We invited a fee appraiser to our sales meeting today. Over the past 15 years or so, appraisers have become as difficult to find as a moose in the wild, but lo and behold, there was a real live appraiser talking to the assembled sales force. He was kind enough to toss out a few facts and tips, so sharing seems appropriate. It is safe to say that everything mentioned below is applicable across the country:

1. Comparable sales over 6 months old are not acceptable. That is not the fault of the appraisal industry, it is a real time reaction from a jittery capital market. Suggestion-keep your comps up to date on your listings. If you are not updating your comps every 30 days, you may have a problem at appraisal time.

2. Meet the appraiser at the property with the your latest comps and other evidence of value. We used to do that all the time before money became easy, so it only makes sense to return to best practices of 20 years ago. DO NOT beg or bribe the appraiser. Very bad form. Smile, shake hands, and make it clear that you will be available to assist and answer questions. Exchange contact information. Be professional. Leave. Most appraisers will appreciate the courtesy. Will it help? Maybe. Remember, it is your job to perform your service to the seller at the highest level you can. So go the extra mile for your seller.

3. Understand that all appraisals must measure up to underwriting review. That process is a whole lot tougher than than it was 3 years ago, and many appraisals are “kicked back” for additional justification, or just plain rejected. Appraisers do not like their work questioned any more than you do, so they try real hard to get it right the first time.

4. The consumer and Realtor alike should endeavor to work with a local lender with local appraising and local underwriting. Buyers that insist on using a mortgage broker 5 states away, selecting the appraiser from the directory, and mailing the loan package to an underwriter located 3 states the other direction is a prescription for disaster.

5. There is a “fudge” factor. Appraising is not a precise science. It is a very sophisticated, educated guess, rendered by an expert with years of supervised training and experience. But there is almost always a little room to move the value up. Today, not much, but a little. There is no rule for a “fudge” factor, and there are many influences on that factor. If the buyer and seller agree on a price, and the appraised value is within a few dollars of that price, then the agreed value may be justifiable. But neither the seller nor their Realtor should expect miracles. Appraisers are licensed, and their livelihood depends on doing a good job in expressing an independent value of a property.

I hope these thoughts help. For sellers and Realtors alike, the market is challenging, and everyone involved must cooperate to celebrate a successful closing.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content