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tips for working with appraisers

Thoughts on real estate agents influencing the appraised value

January 19, 2016 By Ryan Lundquist 22 Comments

I wish every agent would be proactive about talking with appraisers, yet not everyone is on board with that. In fact, someone recently told me he thinks using my appraiser information sheet is a violation of Dodd-Frank. So I’d like to unpack two thoughts when it comes to influencing appraisers, and then give a helpful statement that might be useful for agents when sharing information with appraisers. I’d love to hear your take in the comments.

providing comps to the appraiser - sacramento appraisal blog

Two Things About Influencing Appraisers:

  1. Providing Data: As an appraiser I want as much information about the property as possible. I want to hear how the market responded to the home. How many offers were there? What price levels? What type of feedback was given from buyers and other agents? What recent upgrades have been made? The answers to these questions can be helpful since my end goal is to figure out how the subject property fits into the context of the market. Sometimes these insider details really can help paint context, so I need to be in tune with the details. I definitely prefer agents to share any sales, listings and data that were used to price the property too if possible because I want to understand the mindset of the agent or seller. Yet I am not a lawyer, so I cannot tell anyone for sure that providing sales is okay in the eyes of Dodd-Frank. I recommend each agent and brokerage to figure that out. However, on a practical level as an appraiser I know I want to get as much information as possible about the property, so I am in the habit of asking many questions. This is one of the reasons why I developed an appraiser information sheet so agents can be proactive about answering questions appraisers tend to ask.
  2. Hiding Stuff: Sometimes I hear the real estate community say, “It’s not okay to give appraisers comps because it’s an attempt to influence the value.” I get that because trying to pressure or coerce for a certain value is off-limits. That’s so 2005, right? Yet is giving appraisers “comps” the only way influence can happen? What about all the documents that are hidden on purpose from the appraiser? Pest reports, agent visual disclosures, contract addendums, repairs negotiated between the seller and buyer not mentioned on purpose in the contract, documents uploaded to MLS during the listing but then removed before the appraisal is ordered, etc… I’m not pointing fingers or sitting on a moral high horse by any means, but only saying influencing an appraiser can show up in many different ways. Sometimes it’s about what is said, but can it also be about what is not said or disclosed? Thus the conversation about influence seems to be about more than just giving an appraiser “comps”.

Agents need to take Dodd-Frank very seriously because it is professional and ethical to give appraisers space to be an unbiased neutral party in the transaction. Bottom line. Yet in my mind it is also professional for agents to serve their clients well and be proactive and prepared to answer questions appraisers tend to ask. Bottom line. Thus if you use my info sheet or something like it, I recommend using a statement like the following to explain why you are providing this type of information to the appraiser during the appraisal inspection.

A Statement I Recommend Agents to Use:

“Appraisers normally ask me questions like this, so I answered them for you to be proactive and professional. Would you like this information?”

information-to-give-to-the-appraiser

I hope this was helpful.

Action Steps: 

  1. Consider using the statement I mentioned above to help clarify and describe your actions as being proactive about answering questions rather than trying to steer a value. If an appraiser doesn’t want to take your information, respect that decision and move on.
  2. Feel free to use the “information sheet” I developed. If you think any portion of it could potentially improperly pressure an appraiser, then edit or change that portion. You be the judge.

A Quick Year in Review to Use: Here is a quick year in review graphic for the Sacramento housing market. Feel free to use it unaltered on your blog, on Facebook, Twitter, etc… I always appreciate a link back.

year in review - sacramento real estate market - 2015

Questions: Agents, what do you tend to hear in your office about what is okay and not okay to share with appraisers? Appraisers, in what ways are you being pressured right now to “hit the number”?

