When’s the last time you picked up the phone and called an appraiser? Maybe you had a question about how to adjust for an inground pool. Maybe you had a problem and the home didn’t appraise at the sale price. Do you ever communicate with the appraiser?
While most appraisers and Realtors have good working relationships with open communication, there are still some who are afraid to speak to the appraiser, or who are just unsure of what they’re ‘allowed’ to say.
Despite what many say, or the horror stories you may have heard, communicating with an appraiser can be done, and I promise you it can be helpful!
We won’t just discuss how and when you can talk to the appraiser, but we’re going to give you helpful information on how and when all parties can talk to each other, regarding the appraisal process!
Communication between a Realtor and an Appraiser
Let’s go ahead and get the big one out of the way.
Loan officers speak with Realtors daily, making sure the deal is running smoothly, that the buyer has all their needed documents, and that all the inspections, appraisals, and 100 other things are being ordered, signed, and scheduled. Am I right? How many calls from loan officers did you take today? If you’re busy, I’m guessing that it’s a pretty high number! But Realtors sometimes also need to talk with Appraisers.
David Bunton of The Appraisal Foundation writes that “We…encourage brokers to actively communicate with appraisers in a professional and productive manner. Real estate professionals should feel empowered to supply relevant materials, including the terms of the sale, applicable comparable sales, and any evidence of notable renovations done to a home that might affect its value.”
Do you feel empowered now? I hope so! Mr. Bunton said that giving information to the appraiser about recent updates or changes to the listed home can be extremely important. Simply leaving a list on the counter, or emailing or texting the following information to the appraiser can save time and improve communication:
- List of repairs, updates, remodeling, or additions.
- Date each was completed (ballpark estimates are ok).
- Cost of each (again, ballpark is just fine).
Additionally, it is 110% ok for you to share your pricing strategy with the appraiser, including a list of comparable sales. Some appraisers may shy away from looking at this information, but it never hurts to try. Also, if you know any insider information about any of the sales, now is a good time to relay that to the appraiser. For example: the house next door was trashed and that is why it sold for so low. The house down the street sold a year ago and it is the identical floor plan to the house for sale. Make sure the appraiser has this information. We’ll discuss this in more detail in the next chapter.
Just remember to keep it professional, and don’t pressure the appraiser. Again, Bunton states, “… real estate professionals are legally barred from any communication with an appraiser that is intended to unduly influence the outcome of the appraisal. While it might be obvious that coercing an appraiser is off-limits, it is always a good idea for agents and brokers to make sure an appraiser or regulator couldn’t interpret their communications as an attempt to improperly influence an appraisal. An example of improper communication would be asking an appraiser to provide a valuation that matches the asking price of a particular home. Another example could be telling an appraiser he or she will not receive future assignments if the appraisal does not facilitate a transaction.”
Communication between a Loan Officer and an Appraiser
Realtors juggle 114 things each transaction. One of them is coordinating with the lender all of the appointments, inspections, re-inspections, etc. While you’re talking with the loan officer, here are some tips. I’m giving you these so that you can assist the loan officer in making everything run just as smoothly as possible.
Since the appraiser will 99% of the time be getting an order from the lender or lender’s representative, they are the first point of contact for the appraiser, regarding the property to be appraised. So it’s in everyone’s best interest that they get all the information needed to the appraiser at the time of order. And you can help with that. Here are a few ways:
- Land size. Often an appraiser arrives at a property thinking they will be looking at a cut and dried Ranch-style home on five acres, when it turns out, the sellers just sold off three acres and only the home and two acres are to be appraised. Or maybe, the purchasers are also buying the adjacent 10 acres from the seller. The appraiser needs to know this! Make sure the lender has a survey and legal description if possible, and ensure they get that to the appraiser.
- Purchase Agreement. This one should go without saying, but almost weekly, we get a purchase assignment either without a purchase agreement, or without the full agreement. Sometimes, we’re unaware that there’s been a change to the purchase price. That could lead to some serious issues! So either get the full agreement to the lender, or communicate with them that the full agreement will come soon, and that there are 10 pages for example, or a new addendum coming, etc etc.
Communication between a Realtor and Homeowner
Lastly, I want to touch on what kinds of conversations you as a Realtor can and should be having with your sellers in order to help the appraisal process move forward as easily as possible.
For your reference, I’ve listed five tips for you to pass on to your seller before the appraiser comes.
- Make a list of improvements you’ve made in the last 10 years to your home, including dates and prices (if possible). Have this for the appraiser when they come. [Realtor, you may have already collected this information during your listing process, but it’s good for the seller to have it ready for the appraiser as well]
- Get out of bed. Need I say more? You’d be surprised how many people are still in bed, or have kids in bed when the appraiser comes. Because of Tip #4 below, everyone needs to be up and out of bed when the appraiser is there.
- If you have a copy of your legal description or survey, have those handy for the appraiser. Make any notes for the appraiser, especially if there have been any changes in land size, or if the property is on multiple parcels.
- Be ready for the appraiser to access and photograph all areas of your home. This includes all rooms and buildings, crawl spaces and attics. Attics are a big one here, so make sure they’re accessible and if you have a ladder, go ahead and get that out and under the attic access point. You’ll be the appraiser’s new best friend!
- Clean up! Just because your home is under contract now doesn’t mean you shouldn’t keep it close to show-ready for the appraiser. It doesn’t have to pass a white glove test, but make it presentable.
In any relationship or transaction, communication is key. The better the communication is, the better the relationship will be, or the transaction will go. Following these tips may not cover every single issue that comes up, but it will help to open up the lines of communication between all parties, so that the entire process of selling and appraising is a smooth one.
Committed to helping you understand your home’s market value,
Ryan Bays, SRA, AI-RRS