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Real Estate Agents and FHA

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Esox

Member
Joined
Apr 13, 2008
Professional Status
Certified Residential Appraiser
State
Wisconsin
After not doing FHA appraisals for a number of years (I did quite a few at the end of the last and the beginning of this century), I took a class last fall and re-upped on the FHA list. Like in many places I'm sure, it seems FHA financing is becoming more popular with some of my clients, one in particular. I've done five FHA appraisals for this client in the last three weeks and I am doing an inspection tomorrow for a sixth.

I've found the listing agents for these sales have little understanding what FHA requires as part of an appraisal. I've had two agents complain to me it is unfair that sellers have to re-mediate peeling paint, have to have an inspection for what may have been friable asbestos, etc. They've called me trying to do an end run around the lender UW. I just tell them to call the bank. Things have gone fine, but it's getting a little annoying. Most of them have little FHA experience, and it would be nice to get some of these agents a little education so they understand what their sellers are agreeing to when they accept an offer with FHA financing.

I know some of you guys/gals are into FHA appraising big time, and was wondering if you've ever given a presentation at a real estate office to provide a little info on what agents can expect from an FHA approved appraiser during an inspection, and what may be required stemming from that inspection?

Seems to me a little time spent in a couple of offices armed with my wits, charm, and the FHA Handbook could go a long way for making this easier. It might not be a bad little marketing ploy as agents who feel you know what you're doing are going to remember you when somebody asks if they know an appraiser.

My former partner and I used to put together an absorption study we would then discuss and give to agents at their office sales meetings. It worked like a charm when we were building the relocation part of our business. When agents were dealing with transferees and were asked for a recommendation off a relo list, the brokers sent them our way more often than not. We downsized a number of years ago and don't have the office help to put that together anymore, but agents still mention it to me and it results in referrals to this day.

Anybody think a couple minutes spent explaining to a group of agents about the FHA appraisal inspection process would be worthwhile?

Kevin
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Yes, I believe it would.

Difference between then and now will be many agents will not (will refuse to) understand that they cannot boss you around on this. The mind set is very different now than even just 5-10 years ago.

Let us know how it goes for you!
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
KDunn,

I would refer them to the handbook, revised append. D and the mortgagee letters and tell them to read them. They are available online for their review.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Personality comes into this and I'm guessing that KDunn can pull this off. I used to be able to, but doubt I could now.
 

Roy Courtney

Senior Member
Joined
Dec 8, 2006
Professional Status
Certified General Appraiser
State
Texas
I believe being the guest speaker at the "sales meeting" for a local Realtor can be one of the best marketing programs ever. It gives you a chance to personally meet many sales agents and explain more about the requirements that the appraiser must face. The more they understand it seems the better they will work with you. I know it has put me on lists with various lenders that never used me before. The lenders want the sales agents to use them. The agent will ask the lender "do you use zzz as an appraiser?" The lender will say "no, they are not on OUR APPROVED LIST!" Then the agent tells the lender well when you get them on the approved list give me a call and we can bring you some business! It really has worked that way numerous times for me! I love it when that happens!
 

Esox

Member
Joined
Apr 13, 2008
Professional Status
Certified Residential Appraiser
State
Wisconsin
Thanks, Pam.

Roy, that's exactly what I'm talking about. I know the adversarial relationship between agents and appraisers runs deep. Deeper for some of you that have had to endure market conditions much worse than I have here in Beertown. I learn a lot about market sentiment from agents, and have always enjoyed talking about the market with the good ones. I try to inform those that lack understanding about the appraisal process, and what I'm finding is that even some of the good ones are unsure about what an FHA inspection/appraisal entails.

I just want to share and make the real estate world a more peaceful place for all its inhabitants. :D

Kevin
 

Roy Courtney

Senior Member
Joined
Dec 8, 2006
Professional Status
Certified General Appraiser
State
Texas
KDunn,
We do not have to have an adversarial relationship with anyone involved in mortgage lending. Explain that we have a job to do and we WILL do it honestly! We cannot play games in our situation. If your value is too high it hurts the buyer. If it is too low it hurts the seller. Take a divorce situation, you cannot help one party without hurting the other. We just have to be fair and do our job. If Realtors, lenders, etc. cannot buy into that then our profession is just a joke! There are some great people in the real estate and lending business! We do have a few rotten apples in the group, maybe they will starve into another business soon.
 

BRCJR

Elite Member
Gold Supporting Member
Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
Just remind them, as nice as you possibly can, they are not the client and you are bound by USPAP not to discuss the appraisal with them.

They have always been OK with that when I have done so.
 

Roy Courtney

Senior Member
Joined
Dec 8, 2006
Professional Status
Certified General Appraiser
State
Texas
Bill,
I understand your point. However think how you would feel if for some reason you were arrested. You hire an attorney to represent you. Your attorney goes to the jail and tries to find out what crime you have been charged with. What your bail would be, etc.? Guess what...YOUR attorney is told that he/she cannot be given that information because it is confidential. Yep, totally absurd. Now think how the Realtor who is representing the buyer, or the one for the seller must feel when they are also contracted to represent the parties to the transaction and they are told "confidential". How about the homeowner who is refinancing their home and pays me $400. cash at the door. They later call to find out what their home appraiser for? Too bad, it's confidential!
 

Esox

Member
Joined
Apr 13, 2008
Professional Status
Certified Residential Appraiser
State
Wisconsin
Bill, I don't have any problems explaining confidentiality issues to them. I'm not asking how do I respond to their questions. You're right, though, agents, for the most part, understand the need for confidentiality.

What I was trying to get at is it is too bad that agents don't have a better overall understanding of what they and their sellers may have to deal with when they accept FHA offers. I think I could make their lives, and mine, a little easier by sitting down in a sales meeting or four, and explaining what they might expect as far as repairs, how the inspection is conducted, etc. I was asking if anyone had tried something like this or if it might be worthwhile? Roy has obviously spoken at sales meetings and found it good for business. I have in the past, also.

I wonder how many agents might steer their sellers away from an FHA offer because they are ignorant of what the appraisal might require? It probably doesn't happen often, but I bet it happens. I wonder how many know that FHA doesn't require the repairs they did during the VC sheet days? I wonder how many have heard about the four S's? Safety, Soundness, Saleability, and the other one, what is it again, oh yeah, Jose Carreras.

I'm with Roy on understanding the frustration of homeowners and agents when you tell them flat out, "sorry, can't talk to you."

Kevin
 
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