Appraiser speaking to RE Agents

[angie323]

What topics do you typically like to discuss when being invited to a real estate firm's monthly meeting? What topics can we as appraiser's teach agents to help the industry collaborate more effectively and efficiently? It will be a one hour session. Thanks!

 

[Denita Neuenhaus]

From an agent POV a great topic: How to select a comp.

I know appraisers are frustrated with RE agents supplying "comps" that aren't comps.
So am I and other agents like me that actually use comps to determine list price or an appropriate offer. However, I find there is a large portion of the agent community that has no idea of what a comp is or isn't. I think it would be a real service to the office in which you are speaking to give a mini course on comp selection criteria. Just the broad strokes.

 

[ramrcdk]

SCOPE of WORK via the 7-15 pages of SPECIFIC lender instructions, bracketing of each line OR novel of WHY used. Agents have NO idea of the specific GSE & lender & AMC mandates.
Definition of "bracketing".
ONLY choosing higher prices for "comps" doesn't get it !!! Actually measuring THE property they are representing.
They wear a different "hat" & we do understand achieving the highest price or terms for their "clients" is their roll, it's a different "hat", obviously.

 

[ucbruin]

On the lighter side share with them the real estate buzz words and/or phrases that irritate and/or raise red flags to appraisers....

 

[angie323]

On the lighter side share with them the real estate buzz words and/or phrases that irritate and/or raise red flags to appraisers....

Great idea! I'm going to play a game with them at some point. This could be a good one. Let me have em.....
Ready, GO!: Top TEN buzz words/phrases that irritate or raise flags to appraisers.. Let me hear your answers

 

[George Hatch]

I wouldn't take the game approach.

I think I'd focus on the different ways appraisers and (many) brokers define value. It's their job to buy and sell, so it only makes sense that in that role they need to find the 1 willing buyer and 1 willing seller.

Our role is different. The deal at hand may or may not reflect the market independent of what this particular buyer and seller think. Some deals close high and some close low so that's why the contract price doesn't drive the outcome. We're looking for the central trend among many, not the highest or lowest "we can support".

We need to be mindful of not expecting brokers to think like appraisers, and not expecting appraisers to think like brokers. Both will be counterproductive to our respective roles. You gotta be you and I gotta be me.

We don't search for comps by price because "price" is the answer to the question, which means it isn't a search parameter. We're looking for proximate, similar age/size and similar lots. We may only put 4 or 5 sales in a report but in order to get to that 4 or 5 we will also be looking at many more. So in that respect the 4 or 5 are the tip of a large iceberg of data we're looking at. That's why - even if the broker thinks they're more similar - swapping out 1 or 2 of the comparables won't do anything to to alter the opinion of an appraiser who is working to specs.

Oh, and it never hurts to hand an appraiser a list of whatever features the seller or broker thinks are important, there's no reason to leave it to chance that the appraiser will notice everything they need to notice.

 

[alebrewer]

When I've been asked to do Realtor presentations, I try to focus on what the perceived differences are regarding our roles. Both are (theoretically) estimators of value. Some of the differences are: (1) appraisers don't use PPF as a method of estimating value - good thing to share is WHY; (2) Realtors aren't held to the same standards that appraisers are - good thing to share what standards (federal, state, USPAP) appraisers are held to; (3) Realtors aren't typically as concerened with which properties are actually viable alternatives to the subject, as opposed to 'which properties support a value' - good idea to share what criteria appraisers use to determine if a property is truly comparable; (4) I always share the appropriate way to submit an ROV (should there be basis for one) - focus on objective disagreements - i.e. that which can be quantified, do not tell an appraiser what he/she 'should' have done (or should not have done), but rather, present a solid argument for why what was done (or not done) could have been done a different way, and finally - don't direct the appraiser to a point in value (even though, if a Realtor is involved, the sales price is almost always the 'point in value'.

Anyway - that's what I do. There are lots of knowledgeable folks on the forum that, I'm sure, will also have great ideas.

 

[Overimprovement]

1. Difference between above grade and below grade, partial, non, and fully finished basements.
2. Knowing the things we look at for FHA/USDA/VA--such as paint, all utils and possibly appliances operational, attic and crawlspace accessibility (sometimes they are nailed/screwed shut--if I cannot open with my hand...),
3. Brief ANSI guidelines on attics vs GLA, sloped ceiling, ceiling height, etc, and also maybe a few minutes on measuring guidelines.
4. Picture guidelines--I can't believe the terrible/blurry/etc pics I see, or the few # I see. Pics are so quick to take, and storage space is essentially zero anymore. Why not lots of pics?

Good luck!

 

[angie323]

I wouldn't take the game approach.

I think I'd focus on the different ways appraisers and (many) brokers define value. It's their job to buy and sell, so it only makes sense that in that role they need to find the 1 willing buyer and 1 willing seller.

Our role is different. The deal at hand may or may not reflect the market independent of what this particular buyer and seller think. Some deals close high and some close low so that's why the contract price doesn't drive the outcome. We're looking for the central trend among many, not the highest or lowest "we can support".

We need to be mindful of not expecting brokers to think like appraisers, and not expecting appraisers to think like brokers. Both will be counterproductive to our respective roles. You gotta be you and I gotta be me.

We don't search for comps by price because "price" is the answer to the question, which means it isn't a search parameter. We're looking for proximate, similar age/size and similar lots. We may only put 4 or 5 sales in a report but in order to get to that 4 or 5 we will also be looking at many more. So in that respect the 4 or 5 are the tip of a large iceberg of data we're looking at. That's why - even if the broker thinks they're more similar - swapping out 1 or 2 of the comparables won't do anything to to alter the opinion of an appraiser who is working to specs.

Oh, and it never hurts to hand an appraiser a list of whatever features the seller or broker thinks are important, there's no reason to leave it to chance that the appraiser will notice everything they need to notice.

awesome feedback ! Thanks!

 

[George Hatch]

P.S., the "I can't buy this property for that" isn't a persuasive argument when I have half a dozen or more closed sales in hand that say otherwise. If most of my closed sales ended up selling for less than their list then I'm going to expect these actives to do the same - assuming this listing results in a sale.

And, I only extend my search parameters to whatever the ranges are that it takes to result in a reasonable dataset. If I can find enough model matches then I won't look for anything that's bigger or smaller. If that doesn't work I'll extend to 10% or 15% larger/smaller and see if that yields a usable dataset. I work from the inside-out, not from the outside-in.

The Fannie preferences for 6 months/1 mile for a normal subdivision home represent the outer limits, not my starting point.