Colorado Homes for Sale in Colorado Metro Denver Area Specialists

I happen to think I am as good as most of the appraisers in establishing vlue of a home. We look at much more than the size with others things being equal. I have not had but one house I sold not appraise and that was ten years ago. The couple used a family member to appraise the property and it came in 15k less. They bought it anyway. I do not try to do their job but that is the way I feel. Eric  

Ray, it would be nice to have an appraiser's opinion, but I doubt my buyers would want to pay for an appraisal twice. Plus, it might be hard to get an appraisal lined up prior to submitting an offer. We might end up losing out on a property. I know my market pretty well and know property values. I usually do a quick analysis of properties before submitting an offer, just so I have a better sense that it's priced according to market value.

Hey guys Rich and Eric, I am not telling about you, no offense, i decided to write about this, because we have discussed before, it does not matter if they have enough on the business or they are new, some they are stubborn for what they think, even if they are wrong on value, I was inspired on those, the bad apples not on you :)

Ray Saenz

One thought would be - this would be fairly dependent on the type of neighborhood?  If we are talking a cookie cutter neighborhood with many of the same floorplan, the comps can fairly accurately point to the value of the home.  Now if we are talking custom homes, all that are unique, that could get a little more dicey.  Thoughts?

I agree. You don't ask a butcher how to paint a house. Use an appraiser, if trained properly, there is a wealth of knowledge that they can share with you in the business...

Scott

Kaushik, Yes, depends the scenario,

Scott, thanks for the support :)  and when I was talking about this, I was talking about the bad apples,  I have seen some around.

Ray Saenz

Ray,

I have a few appraisor friends that I call on when I'm having trouble coming up with fair market price.  We don't have large subdivisions in our area so many of the houses are unique and I find chatting with an appraisor can be a big help.  They also offer another picture of how the market is trending.

Ray,

An Appraiser will (should) always be more accurate but being able to come up with an accurate CMA is just something we have to do!

I think an initial appraisal would be easier for the Seller to swallow if they thought the accuracy of the value would help to sell the Home sooner.

For sellers - occasionally I'll recommend that they get an appraisal before we list the property. Other times, I'll call one of the appraisers that I know and ask them how they'd handle X, and they are very sharing, just as Linda said. Seldom do I have the time to recommend an appraisal before an offer (as Rich said, they may lose the property) though I often write in the offer that the contrace is subject to the property appraising at or above the purchase price.

Ray,

Bad apples everywhere, unfortunately.

Here's another perspective: Why Do Bad Appraisals Hurt Buyers/Sellers???

Eric, Rich, and Marc ... I agree!

Thanks for the post, Ray.

Lucky

Ray, some of us are appraisers as well as real estate brokers.

In smaller markets real estate licensees have to wear several hats, real estate broker, leasing agent, appraiser, mortgage brokers, and others.

In Tennessee now you have to be licensed to be an appraiser but that is a fairly new change.

Jim, does this new licensing requirement apply to refinancing appraisers as well?

Lucky

Hi Ray,

            I don't have a problem with a seller consulting an appraiser before I come in to do my market analysis. Sometimes it may be helpful.

What I do disagree with is your statement,

"is always consult an actual appraiser, they know what they are doing, way better than we do,"

In our market place an appraiser is hired by the lender who in turn calls the listing agent (me) to come out and appraise the property.

One thing I ALWAYS do is ask them what can I bring to help them do their job easier.

I usually bring them a copy of the deed, tax bill, tax card from the town and the P&S (purchase and sales agreement).

Most of them appreciate the effort and it saves them time.

The one thing that makes me wonder is why do they need a copy of the P&S. If they are truly doing an independant appraisal then why find out ahead of time what the buyer and seller have agreed to. Why don't they appraise the property with out knowing?

All an appraiser does in residential sales is just verify the contract price and substantiate that the property compares to a few other properties that have previously sold within a certain time frame.

