Yes, that’s music to our ears . . . “It appraised!”
With my vast experience and years in this business, I have come to weather most of the challenges of our ever-changing Real Estate market. I have come to learn that there are many hurdles that I have no control over. One daunting hurdle is the appraisal.
Not only are appraisals a mystery to buyers and sellers, they are equally mystifying to Real Estate professionals. An appraisal is an art — not a science; what role can your Real Estate agent professionally play in this process?
I meet the appraiser and, if available, provide the following:
- Current relevant properties that are active, pending, in back-up status, and closed (CMA);
- Facts & Trends™ with a square-foot analysis for the subject area by area, square footage and price range;
- The property brochure with accompanying MLS printout;
- Beautiful, professionally-taken, high-resolution photographs;
- Site plan;
- Floor plan;
- Elevation certificate;
- Room-by-room feature sheet;
- All extras, including hurricane protection, generators, alarm/security systems, pools, spas, deed docks;
- If the home was a pre-construction purchase, all the builder’s packet with upgrades and the original cost of same,
- All amenities of the neighborhood;
- The HOA or COA fees; and
- The most recently signed contract.
It is not uncommon for the appraiser’s file to have the original contract offer instead of the fully executed document. I make sure that the appraiser not only has secured all the items above, but also the most recently signed contract with the actual sales price as well as any concessions that the Seller has agreed NOT to pay – even though that may have been requested in the original offer.
According to Donald Sarley, chief appraiser of Advanced Research & Appraisal, “Be sure to include anything you believe would enhance the value and appeal to a typical buyer. . . In a seller’s market, a buyer will normally pay a premium for a good, clean property with nice upgrades. But in a buyer’s market, the upgrades may not add as much value, because there are so many choices in the market.”
Another important point made by Sarley — “Special considerations may affect a transaction, such as a family relationship between the buyer and seller . . . or a specific buyer might have been willing to pay a price higher than the market value. It’s the task of the real estate appraiser to judge whether the price in a transaction is indicative of the market value.” (Florida Realtor, September 2010, pp 17).
It is important that your Real Estate agent is familiar with the neighborhood values. Sometimes the lender will hire an appraiser who is unfamiliar with the subject property’s area. The agent might discuss or challenge the appraisal and make suggestions to the appraiser so that he may re-evaluate the subject property.
The more information that is in the hands of the appraiser, the better s/he can meet the challenges of the appraisal in this tough market. Having to sift through data from regular sales, short sales, and foreclosures, regardless of status, the appraiser’s job is daunting and perplexing.
It is important that I am flexible, amenable, and informative when it comes to working with the appraiser.
I optimistically seek a favorable outcome!