Verifying Sales With a Realtor

[Doug DeMars]

In many instances, data verification BECOMES data collection, because you uncover so much unreported information about the sale.

...data collection BECOMES data verification...

 

[William K]

I would hate to have to go before our state board and try to defend the position that "agents can't be trusted to tell the truth" therefor I don't contact them in regards to their sales..... yet they are the same individuals that put the sales info into the MLS and I have no problem accepting that as fact.



I can hear the board members asking, "Which one are you Dumb or Dumber?"

 

[Ken B]

I would hate to have to go before our state board and try to defend the position that "agents can't be trusted to tell the truth" therefor I don't contact them in regards to their sales..... yet they are the same individuals that put the sales info into the MLS and I have no problem accepting that as fact.



I can hear the board members asking, "Which one are you Dumb or Dumber?"

That statement would be pretty dumb. Did someone say something to that effect in this thread?

 

[DJBanas]

If you use a Realtor for verification and then later wind up in court because what they told you was untrue, partially or wholly, can you sue the Realtor? The answer is "YES" the Realtor can be sued by the appraiser, the lender, the borrower or any number of other parties if what they say is detrimental to the value of the property and placed in the report. I was told this about 4 years ago by an agent who had about 30 years in the business when I called to verify info. He ended up stating that all he could verify is what was on the MLS sheet, no additional information. Sounded like someone who got burned.

I'm surprised Realtors don't ask for some type of release from damages or "hold harmless" form when talking to us.

BTW, I also had an agent who wanted to charge me $100 for verifying information. Told him to take a flying leap!

 

[Karl]

Originally Posted by William K
I would hate to have to go before our state board and try to defend the position that "agents can't be trusted to tell the truth" therefor I don't contact them in regards to their sales..... yet they are the same individuals that put the sales info into the MLS and I have no problem accepting that as fact.

I can hear the board members asking, "Which one are you Dumb or Dumber?"

When you say Dumb or Dumber Would that be the Board member or the Appraiser?? (A try at humor)

I'd hate to try defending the need for APPRAISER'S on typical RE Trasnsactions. after reading several recent & some past threads in this Forum!!

Wife ask WHY do you even look at that now that you no longer do Appraising?? Guess my answer is not only addicted!!! BUT I juat gotta see how bad it gets!!

 

[Michigan CG]

Here is the perfect example. Have a high end home to appraise and I find 7 comps ranging in sales price from $350,000 to $625,000.

Sale two sold for $400,000 and is a little low in terms of $/SF but not bad out of line. The MLS says "Add your finishing touches" buried in the description.

I call Listing Realtor and she says the home is not finished all the way and needs kitchen counters, it has no garage and the master bath is not finished. I ask how much $$ to make the property comparable to other properties and she says $30,000.

I then call the buyers agent. She tells me there is no trim in the home, the exterior stonework is not done, it has no driveway or concrete pad. Some flooring on the main level was missing in addition to what Realtor #1 said.

I ask how much $$ and she says they spent $60,000 so far and have $20,000 to go to make it comparable to other similar houses.

The MLS photos do not show any of these discrepancies and without verification of the sale through BOTH Realtors I would not have known any of this and the value of the subject would have come in significantly lower considering I thought it was my best comparable.

No one can convince me that verification through Realtors and/or buyer and/or sellers is not a requirement to do this job correctly and diligently.

 

[Deleted member 128537]

In Wisconsin rural areas there is practically no accessible public data so one has to call realtors. And assessors are notorious for not having consistent records. They are hard to get a hold of and if you can get them to call you back in 3 days they probably can't tell you much more than you already know.

Getting in touch with buyers however is hard and sellers next to impossible. Buyers don't like being called and asked about their real estate transactions. In small town rural areas that's a really good way to get labeled a not so nice name. Plus in rural areas they really don't like someone knocking on their door. Liable to get shot

 

[Michigan CG]

..........And assessors are notorious for not having consistent records. They are hard to get a hold of and if you can get them to call you back in 3 days they probably can't tell you much more than you already know.

Getting in touch with buyers however is hard and sellers next to impossible. Buyers don't like being called and asked about their real estate transactions. In small town rural areas that's a really good way to get labeled a not so nice name. Plus in rural areas they really don't like someone knocking on their door. Liable to get shot

If this is your experience then you are going about things wrong.

For background, I live in a rural county in Michigan for the last 2.5 years. Before that I was in Iowa, which is a pretty rural state last time I checked. I have also done commercial work in Wisconsin and they are, like Iowans some of the most friendly people I have ever met.

Let's break this down since I am tired of work at this point.

Getting in touch with buyers however is hard and sellers next to impossible.

Well, this depends on how you are trying to get in touch with them. Phone calls don't work. Knocking on doors does work. I know, I have done it many times. I did it tonight.

Walk up to the house and knock on the door. Make the new homeowner the expert and you the needy person. "Hi, my name is Fred and I am an appraiser. When you bought your home and applied for a mortgage some idiot like me had to appraise your home for the bank."

This breaks the ice.

Then compliment the home, no matter what it is. Then see how they are reacting. Most of the time you will get a person who now thinks they can be of help and are important in a process.

Then start asking questions and keep going till you feel that you might get some resistance.

I have been invited to tour the homes many times. I have had a couple beers with the new homeowners (oops most likely against AMC rules if I worked for them) and I have also gained other sale information.

Sellers are harder to interview because it is most likely a phone conversation and you are thought of as a telemarketer.

This process was taught to me by my MAI mentor in confirming commercial sales and leases. There is no reason to not confirm sales for Residential properties the same way commercial properties are confirmed.

To further this process, the appraisal should say what you did to obtain the information so that your client sees the due diligence you perform. "According to the owner, Listing Realtor, Selling Realtor, next door neighbor, proximate farmer, buyer, seller..............."

For the five farm appraisals I have now I interviewed the neighboring farmers three times last week for productivity estimates of the comparables. They were very helpful and they are noted in my reports.

Many on here think I am nuts and about this type of confirmation, it is funny that it is never the CG appraisers.

Try it, it works.

 

[Michigan CG]

I expected the naysayers of verifying with Realtors to somehow discredit post 66.

The silence is deafening.

 

[Calvin the Airedale]

There is nothing to refute in post 66 or 68 that might portray any responder in a favorable light. This is actually a good sign. It means that many who have argued that Realtors can be trusted, sellers will shoot verifiying appraisers on site, and such, may have realized how foolish their argument appears.

People are generally helpful. They want to be helpful. If approached with the right attitude and explanations, they are a wealth of both facts and market perspectives.

There is no doubt that most appraisers skate by with simply snapping pictures on the fly. Half the people in this business don't understand the difference between data sources and data verifications.

The lack of verification may seem to make life easier, but it dooms the analyst to the ninth circle of appraisal hell, namely AMC work.