\n<\/div><\/div>\n<\/div>\n<\/div>\n

By Erica Christoffer<\/div><\/div>\n

When can agents talk to an appraiser? What can they say? What if an appraisal and purchase price don\u2019t match? Realtors talked to appraisers at NAR\u2019s recent meetings.<\/span><\/span><\/p>\n<\/div>\n

WASHINGTON \u2013 Appraisers are an integral part of the real estate sales process, making it imperative that agents not only understand the fundamentals of the appraisal system but also follow the best practices for communicating with appraisers.<\/span><\/span><\/p>\n

At an interactive session at the National Association of Realtors\u00ae (NAR) recent 2021 Legislative Meetings, panelists shared best tactics for working with appraisers and making the process as smooth as possible for all parties. Here are five of the most pressing points discussed.<\/span><\/span><\/p>\n

Interacting with an appraiser at a property<\/span><\/span><\/h3>\n
Michelle Bradley, vice chair of the Appraisal Standards Board at the Appraisal Foundation, recommended that agents bring a packet of information about their listing for the appraiser. Making face-to-face contact will help build rapport \u2013 even simply introducing yourself, handing over the packet, leaving your card and letting them know you\u2019re available if they have any questions \u2013 is helpful, she said.<\/span><\/span><\/p>\n
While appraisers can\u2019t discuss comparable properties, Bradley said agents can still provide MLS data sheets with brief explanations of why similar homes are relevant to your listing, such as whether they were built by the same builder, have a remodeled kitchen or involve other comparable elements. Agents can also explain why some sales are not comparable.<\/span><\/span><\/p>\n
Look up the legal description of the property and include a copy of the most recent tax bill, which can show whether the home is in a special tax district, said Maureen Sweeney, a residential real estate appraiser and member of the Illinois Real Estate Appraisal Administration and Disciplinary Board. If the appraiser doesn\u2019t accept the agent\u2019s packet of information, then follow up with an email, copy the lender, and list the paperwork and data you attempted to share so that everyone has a record, she said. \u201cThis way you have done your due diligence.\u201d<\/span><\/span><\/p>\n
However, agents and brokers should never try to influence the appraiser, said Peter Gallo, owner and chief appraiser of HomeSight Appraisal in Charlotte, N.C. Don\u2019t tell the appraiser your client needs a certain value, for example.<\/span><\/span><\/p>\n
\u201cGood appraisers want as much information as they can get,\u201d said Claire Aufrance, an appraiser and broker from Greensboro, N.C., who sits on the North Carolina Appraisal Board and the Appraisal Institute Board of Directors. \u201cThey\u2019ll figure out what to use. But I would be careful not to say, \u2018You have to use these comps.\u2019 \u201c<\/span><\/span><\/p>\n
How multiple offers factor into the appraisal process<\/span><\/span><\/h3>\n
Bradley says some real estate pros give her a spreadsheet of the multiple offers on the property. \u201cWe are in an unprecedented market with historically low interest rates and a shortage of housing supply,\u201d she said. \u201cIt\u2019s highly critical to give appraisers all of that data. Let them know how many offers came in. If there were 87 showings and 15 offers or more, that\u2019s absolutely demonstrative of the demand.\u201d<\/span><\/span><\/p>\n
It\u2019s also the appraiser\u2019s job to develop an opinion on a home\u2019s fair market value, and just because the buyer and seller have agreed on a price doesn\u2019t mean that\u2019s the true value of the property, said Francois Gregoire, broker, appraiser, instructor, and president of Gregoire & Gregoire Inc., a residential real estate appraisal firm based in St. Petersburg, Fla.<\/span><\/span><\/p>\n
\u201cThe appraiser has to look at what is the subject property\u2019s competition,\u201d Gregoire said. \u201cIf there is no competition, and you\u2019ve got no supply, that has an influence on the value of that property.\u201d<\/span><\/span><\/p>\n
Different appraisal requirements<\/span><\/span><\/h3>\n
The appraiser has a scope of work for every lender client, which differs depending on the mortgage product, said Bradley. For example, you may have heard of \u201cdrive-by appraisals.\u201d It\u2019s not the appraiser\u2019s decision to do a drive-by appraisal; it\u2019s the lender\u2019s decision based on the loan product the buyer is getting, Bradley said.<\/span><\/span><\/p>\n
If a buyer is using an FHA-insured mortgage, the appraiser has to fulfill both the lender\u2019s and HUD\u2019s requirements, Bradley said. HUD requires the house meet safety, soundness and security requirements, so there might be requested repairs related to those categories. If the buyer is getting a VA-guaranteed mortgage, that adds safety, soundness and sanitary requirements to the appraisal.<\/span><\/span><\/p>\n
