You don’t have to be an appraiser BUT…

Homes will not appraise; a myth of the market today.

Real Estate Agents do not have to be appraisers to understand the process and some of the information that they can provide to their clients in a positive manner. If a client does not understand the process, how can he make good decisions regarding pricing?

Some important issues that will have an impact on an appraisal…

1. Does the property conform to the area? If a property is odd to an area it will affect the appraisal. An example might be a log home is an all brick neighborhood.
2. Is the property priced in line with other like homes in the area? If a home is priced $20K higher than a like property across the street. It will be hard to appraise even if it has upgrades. Some properties might be upgraded to the point that they cannot sustain the cost of the upgrades. The upgraded property may sell quicker but will probably not return the entire up grade investment
3. Upgrades need to be documented and cost substantiated in order to be considered by an appraiser.
4. An agent can provide pertinent information regarding a property to an appraiser as long as the intent is not to influence the appraisal. It will be the appraiser’s decision as to how the information factors in.
5. If considerable remodeling has been done to a property. Before and after pictures will be helpful.
6. Basements can vary in how much value they add to a property. How much and how well the basement is finished will impact the appraisal. Also, comparable homes with similar basements will help determine the value.
7. Agents need to research comparable properties more thoroughly to determine exactly which features like basements and upgrades are included in the comparables and how much value they will add.
8. Foreclosures will have a varying impact on a property. If one property out of many is a foreclosure the effect will be minimal. If there are multiple foreclosures in an area, it will appear that they have a much greater impact on similar properties in the area. Some research is necessary to determine exactly what is causing the foreclosure issue.
9. Appraisers should be competent in the area where the property is located in order to understand the nature of the area.
10. All of these points are considered in determining a fair value for a property for all parties to the sale including the lender. The more an agent understands about the process and the better the support documentation and communication, the more likely the property will be priced correctly and the appraisal not be a stumbling block in the process.