I recently had sold a condo and the appraiser called me back to wonder why we were selling so cheap as she appraised it higher than what was on the contract. I told her that the condo didn't sell at the appraised price and that the seller wanted to move asap. We had to drop the price low enough to get a buyer interested enough to make an offer.

When we are in a declining market like we are now in our area and sales are becoming fewer, it will be harder for appraisers to be able to make comparable comparisons on certain properties.

The main reason there is an appraiser is to help satisfy the lender as to what the value of the property is to loan on in case the buyer defaults.

We had a relocation seller that had three appraisers come in and tell them what the price should be listed at. That was this past February. We told them and the lender that in February we were headed in a declining market. We told them to lower the price. They did not take our advice and they are still on the market and listed with our competition. Better them than us wasting our time.

I do feel an appraiser is well worth an investment when it comes to commercial sales, not my expertise. 

So in closing Ray I do not totally agree with your post. Sorry for rambling.

Thanks Jay 

 

In rural America, where I live, we do not have cookie-cutter homes and most are a challenge to appraise.  Properties don't turn as often, and the outside of the home is not telling. 

Realtors are inside more homes than appraisers.  We're in the homes that are active, expire or are withdrawn.  We are much more sensitive to market conditions than appraisers.  Appraisers may know a property sold for "x" but don't know why (facing foreclosure, sale contingent offer, divorce, etc) that is not always reflected as a non-arms length transaction.

I do seek out the advice of local appraisers on challenging properties, but have found if I ask 3 different appraisers, I get three different answers. 

I know that many times I do know more than the appraiser about a particular house/area...often they ask my advise.  I have successfully challenged appraisals and won.  I always look at it as a team effort....I respect them and the knowledge they bring to the table and they respect me.

I believe that the job of the listing or selling agent and the appraiser is totally different.

Listing agent do market valuations to recommend list prices for sellers.  Buyer's agents to market valuations to recomend an offering price to our buyers. 

The dynamics of what to ask and what to offer are more complicated than just the price. 

The appraiser does a valuation to protect the lender's investment.  I don't believe that there is any similarity in what we do. 

Agents who have problems with market valuations need more experience or training. 

 

Good post Ray, Your writing in English is improving quite a bit. I know that was one of your reasons for blogging so just wanted to point out that it is working:)

I think it definitely dependa on the experience of the Realtor whether or not the appraiser would do a better job. The important thing to remember, in this more difficult market, is that apprasied value and market value are not the same thing. An appraiser is using historical sales where as a Realtor should also be using active, pending, withdrawn lsitings and more current market data. As a Realtor I am trying to establish what a property will sell for NOT what it's worth.

 

Ray, I agree with Bryant on your improving English.  While I only know you from AR and not the spoken word, I have noted your written messages have improved. (look at all the comments you have received here! )

Now to the topic.  There is a huge difference in a professional appraisal and a CMA. The difference that concerns me are not the lack of details but the fact that an appraisal is based on HISTORY not the MARKET.  So as an agent we have to be sensitive to that fact.  As in Jay's illustration above, pricing now based on old comps and not taking into account a declining market is a huge mistake.

With that said, since you (Ray) and I are in the same market, I know what you are talking about.  We have an abundance of poorly trained agents and managers that haven't got a clue how to handle this market. There collective ignorance of the job at hand is hurting the market, the industry and the consumer.

The sad thing is, these agents don't recognize the fact they are clueless.  I think that is what Ray is trying to state.  Only he said it nicer. 

kk

 

"Hi Ray"

As my husband, Broker Bryant, beat me to the punch. I will have to do a little twist on your post...

Here in Florida the Realtors are real big on Multiply Licensing. They have both licenses Realtor aka Appraiser...

You can only imaging the FAKE power they try to throw around in a deal!

They submit their offers with their own Appraisal. The houses they used for their FAKE Appraisal are normally no where near our listing.

Over the years we have learned to have a little fun with the Multiply Licensed Realtors...We enjoy messing with them. :0)

TLW "The Lovely Wife"...Like I Said On Another Post FAKE Is Funny...ROAR!