Even Fannie Mae and Freddie Mac require appraisers to report \u201ctrue property condition\u201d for conventional loans, Bradley said. \u201cDon\u2019t advise your seller to accept one offer over another just because you think there\u2019s going to be a difference in repairs,\u201d she added.<\/span><\/span><\/p>\n
While some buyers may waive an appraisal in a multiple-offer situation, the lender will likely still require it. Waiving the appraisal means the buyer will purchase the property regardless of the outcome of the appraisal, said Lynn Madison, trainer and CEO of Lynn Madison Seminars, who currently serves on NAR\u2019s Professional Standards and Real Property Valuation committees. \u201cBe careful about waiving the appraisals and what that means in your marketplace pertaining specifically to your contract,\u201d she added.<\/span><\/span><\/p>\n
What happens when the appraisal and purchase price don\u2019t match?<\/span><\/span><\/h3>\n
Once the appraisal is completed, the appraiser can no longer communicate with the agent; communication must be done through the lender, Madison said. Parties can request clarification or additional information or ask the appraisers to consider additional data, which would be submitted through an intermediary on the lender side.<\/span><\/span><\/p>\n
\u201cPertinent data would be a property that is competitive with the subject property that sold recently and that your buyers would probably consider as an alternative to the property your buyers made an offer on,\u201d Gregoire said. Because of lags in reporting, the appraiser might not have been aware of those comparable sales, or there may have been errors in the appraisal report that need correcting.<\/span><\/span><\/p>\n
Racial bias in home appraisals<\/span><\/span><\/h3>\n
Every two years, all credentialed appraisers in the U.S. are required to take a day-long course from the Appraisal Foundation on the Uniform Standards of Professional Appraisal Practice. The next edition of the course will heavily focus on fair housing and illegal discrimination.<\/span><\/span><\/p>\n
\u201cThe profession is taking this very seriously, and if there are problems, the profession wants to root out those problems,\u201d said Gregoire. \u201cWe want allegations to be investigated, and if there is illegal behavior on the part of licensees, they should bear the appropriate punishment.\u201d<\/span><\/span><\/p>\n
If you or your client believe racial bias influenced an appraisal, a complaint should be filed through your state regulatory agency, Gregoire said. The Appraisal Subcommittee also has a website to help complainants determine the appropriate legal authority to receive their complaint: refermyappraisalcomplaint.asc.gov<\/a>.<\/span><\/span><\/p>\n
\u201cThe appraiser side of the business is doing exactly the same thing we\u2019re doing on the brokerage side of the business, which is taking a good hard look at how we do everything to make sure there is no bias in what we\u2019re doing,\u201d said Madison.<\/span><\/span><\/p>\n
Source: National Association of Realtors\u00ae (NAR) <\/span><\/span><\/p>\n
\u00a9 2021 Florida Realtors\u00ae<\/span><\/span><\/p>\n<\/div><\/div>\n
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\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"
By Erica Christoffer When can agents talk to an appraiser? What can they say? What if an appraisal and purchase price don\u2019t match? Realtors talked to appraisers at NAR\u2019s recent meetings. WASHINGTON \u2013 Appraisers are an integral part of the real estate sales process, making it imperative that agents not only understand the fundamentals of the appraisal system but also follow the best practices for communicating with appraisers. At an interactive session at the National Association of Realtors\u00ae (NAR) recent 2021 Legislative Meetings, panelists shared best tactics for working with appraisers and making the process as smooth as possible for all parties. Here are five of the most pressing points discussed. Interacting with an appraiser at a property Michelle Bradley, vice chair of the Appraisal Standards Board at the Appraisal Foundation, recommended that agents bring a packet of information about their listing for the appraiser. Making face-to-face contact will help build rapport \u2013 even simply introducing yourself, handing over the packet, leaving your card and letting them know you\u2019re available if they have any questions \u2013 is helpful, she said. While appraisers can\u2019t discuss comparable properties, Bradley said agents can still provide MLS data sheets with brief explanations of why similar homes are relevant to your listing, such as whether they were built by the same builder, have a remodeled kitchen or involve other comparable elements. Agents can also explain why some sales are not comparable. Look up the legal description of the property and include a copy of the most recent tax bill, which can show whether the home is in a special tax district, said Maureen Sweeney, a residential real estate appraiser and member of the Illinois Real Estate Appraisal Administration and Disciplinary Board. If the appraiser doesn\u2019t accept the agent\u2019s packet of information, then follow up with an email, copy the lender, and list the paperwork and data you attempted to share so that everyone has a record, she said. \u201cThis way you have done your due diligence.