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Filed Under: Appraisal Stuff, Resources Tagged With: appraisal group in sacramento, Dodd Frank, Home Appraiser, HVCC, influencing appraised value, sacramento appraisers, Sacramento House Appraiser, talking to appraisers, tips for working with appraisers

5 things appraisers want from real estate agents

February 19, 2014 By Ryan Lundquist 10 Comments

Let’s be real. There is often tension between real estate agents and appraisers. And there is definitely room to help improve communication between both parties. That’s why this post is relevant from an appraiser’s perspective. Part of me hopes in response someone will write “5 things real estate agents want from appraisers”. I hope this will highlight a few basic and practical ideas for how to better work together. Read over the short list, apply what seems reasonable and let me know what you think in the comments.

meme generator

5 things appraisers want from real estate agents:

  1. Photos: Insert 20-25 photos in MLS so appraisers can get a better sense of your listing. Having pictures of the main rooms, a few of the kitchen and bathrooms, some of the rear landscaping and any to highlight remodeling or upgrades can help us visualize the home. Or if you mention there is an addition, please include a photo of the addition. Ultimately, words in MLS like “remodeled” or “upgraded” can mean something different to everyone, so images can help tell a better story. When you take photos for a listing, just think about how snapping a few extra shots on the front end will save you time on the back end from answering questions from appraisers on the phone.
  2. Concessions: It’s very helpful when you let us know in MLS if there were any concessions paid or given to the buyer by the seller. Appraisers have to list any concessions in the appraisal report, and beyond that consider if any concessions or credits had any impact on the price. In many cases instead of listing out the dollar amount of concessions our local MLS says “CLA” which means “Call Listing Agent”. If your client does not want this information listed for confidentiality purposes, that is understandable, but if that’s not the case, including the amount is one less thing we are going to be asking you about. This will save you time on the phone with appraisers.
  3. Return phone calls quickly: Appraisers are often working on a tight deadline to finish a report. This means the appraiser is probably hoping to get the report out by the next day or even in a few hours. When you call back right away, it can be amazingly helpful. Of course the appraiser needs to plan adequately too and not expect you to respond in lightning speed (One of my favorite sayings is: Your lack of planning does not constitute my emergency). On a related note, remember if the appraisal is delayed, it can delay closing in light of QM guidelines that state a Borrower needs to see the appraisal at least three days prior to escrow closing.
  4. Tell the truth: This probably goes without saying, but please tell the truth. If appraisers get incorrect details from you and end up using what you told them to help shape an opinion of value, that’s not good. If you didn’t know, what you say and think can really matter because you provide an insider look at the market. This means if there were not multiple offers, please don’t say there were. Or if the property had some issues not listed in MLS, let the appraiser know what was wrong when asked. Sometimes I’ll call a Listing Agent for a recently closed sale and I’m told very confidently it was a fixer, but then the Buyer’s Agent will tell me it was a total remodel (this is where including photos in MLS can make a difference). At the same time, it’s understandable to forget an older listing. The same thing happens with appraisals because they all blend into one after a while.
  5. Manage Irritation: It can feel like an inconvenience to talk to appraisers – especially when you’re really busy. But if you’re giving off an irritated or “I’m too busy for you” vibe when appraisers call, it’s time to find a way to be present and pleasant for the conversation. Talking to appraisers is simply a part of business. Appraisers should be respectful of your time too, but remember that appraisers are not calling to bother you, but rather do their job. Keep in mind they are also trying to get information from other agents for the comps they’ll use to appraise your listings. If they cannot glean insight from agents for those properties, it could potentially harm your deal. By the way, check out 7 things real estate agents should know about appraisers to glean some context to help understand appraisers.
  6. Upgrades: I’m adding an honorary item #6 in light of my friend Joe’s comment below. Appraisers really do want to know about upgrades directly from the Listing Agent or owner. I’ve written about this before, so I did not include this point above, but it is definitely a top-notch item. How has the property been upgraded in recent years (think inside and outside)? Make a list and give it to the appraiser. If it’s relevant, read more about information to provide the appraiser during the inspection.

NOTE FOR APPRAISERS: The appraisal industry is not known for its exemplary people skills. I hear continuous feedback from the real estate community about appraisers who are impersonal and come across as very anal. It’s okay to be introverted or focused on work, but at the same time the appraisal industry needs to freshen up a bit on communication skills, stop incessant complaining and be proactive about building a better reputation. It’s still possible to remain neutral and unbiased while being nice. I have nothing but love for my colleagues, but appraisers can do better (which can be good for business also).

Questions: What do you think of the advice? If you are a real estate agent, what advice do you have for appraisers? Feel free to comment below.

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Filed Under: Resources Tagged With: Frank-Dodd, Home Appraiser, House Appraiser, HVCC, return phone calls, sacramento real estate appraisers, talking to appraisers, tips for real estate, tips for talking with appraisers, tips for working with appraisers

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