a great way to compile is one simple place for the appraiser. Thanks for sharing
Deb Beran
Associate Broker
RE/MAX Lakefront Realty
Smith Mountain Lake Va
Thanks Deborah. I think lots of people feel that way. There is a big difference between trying to influence an appraisal and sharing information. Yet there is also a fine line if we’re honest. I think each agent and brokerage needs to figure out what it looks like to be sharers of data in a way that does not even in the most subtle way try to steer value. I know I appreciate it when agents stick to the facts and tell the story of the property and the marketing of the property. That’s golden. I think it’s great you’ve putting this information in MLS and I hope you continue to do so. Best wishes.
I love the “these are the comps we used to price the home” strategy. We do this and use a spreadsheet with a column that explains how we came to a higher or lower price than the comps. I also think it’s important to have professional and friendly conversations with the appraiser starting when you get the scheduling text. We aren’t on opposing teams.
Thank you Matt. I like this because it’s about context. How does the subject fit into the context of the market? I definitely appreciate courtesy also. Thank you for that.
Thanks, Ryan! The forms are great. I have downloaded and will reference. Always appreciate your insight.
Thanks so much Julie. Keep me posted if you have any questions.