Appraisals: Working Together – Part 2
At the 2017 Arizona REALTOR® Convention, veteran appraiser Jay Josephs spoke candidly about the love-hate relationship between agents and appraisers. Here is part two of an abridged transcription.
Jay Josephs: One of those questions you need to ask an appraiser is, “Are you certified and will you be the one that comes out to the property?” It’s a gray area if you want to accept a licensed appraiser; mostly because it’s a lesser certification. If a licensed appraiser is calling you, it’s because they’re taking a much smaller fee.
I would want a certified appraiser every time. That’s question number one. Then you need to have some questions that somebody who knows your neighborhood would be able to answer. This is not a good example, “How many appraisals have you done in this zip code?”
A good question would be, “What school district are we in?” A question I like even better, “Can you tell me the boundaries in which you are going to search for comps?” Because if an appraiser knows your neighborhood, he can answer that question and most of the time, the best comps aren’t within a mile radius.
It’s looking at a map and saying my neighborhood goes from here to here, to here to here. So, if you ask him some questions and prepare ahead of time, you can say, “I just took this class from a guy named Jay and he said that I need to make sure my appraisers are geographically competent, so I have a few questions for you.”
You will get some negative responses, but that’s not your problem. You still have a job to do and one of those jobs is to make sure that appraiser is geographically competent.
The last question you want to ask is, “I would like to meet you at the property and spend five or ten minutes going over comps with you. Are you okay with that?” If they say no, then don’t let him into the house.
REALTOR®: Take the keys out the lock box.
Jay Josephs: Take the keys out of the lock box is the one of the first things that you do.
Requesting Another Appraiser
REALTOR®: Can you request a different appraiser?
Jay Josephs: Yes. If you are not satisfied with the answers to your questions, politely end the call by saying, “I need to check with my homeowner and my schedule. Let me call you back.” Then the goal is to get to the person at the appraisal desk, or at the appraisal management company, if you can.
At a minimum, you want to get to the lender and say, “Here is the experience I had with this appraiser. They were unprofessional in these regards and they were not geographically competent. I asked him this question and he couldn’t answer it. I need a new appraiser.”
Eight out of ten times, you’ll get a new appraiser, as long as your concerns are not value-based.
If you said, “I asked him these questions about the neighborhood and he couldn’t answer them…he gave me erroneous answers or he didn’t know the name of my community, historic district, school district…whatever.” Those are all valid reasons.
If the reason is, “We are under contract for $350,000 and I couldn’t get the appraiser to promise to use a comp that’s a mile-and-a-half away that sold for $362,000 eleven months ago,” they won’t help. In fact, they can’t help you. If any part of that dialogue is value-based, their hands are tied.
Also, you want to make this call before the appraiser comes out because once they do, it’s much harder get them off a job. The appraiser may not be willing to leave a job and will probably be owed money. So, that’s why you want to do this over the phone.
Sometimes geographical competency is not only location related. If it’s a horse property, you want to ask questions about horses. And, if you don’t feel comfortable with the interaction, walk away.
REALTOR®: If you’re a listing agent, you don’t hire the appraisal, the buyer does. So, how can you refuse that person to come in?
Jay Josephs: If you’re calling up and say, “He’s not geographically competent, he’s not competent to do this appraisal and here’s why…” the right thing (they should) to do is give you another appraiser no matter what.
As the owner of an appraisal management company, my goal is not to get you a high value. Contrary to what some REALTORS® think, my goal is not to get you a low value. My goal is to get you a fair, accurate value.
This last quarter was the largest gap in four or five years between appraised values and homeowners’ expectations. That’s not good. That tends to lead to value issues.
If you represent the buyer and you want to be involved in that process, tell the lender you want to be listed as the contact person. On every order there is a place that says, “Who do we contact for access?” You want that to be you. That doesn’t always work because a lot of appraisers are still going to call the listing agent, so the next thing you do is call the listing agent and say, “If you don’t want to be there, just direct (the appraiser) to me because I want to be there.”
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