Getting an appraisal done can be compared to a blind date. First, there is the phone call from someone you’ve never met; the one thing you have in common is a listing under contract. The call concludes with a confirmation to meet this stranger at the property. Fast forward to the day of your “blind date.” You arrive a few minutes early to make sure everything looks good and is in order. After your quick walkthrough, your “date,” the appraiser, arrives at the front door carrying a camera, measuring tape and clipboard. As you show off the property, you anxiously watch to see what they’re looking for, what notes they’re taking and what they’re photographing.
You know that this intense, but brief, showing is the first impression and the only time the appraiser will get to see your listing. You wonder, “Did I say enough? Did it go well?” As they depart, you don’t know when or if you will hear from them again, but you do know that you’re going to hear about it when the buyer receives the appraisal.
So, how do you ensure success on an appraisal blind date? Remember these five insider secrets:
1) Appraisers do not want to kill your deal. Appraisers are not Freddie Krueger from Nightmare on Elm Street. Even worse than killing a deal after an appraisal blind date is getting killed by Freddie Krueger – er, Freddie Mac. Real estate appraisers are getting sued by Freddie Mac, Fannie Mae and the FDIC at an alarming rate. Appraisers are playing it safe to avoid lawsuits and jail time.
Success Tip #1: Show up and come prepared to share – meet the appraiser at the property and discuss the merits of the property while providing valuable information, such as property brochures, a floor plan and a list of recent improvements. An informed appraiser is a better appraiser.
2) Appraisers are on tight deadlines. Everyone is in a hurry these days, but many lenders and appraisal management companies request turn around times of 24 to 48 hours after the appraisal appointment. Appraisers just don’t have time for open houses.
Success Tip #2: Identify and address any public record, MLS or assessor data discrepancies to head-off property appraisal obstacles – prepare a fact sheet summarizing the attributes of the house, which helps identify what sets it apart from other sales. This eliminates discrepancies while shortening turn-around time.
3) Appraisers don’t attend open houses. In any given week, appraisers may experience seven to twelve appraisal “blind dates” at condominiums, single-family homes and two to four unit rental buildings throughout Chicago.
Success Tip #3: Help us help you – provide a cheat-sheet version of the CMA that was created for the seller to set the list price and make individual comments on competing properties’ positives and negatives. This can align the appraiser’s vision with yours.
4) Appraisers value inside information, too. Appraisers regularly only see inside the property being appraised. Yet, according to the National Association of Realtors 2012 Profile of Home Buyers and Sellers, the typical homebuyer searched for 12 weeks and viewed 10 homes. Based on an informal survey of 30 Chicago Realtors, homebuyers saw five to 50 homes, with most viewing 15 to 25 before they found “the one.”
Success Tip #4: Share your “inside” information – Print the listings which the buyer viewed in the search of “the one” and write a few notes about why those listings were not selected. By sharing your “inside” information, an appraiser increases their inside knowledge, which can improve accuracy and comparable selection.
5) Lenders hold the keys to the cash (and the closing). If buyers weren’t borrowing money, then lender’s appraisal specifications wouldn’t matter. Behind many appraisal frustrations are exhaustive lender requirements.
Success Tip #5: Know the lender’s protocol – when scheduling the appointment, ask the appraiser what lender requirements are mandatory for this appraisal. Knowing the precise requirements, a Realtor can prepare a more targeted market analysis, which raises the potential for a prosperous outcome. An informed Realtor is an empowered and paid Realtor.
What success secrets do you employ to work effectively through the appraisal blind date scenario? Please send comments and questions to [email protected]
Michael Hobbs, SRA, LEED GA, RAA is a speaker, educator, author and president of PahRoo Appraisal & Consultancy, (PahRoo.com, 773-388-0003), a consulting and appraisal firm that specializes in residential and commercial real estate and the education of green and energy efficient adoption.