The majority of listings may not require an appraisal, but Realtors® should consider getting one in certain cases. For example, every so often the oddball listing comes along and trying to determine a list price presents a case of “value-block,” where determining an accurate value is proving impossible. There is good news, though: we provide high-quality appraisals in a timely manner, and can offer a variety of appraisal products tailored to your, your clients’, and the property’s needs. Here’s my top five reasons real estate agents should consider a professional appraisal:
1. Seller Bias
This one is probably the most obvious. Typically, sellers are very attached to their property, and even though you’ve presented plenty of market analysis and data on competing properties, the seller still believes their property is superior to all the sales and listings in the neighborhood for one reason or another. This can lead to higher list prices, which can, in turn, have the property on the market for longer than competing properties. Properties that remain on the market for too long can become stigmatized, which can make marketing more difficult for the agents. Appraisers are the only truly neutral, non-biased party to a real estate transaction. Use that to your advantage! Allow the appraiser to provide their analysis and determine the market value for the property, taking the pressure and liability off you.
2. Cash Sale
In a cash sale, an appraisal is not required, but having an appraisal completed during the pre-listing phase of the process may help put a buyer and seller at ease, and eliminate any “surprises.”Further, a deal done without any input from a certified appraiser presents liability concerns. In a cash transaction, with the buyer and seller being represented by their respective individual or mutual agent(s), any liability falls squarely on the agents. Most cash transactions can be overseen by a qualified and ethical agent, however there are occasions when relying on a professional appraisal to determine highest and best use of a property is warranted. The cost of an appraisal, in comparison to the value of a home, is a minimal expense. While an appraisal will not absolve an agent from their ethical responsibilities, it can be a reassurance to both the buyer and seller, and mitigate any potential complaints after closing.
3. Confirm the Gross Living Area
Last month I received a phone call from an agent. He was holding an open house for one of his listings when a neighbor stopped by (looking for home décor ideas). The neighbor informed the agent that tax records showed that the listing and the neighbor’s house were model match homes, but that his home did not have the additional rooms on the second floor. The agent asked that I measure his listing to determine an accurate GLA. The difference between tax records and the actual measurements was almost 800 sq ft. Las Vegas Appraisal Co. offers home measurement services independent of an appraisal. If an appraisal with a full interior inspection is required let the appraiser know you may want to use the sketch in your marketing materials for the listing. A listing with an accurate gross living area could save your buyer or seller thousands of dollars.
4. Unique Property
This is the most common reason we get calls from listing agents: the property is unlike anything in the neighborhood, and the agent cannot determine an accurate listing price. These assignments are always complex in nature and require a specific scope-of-work to determine value accurately. In these cases, you want an experienced, qualified appraiser for the job. Not all residential appraisers are experts in specific type of properties. While I have the education and experience needed to appraise green/high-performance homes,for example, my partner is more suited than I to appraise high-end equestrian properties. Agents are best served by providing the appraiser with as much information as possible, and sometimes even meeting the appraiser during the inspection to answer any questions they may have. Due to their complex nature, be prepared to wait longer than is typical for the appraisal report when dealing with unique properties.
Most agents think the cost of professional appraisal services are expensive, and that a full interior inspection is necessary for every assignment. However, there are a variety of products available to agents that won’t break the bank. Appraisal assignments can be completed without an inspection. An agent could submit photographs of a property and provide the appraiser with a detailed description of the condition, upgrade features, energy efficiency, or other items that may offer contributory value, or any features that could have a negative impact on marketability/value. These “desktop” assignments are perfect when cost and/or time is a factor. It should be noted that a desktop appraisal may not be suitable in all scenarios. It is up to the appraiser to determine if credible results can be obtained from a desktop assignment.
Not sure if you may benefit from an appraisal? Do you want more information on the variety of products we have to offer? Our professionally trained and licensed appraisers are always here to help you.For larger brokerages, we are available to come to your office and facilitate a presentation with Q&A. Please call us today at 702-894-9279.
About the author: Dan Byrne is the senior/managing partner at Las Vegas Appraisal Co. Dan has performed informative educational offerings to both appraisers and Realtors. To have Dan come speak at your real estate office on appraisal related topics, email [email protected]