Yes, you just read that headline correctly. The Appraiser can be your friend too.
See, most agents and others seem to look at the Appraiser as a deal killer, a person who dictates the market, a person who makes the transaction harder than it should be, or that person who disagrees with the contract price. However, what most don’t know is that the Appraiser is none of these. The Appraiser is a person who has an entirely different view of things, has different training, looks at the market more in-depth, and has no skin in the game (meaning they have no one to advocate for).
I wrote a blog article not so long ago entitled Realtors & Appraisers.. The Great Divide in 2020. You can read that here. https://skaptheappraiser.net/2020/05/25/realtors-appraisers-the-great-divide/ In this blog, I talked about the differences between both and the roles of each one. You will see that each party has distinct and separate roles within the valuation space.
Now I know many agents will say that what they do with their CMA and analysis is sufficient and that an appraisal, done before a listing is not needed. Many will say that they are the expert in the market. This may be correct, but my question is, why cant an appraiser be an expert as well? The Real Estate Appraiser is not only an expert but an expert in what THEY do. Yes, the Appraiser is the expert when it comes to appraising. We don’t market homes; we don’t negotiate prices; we don’t hold open houses and discuss the fantastic features the home has to get someone to buy it. NO. What we do is entirely different and what we can offer to you and your clients is just that… something you don’t have any experience in and an outside, unbiased look at the property.
When I say an outside, unbiased look at the home, I mean that the Appraiser has no emotions towards it, and we look at the home as it is faults and all with no attachment to it. We don’t get paid a commission on what it sells for. We get paid a set fee to determine in our professional opinion what the home is worth in the current marketplace. We have zero attachment to this home. We aren’t trying to get you top dollar for it, nor are we trying to undervalue it. We simply are taking the experience, the education, and more we have obtained to analyze the market to determine what we in our OPINION think it is worth based on our inspection and the data that’s presented to us.
I will give you an example of this. Recently I had an agent reach out to me asking to perform an appraisal on a home they listed at $750k. The home sat on the market for 35 days, with no one making an offer on it. Yeah, crazy in this market, and they decided to get an appraiser to come out and see what may be wrong.
So here are the basics: The home was listed as a six-bedroom 5.5 bathroom home at 7500 sf. I arrived at the property and began to measure the home. It was a two-story traditional-style built home with a fully finished basement. The basement had a bedroom and a bathroom as well as a bar and rec room. The first floor had a kitchen, bathroom, half bath, bedroom, living room, and dining room. The second floor had four bedrooms and three bathrooms. I finished my inspection, and when I got back to the office, i started to look at the data I collected and quickly realized what the issue was. The problem: The home was actually 5500 sf above grade livable area with a 2500 sf basement; however it was being compared to homes that were in reality 7500 sf above grade livable area with a basement. One of the comparable sales I was sent to look at was 7655 sf above grade with a 3000 sf finished basement. If I was to take the info provided by the agent and did things the same as was done to the subject property, this comparison would now be 10,655 sf. See where I am going with this? This isn’t a knock on the agent at all. The agent was just going off what other agents had put in the MLS and didn’t investigate further. Once I completed my appraisal and came in at a value range of $635k- $656k they then re-listed the home at $656K, and guess what… It got lots of attention then and sold for $25K over list price.
Now I am not stating this story to be a hero. The hero in all of this was the agent who decided to reach out to see what I thought. She wanted to do right by her clients, and in the end, everyone was happy. I state this to show that while we may think we know it all in our professions, we may not know it all. Have you all ever watched the TV show Pawn Stars or American Pickers? These people are experts in what they do and know the value when they see it… or so we think. How many times have they called in another expert outside their field to come in and give them their professional opinion on an item before buying it? It’s almost every episode. Why? Because they want to get another opinion of value on that item from an unbiased third party before they go all in.
I hear so many agents talk about preferred lenders, preferred inspectors etc., but I never hear about a preferred appraiser to help out. You don’t even need to have an appraiser appraise a home, however, wouldn’t it be nice to have one that can answer questions when it comes to FHA requirements, Lender requirements, issues you are having, and or just bounce ideas off of?
Appraisers are not the enemy. You don’t have to agree with them or disagree with them. However, they can give you insight into things you are not aware of, things you just don’t see, or use their expertise to help you help others. I’ll put my personal 2 cents in here. As an agent, you are going to make a good amount off this deal with your commission. You will look like a rock star when you sell this home and be referred to others. Wouldn’t you want to obtain as much knowledge and information as possible to get that deal done? If the answer is YES, why wouldn’t you want to get that information from an appraiser in the area for a small fee instead of being that agent that claims to know it all or constantly bad mouths appraisers?
I pride myself on working with agents. I give my data and my information to them. Am I 100% correct all the time? No, I am not. But by working with these agents, I not only have learned myself about what they do, they too have learned how I do things, and it made both of us extremely better in what we do.
The Appraiser can be your friend.. YES, its true and the agents I work with will tell you the same. We may not agree on everything, but we will agree that we do different things, we need to understand each other better, and in the end, we work together to make each other better.
So who wants to be my friend?