Tom originally posted this on his blog to help users of real estate appraisal services understand why the appraiser is a valuable component in the real estate transaction and how they add value to the process.
Did you catch my cheesy pun? I hope so-appraisers do have a sense of humor you know. All kidding aside, appraisers can provide much needed value to the home buying process since they are the only unbiased third party to the sales transaction.
We are often seen as “deal killers” standing in the way of people wanting to buy their dream house, however looking at it from a different perspective appraisers should be seen as advisers helping buyers to make smart decisions by not overpaying for what is usually their largest investment. Let’s take a look at the top reasons to value your real estate appraiser and take advantage of their expertise to help you make the best decisions possible.
Honest opinion about value
The main job of a real estate appraiser is to provide an honest and unbiased opinion of value based on market data. This is valuable to buyers because we have no emotional ties to the property and are able to value the property accurately based on market data.
If we were to provide an opinion of value for a house for more than it was worth, and the buyer’s needed to sell in six months due to a relocation or other similar situation, it is highly unlikely that they could sell it for what they paid for it. An appraiser’s main objective is to determine what the majority of like minded individuals would pay for a home, not one or two who are exceptionally motivated.
They’re your personal appraisal wikipedia and can answer any questions you have
I like being able to provide value to people by answering their appraisal questions. Most people only get an appraisal when they buy, sell, or refinance their home, and that’s on an infrequent basis, so they may have questions about the process. I’m also asked questions by real estate agents regarding how and why appraisers do certain things or if it’s okay to use comparables from a certain area.
One of the main reasons I started this blog was to be able to provide answers to people’s commonly asked questions. If one homeowner or real estate agent asks me a question I figure that there are many more people asking the same thing. If you’re reading this blog and ever have a question feel free to contact me. You can even use the tool on the right side of this page to leave a voicemail with your question.
Help you with negotiation
Most people believe that the only course of action when an appraisal comes in low is that the deal is dead, however there are other options. If an appraisal comes back low, the report can then be used as a negotiation tool. A counter offer at the appraised value would put the buyer in a better equity position than proceeding with the original deal and paying for the difference. Since a lender will not loan more money than a house is worth, renegotiating the deal and getting the price lowered can help the transaction.
Help you with square footage
Real estate appraisers are able to provide help when either homeowners or real estate agents have questions about what the accurate square footage of a home is. In my experience, the square footage provided by the county property appraiser’s office is rarely accurate. The square footage is something that needs to be known when selling a home and this information is provided in a pre-listing appraisal.
If an appraisal is not needed then only a floor plan sketch can be provided. It is important that the living area be determined using a common standard so most appraisers use the ANSI standard. I’ve provided more extensive information on this topic in a former post if you want to read more.
New agent education provider
If you are a broker and want to educate your new agents on the end and outs of the appraisal process who better to do this than an appraiser? I speak at numerous real estate offices to help educate agents about how and why real estate appraisers do what they do. For the longest time our job was shrouded in mystery due to lack of communication between agent and appraiser, however over the last several years I believe appraisers have found the value in educating agents so they understand better about what we do.
There are occasions when the appraisal does not come it at the contract price, but lately I have found that if this occurs with an agent whose office I have spoken at, they understand better why this occurred because I have educated them about these situations and why they occur.
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