By Scott Robinson, MAI, SRA, AI-GRS
The real estate agent-appraiser relationship once resembled a troubled marriage; communications broke down and both sides pointed fingers over who was to blame for the problems.
Hopefully those bad old days are behind us thanks in part to an increased flow of information. The belief that all agent/appraiser contact is prohibited has been debunked, and while appraisers must remain objective, unbiased and completely independent, pertinent and up-to-date information from agents can prove helpful.
Here are five ways to improve agent/appraiser communications to help develop reliable, credible opinions of value:
- Request that lenders hire qualified, competent appraisers. To become a State Licensed, Certified Residential or Certified General appraiser requires a minimum amount of education and experience, as well as passing a State administration exam. But some appraisers go on to further their education and experience and receive designations through professional associations such as the Appraisal Institute. Appraisal Institute Designated members, such as those who hold the MAI designation or the SRA designation, have met rigorous requirements relating to education, testing, experience and demonstration of knowledge, understanding and ability.
2. Ask clients to encourage lenders to obtain information about appraisers. Agents’ clients should request that their lenders ask the assigned appraisers the following questions:
· What professional designations do you have and from what groups?· How long have you been in practice?· What level of experience do you have in this particular market and with this type of property?· Are you familiar with property in this neighborhood?· What types of clients have you had (homeowners, estates, lenders, relocation companies)?If after asking these questions the client and agentdetermine the appraiser is not appropriate for the transaction, the property owner can ask the lender for a different appraiser.
3. Be available to answer the appraiser’s questions during the property visit. Contrary to the misinterpretation of appraiser independence requirements, agents and their clients are encouraged to make themselves available to the appraiser in person. Agents – or their clients -- can provide information to appraisers that could affect the development of an appraisal report. The more data provided for the appraisal, the more information the appraiser has available to analyze. Agents should supply any information on details such as upgrades, remodeling projects and major repairs (accompanied by dates and costs), motivation behind the sale (such as a divorce or relocation) and outstanding offers. In addition, if the home meets any special energy efficient standards, the Appraisal Institute’s Residential Green and Energy-Efficient Addendum should be completed and offered to both the appraiser and the lender. This addendum is a fillable PDF form and is available for free on the Appraisal Institute’s website.
4. Urge clients to read the appraisal. Lenders must provide property buyers with free copies of appraisals promptly after completion, or no later than three days before the loan closes, whichever is earlier. Agents should encourage clients to read the appraisal and check for factual errors. Errors in calculating square footage, number of baths or bedrooms, date of construction, type of construction, garage spaces, and others could affect the valuation of the property. Most lenders have appraisal appeal procedures known as “Reconsiderations of Value.” If problems were found in the first appraisal that cannot be corrected, a second one can be obtained. Any questions should be addressed immediately to prevent the potential delay or derailing of sales.
5. Provide a copy of your comparative market analysis to the appraiser. Appraisers recognize professional and experienced sales agents as experts in their field. An exchange of information that helps the appraiser understand how the home was priced is a productive communication tool between the parties that fosters understanding on both sides.
Most consumers see owning a home as the ultimate realization of the American dream. Real estate agents and appraisers each have key roles to play in making it happen. For appraisers, that role is analyzing data to help generate credible opinions of value. Working together, agents and appraisers can help transform what was once a dream for some consumers into an achievable reality.
Scott Robinson, MAI, SRA, AI-GRS, is the 2016 president of the Appraisal Institute, a global professional association of real estate appraisers, with nearly 20,000 professionals in almost 60 countries throughout the world. He has been active in real property appraisal and consulting since 1987, when he joined Robinson Associates. Since 2014, Robinson has served as vice president for World Association of Valuation Organizations. He has been a trustee for the International Property Management Standards Coalition since 2014, and serves on the organization’s Executive Committee.