\u201d However, agents and brokers should never try to influence the appraiser, said Peter Gallo, owner and chief appraiser of HomeSight Appraisal in Charlotte, N.C. Don\u2019t tell the appraiser your client needs a certain value, for example. \u201cGood appraisers want as much information as they can get,\u201d said Claire Aufrance, an appraiser and broker from Greensboro, N.C., who sits on the North Carolina Appraisal Board and the Appraisal Institute Board of Directors. \u201cThey\u2019ll figure out what to use. But I would be careful not to say, \u2018You have to use these comps.\u2019 \u201c How multiple offers factor into the appraisal process Bradley says some real estate pros give her a spreadsheet of the multiple offers on the property. \u201cWe are in an unprecedented market with historically low interest rates and a shortage of housing supply,\u201d she said. \u201cIt\u2019s highly critical to give appraisers all of that data. Let them know how many offers came in. If there were 87 showings and 15 offers or more, that\u2019s absolutely demonstrative of the demand.\u201d It\u2019s also the appraiser\u2019s job to develop an opinion on a home\u2019s fair market value, and just because the buyer and seller have agreed on a price doesn\u2019t mean that\u2019s the true value of the property, said Francois Gregoire, broker, appraiser, instructor, and president of Gregoire & Gregoire Inc., a residential real estate appraisal firm based in St. Petersburg, Fla. \u201cThe appraiser has to look at what is the subject property\u2019s competition,\u201d Gregoire said. \u201cIf there is no competition, and you\u2019ve got no supply, that has an influence on the value of that property.\u201d Different appraisal requirements The appraiser has a scope of work for every lender client, which differs depending on the mortgage product, said Bradley. For example, you may have heard of \u201cdrive-by appraisals.\u201d It\u2019s not the appraiser\u2019s decision to do a drive-by appraisal; it\u2019s the lender\u2019s decision based on the loan product the buyer is getting, Bradley said. If a buyer is using an FHA-insured mortgage, the appraiser has to fulfill both the lender\u2019s and HUD\u2019s requirements, Bradley said. HUD requires the house meet safety, soundness and security requirements, so there might be requested repairs related to those categories. If the buyer is getting a VA-guaranteed mortgage, that adds safety, soundness and sanitary requirements to the appraisal. Even Fannie Mae and Freddie Mac require appraisers to report \u201ctrue property condition\u201d for conventional loans, Bradley said. \u201cDon\u2019t advise your seller to accept one offer over another just because you think there\u2019s going to be a difference in repairs,\u201d she added. While some buyers may waive an appraisal in a multiple-offer situation, the lender will likely still require it. Waiving the appraisal means the buyer will purchase the property regardless of the outcome of the appraisal, said Lynn Madison, trainer and CEO of Lynn Madison Seminars, who currently serves on NAR\u2019s Professional Standards and Real Property Valuation committees. \u201cBe careful about waiving the appraisals and what that means in your marketplace pertaining specifically to your contract,\u201d she added. What happens when the appraisal and purchase price don\u2019t match? Once the appraisal is completed, the appraiser can no longer communicate with the agent; communication must be done through the lender, Madison said. Parties can request clarification or additional information or ask the appraisers to consider additional data, which would be submitted through an intermediary on the lender side. \u201cPertinent data would be a property that is competitive with the subject property that sold recently and that your buyers would probably consider as an alternative to the property your buyers made an offer on,\u201d Gregoire said. Because of lags in reporting, the appraiser might not have been aware of those comparable sales, or there may have been errors in the appraisal report that need correcting. Racial bias in home appraisals Every two years, all credentialed appraisers in the U.S. are required to take a day-long course from the Appraisal Foundation on the Uniform Standards of Professional Appraisal Practice. The next edition of the course will heavily focus on fair housing<\/p>\n","protected":false},"author":4,"featured_media":5182,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/5181"}],"collection":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/comments?post=5181"}],"version-history":[{"count":0,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/5181\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media\/5182"}],"wp:attachment":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media?parent=5181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/categories?post=5181"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/tags?post=5181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}