Navigating Appraisals

Posted by Home Center Concierge on Friday, May 23rd, 2014 at 12:45pm.

Answers to Your Questions Regarding Appraisals

As a listing agent, one of my primary obligations to a seller is to do everything within my ability to assist them in getting the proper value for their home.  Unfortunately, there are times when appraisers may not know a particular market well.  While this is not the norm, it does happen.  We make it a habit to communicate with the appraiser and to provide them data with respect to the comparable sales we used in pricing the home.  We will also ask the seller for a list of all upgrades, etc to evidence the details regarding the home.  When possible, we will deliver this information to the appraiser in person to establish a good report with him or her.  Below are a few frequently asked questions regarding appraisals.

Who pays the appraiser?
The mortgage lender who hired the appraiser.

What does an AMC do?
An appraisal management company (AMC) manages the appraisal process and orders the appraisal on behalf of the lender. The lender may order the appraisal through an AMC or directly from an appraiser.

Who can talk to the appraiser?
Anyone with interest in the transaction—including the real estate agents and their clients—is allowed to communicate with the appraiser. 

How can the agents or their clients help the process?
Collect any relevant documents (surveys, deeds, HOA documents, inspection reports, etc.) in advance and have them available at the property for the appraiser to review. Real estate agents or their clients can also meet the appraiser at the property to answer any questions about the property or neighborhood. Then, step back and give the appraiser time and space to work.

Why does the appraiser get a copy of the sales contract?
Fannie Mae and Freddie Mac require an appraiser to analyze the sales contract and confirm analysis in the appraisal report. The appraiser will:

  • Review the terms of the contract
  • Compare the contract terms with what’s typical in the market
  • Verify that the seller is the owner of public record.
(It is not uncommon for an appraiser's value to come in right at or just above the contract price.  Don't be surprised if this happens.  Mortgage underwriters often look unfavorably at an appraisal that is much higher than the negotiated contract price.)
 

What guidelines does the appraiser follow?
The Uniform Standards of Professional Appraisal Practice, which are incorporated into Texas law and Texas Appraiser Licensing and Certification Board rules, and any other requirements from the mortgage lender.

Can the appraisal report be amended?
If you think there are errors in the report or you want the appraiser to consider additional information, contact the appraiser’s client (the lender) in writing. An appraiser can only discuss the report with the appraiser’s client or parties designated by the appraiser's client.

What if the appraiser isn’t familiar with our market?
If you suspect that an appraiser isn’t competent to appraise property in your area, contact the lender that ordered the appraisal.

Visit Realtor.org/Appraisal to download a guide to understanding residential appraisals and other materials to share with your clients. You can also find information about appraisers from the TALCB, the state agency that regulates appraisers.

By Sammy Gardner

Leave a Comment