Ray,

Most everything has been said before I got here! I would like to point out though, that in my area, Broker's are also allowed to appraise homes.

Also, for myself, I do a lot of Broker Price Opinions on foreclosed properties and reevalutaions which I think gives me an edge over some Appraisers in the area.

I have to agree that the more experience whether being a Realtor or an Appraiser, the better they will be at pricing.

This is a very tough market right now and prices (here at least) have been dropping.

The final word: The House is only worth what someone will pay for it!

As Bryant and Krystal pointed out, there is sometimes a big difference between what a property will appraise for (and differences between sale and refi appraisals) and what a property will sell for in a given market.  Agents factor in current market activity, while appraisers are only permitted to rely on history.

Suzanne,

Are you saying that an Agents have a better handle on it, using current market activity? And Appraisers have "actual value"?

There are a lot of valid opinions expressed here, and some of them are conflicting. I can't believe there are places where appraisers don't have to be licensed! I thought about going for an appraisers license, but after looking at the cost of classes, and the amount of time required, I nixed that thought. Also there is a two year internship required, and the classes are not taught here in Honolulu on a regular basis, so we have to plan on spending weeks if not months on the mainland just to get the required training.

I also agree that as realtors we have a handle on market value, which can vary greatly from the appraised value, especially in shifting markets.

"Jim, does this new licensing requirement apply to refinancing appraisers as well?

Lucky"

The appraiser licensing law has been in effect several years so it's not brand new.

I believe it applies to anyone that performs an appraisal in the state of Tennessee and collects a fee for it.

I know as real estate licensees we can't use the word "value" in relation to the..............well, the "value" of a home.

We're supposed to use phrases like:

• "this is a recommended listing price"    
• "this is a recommended listing range", or
• "this is a recommended purchase price."

Ray,

Being a mortgage broker, I am a outside looking in on this post.

I would have to agree with what Broker Bryant stated.  You are comparing apples and oranges.  The appraiser bases his/her values on what has recently sold.  The realtor uses what is active, pending, withdrawn, sold, etc.  The realtor is creating a starting price or bid.  The buyer negotiates with the seller to reach a value that is fair to both.  Once the contract is drawn, it is given to the appraiser to make an official final statement of value.

I do not believe that realtors think of themselve as appraisers.  I do think that it is their job to provide a fair market price as to what a house is worth.  It is their job to do the research to determine this.  If part of their research is to use CMAs, that it is a fair and safe way to determine value.  If they want to consult an appraiser, again this is ok.  No lender will take a realtors word as what a house is worth.  That is the appraisers job.

I had a neighbor who put her house on the market FSBO.  When I found out how much she was asking for the property (210K, 5 acres, 2000 sq. ft house, barn...in awesome school district") I told her she was shortchanging herself.  She was adament that the price was right...why?  Because she had paid for an appraisal.  To make a long story short, I listed the property, sold it in 10 days for 265K and it appraised with no problem.  Different appraisers, way different opinions.

I have seen some really stupid appraisals in the last year or two.  Last year for example every single VA appraisal I got one either side of the transaction was low several stupid low.  In one case the condo I was selling was the most upgraded unit in the complex.  the VA appraisal came in $30,000 below the contract price yet there were closings for lesser units higher than ours.

The good news, was I successfully challenged ever one of those appraisals.

Would I use the opinion of one of them? Not on your life.

On the conventional side I have seen much better results, but even there I had two where the appraisal was so off that it didn't even resemble reality.

As a professional Realtor helping establish market value is one of my main functions.  In the end it is always the clients call on the final price.

I do consistently recommend an appraisal on custom and unique high end properties.

My final thought:  It may differ in other areas, but you see here several types of appraisals.

1. An appraisal for a loan will come exactly at the price needed to get the loan, no matter how much more the home is worth.  The appraisers never stick their neck out any higher than they need to.
2. If you shop around for appraiser, which most good Realtors and loan officers do, you can always find an appraiser to agree with you.

