All too often, home sellers find themselves losing sleep over an unanticipated home valuation. An estimate of your home’s value can feel insulting, ingenuine, and – worst of all – too low, leading to animosity toward your appraiser. It’s easy to see where the frustration arises, and the reputation that appraisers have acquired since the market crash in the late 2000s certainly does no good to the situation. But your appraisal is as integral to the real estate process as anyone, and it’s best to have your appraiser as much on the same page as possible.
Of course, the relationship between a seller and an appraiser is far less personal than that of many other components of the process. One important thing that doesn’t always come across to sellers is that the appraiser doesn’t work for you or your realtor – they work for the bank. As such, since the banks have to ensure the avoidance of the sorts of raw deals that led to the housing crash, appraisers are now playing defense. In general, paperwork for a single appraisal can reach 30 pages. The impersonal feeling you can get in these sorts of transaction begins to make a lot more sense when you think of the kind of leg work these officials must maneuver through.
And on top of that, the appraiser may well never even become a physical acquaintance. Increasingly, since the Dodd-Frank reforms were put in place at the end of the housing crisis, appraisal management companies (or AMCs) are an outsourced service. That can mean that the person who’s assigned to value your home has never even stepped foot in your city – or even state. In the case of areas like Columbia, where local economics are not nationally covered but crucial to the local real estate market, this can lead to headaches quickly.
If that headache is already starting to form, just imagine the way the appraisers feel. First of all, there simply aren’t enough of them. A report by the Appraisal Institute showed a decline of almost 10% in ranks between 2011 and 2015. The reason for this might well have to do with the job requirements; just becoming an appraisal trainee requires 75 hours of classroom time, with another 150 hours required to qualify for a license. Perhaps the most frustrating part of the job is the pay – some appraisers only earn about $150 per job after the AMCs take their cut. For a job that’s often met with such vitriol, the pay hardly seems enough; that said, it’s a bit more appealing than losing your career entirely to drones that are beginning to be implemented as a less costly replacement.
With all of that in mind, let’s detail a few ways you can work with your appraiser without having to feel defensive:
Remember the difference between market value and investor value
Your home value may drastically differ depending on who’s on the other end of the sale. An investor looking to use your property to build or expand will see it very differently than an objective appraiser looking at comparables. As such, if your situation might call for it, expect different opinions on value. With some of the other considerations in mind, don’t forget – an appraiser’s valuation might be different than you’d expect, but it will be the legal standard in your transaction.
Consider your legal rights
All appraisals are required by federal law to be shared with consumers who request it in writing. That can be your secret weapon in the case of a particularly questionable conclusion. If you feel that your home is undervalued with that evidence, you can file a complaint with your local state regulatory agency. That said, there are still not federal complaint structures in place here, so don’t treat this as a guaranteed ability to change an appraiser on a whim. It’s best to think of this legal path as an asset on your end with which to communicate with the appraiser from somewhat of a level ground. And speaking of communicating…
Communicate – don’t pressure
The situation can be high-stress on all sides, and adding your own cool head can make an enormous difference. Don’t be afraid to reach out – just do so in a non-confrontational manner. On the flip side of that coin, remember that an appraiser is not the same thing as a home inspector. They aren’t working for you – they’re doing a federally mandated job, and they deserve that sort of consideration in terms of how you work with them.