Mike Shields says: "For example: At one time in my area the ubiquitous old T-Farmhouse had a very narrow value range provided the houses were of similar footprint, condition etc. The value range was in the 95k-105k range. Now you have Realtors who will tell a seller anything to get the listing (and they eventually find an uninformed buyer to overpay) and Realtors who want a quick sale (i.e. quick commission) so they tell the seller the house is only worth $X. My value range on T-Farmhouses is now 80k-120k. A 40k range. If I find 3 good comps at 80k am I screwing the owner out of equity? Conversely, if I go with 3 comps at 120k am I a number hitting skippy? "
I think that is where your expertise needs to come in to play. In part of my market ranches that originally were built in the 60's sold for under $50K were selling for $230-$240K. In the boom of 05-06, the were going for up to $300k. This doesn't mean I would pay that, but it was the market. If there are similar properties that have been exposed to the market and willing buyers acting in their own best interest paying that for a property, than guess what? That is your new market value. When everything is a cookie cutter between 95-105K there is not much expertise required. When there is a range of 40K, an appraiser needs to use his expertise to form an opinion of value based on what he consideres the best comps available. Our responsibility is to report our opinion of the current market value and not try to create or show what we feel the market should be or once was.
I also have a Realtors license and use it mostly for personal transactions and family & friends. An honest, professional Realtor has ethics and standards that they also must abide by. A Realtor's obligation is to get the highest price for their clients. Sometimes this means marketing a house for more than current market value in anticipation of future negotiations and/ or in hopes that a buyer will find something unique about the property that they are willing to pay more for (location, proximity to amenities, or any other attribute a buyer finds appealing). I have had a situation where two buyer's went back and forth bidding up a property to about 10% over asking price because one had a family member on the block and the other desired this particular floor plan. The price was higher than I thought originally, but by definition, this was the new market value for this house.
Finally, I think it is possible to be both and honest and professional appraiser and Realtor. As long as there are no conflicts ( or even perceived conflicts), there is no reason to eliminate one potential revenue stream. Especially in this day and time and current market conditions, it is very reasonable to seek additional income. Just like a fireman can also be an electrician or a cop can be a security guard, an appraiser should be able to be something else. You just can't be both at the same time.