Linda: You do the right thing, some not :) that's good to read this.

Marc: I agree with you, thanks for your comment.

Sharon: I have seen also some sellers take their appraisal when they refinanced just a few months, that's something that we can never take, Refi appraisals, are usually pushed when needed money.  Thanks for sharing your thoughts and support.

Lucky: thanks for sharing your comment and your support and I am reading that post.

Jay: You are right in your way how you think, I am not saying that I am right or wrong, here in this state, most properties are totally different specially for the market.  thanks for sharing your thoughts, I appreciate your honesty.

Carol: True, not all opinions are the same, thanks for sharing your thoughts.

Monika: that's good to have someone like you, I always learn something new with my appraiser, he is a very professional and well knowledgable, many years of experience with great opinions and advises. Thanks for your support and sharing your experience.

Lenn: Totally agree, thanks for sharing your thoughts.

Bryant: thanks for your compliment and advises, I appreciate always your writings, someday I wish to have the experiece that you have You are Sr Bryant. The good thing  is that you are here for us, thanks again, I appreciate every word.

Kristal, Woowwwww,   you understood me, even when I have troubles with my writings, I am trying to improve my blogs for better, so all of you can read my blogs. Yes, I wanted to say that no offending anyone. thanks for your support and experience.

lovely wife, thanks and I did not know that what they do, thanks for the update and stop by and write on my blog.

Karen, Yes, the appraiser that I use usually tells me that, that the house value for what they are willing to pay, but that it is just cash, and this does not happy usually, everything it is through lenders, I am refering to normal buyers and not investors.  thanks for this thought, you support it.

Michael, thanks for the post, I appreciate your comments.

Jim Lee:  Sorry it was not my intention to skip you, there are a lot of writings that I need to see what is everybody opinion, when you are appraiser that's fine all my respect, if you are doing a professional work, I do not say anything, as lovely wife wrote, I did not know that,   thanks again for your comments and sorry to skip you, but I like to comment of everyone who help me to see and learn different point of views.

Jason, thanks for comment.

Chris, thanks to share your experience.

Randy, We think very similar, thanks for share your thoughts.

Finally, thanks guys for every post, your positive, negative comments and sharing your experience, I appreciate every word, I take postive advises to improve my knowledge. and I use the negative comments to improve myself.

thanks again

 

 

Ray,

I can't tell you how many times I have had a client tell me what their home appraised for only seconds after I told them it would attract a buyer in today's market at a significantly lower price.  We have to caution our sellers that refi appraisals are often 'optimistic.'  Unfortunately, the number they've heard from the appraiser has influenced their idea of what their home is worth, not to mention they've often borrowed against non-existent equity.

I do think that many agents need more training on determining market value.  I am never ashamed to bring along a few colleagues when I need extra help.  In fact, I think it impresses clients that I am able to bring through some of my market's top producers before the home goes on the market.  For higher priced homes (over $1,000,000) it's pretty much our SOP. 

Maureen,

thanks for sharing your thoughts, again, bad apples are everywhere LOL :)  that's the reason that I decided to write about this.

Ray Saenz

Ray-

Great Blog !!  I like to let Appraisers be the Appraisers, the Inspectors be the Inspectors and the Loan Officers be the Loan Officers, etc... 

There is a mini appraisal that you can request from an Appraiser.  It's called a Drive-By.  It doesn't cost as much as a full blown appraisal but it can confirm if your CMA is close without paying $450.

Ray-

Great Blog !!  I like to let Appraisers be the Appraisers, the Inspectors be the Inspectors and the Loan Officers be the Loan Officers, etc... 

There is a mini appraisal that you can request from an Appraiser.  It's called a Drive-By.  It doesn't cost as much as a full blown appraisal but it can confirm if your CMA is close without paying $450.

Lauren,

I like the same, but  we need to be very knowledge in our CMA and value opinions.

thanks for posting

Ray Saenz