Whether you are buying or selling a home, it can be a very stressful time and one of my goals is to provide a service that makes the experience as stress-free and transparent as possible. About a year ago, I received a phone call from a homeowner in the Edison Park neighborhood of Chicago who wanted to get an appraisal to help them determine a price to list their home. During the conversation he asked, “Why should I hire you?” It caught me off guard because usually the first question I get is, “How much do you charge for an appraisal?” (I won’t get into that here, but I can promise you that it is not a good idea to hire your appraiser based solely on fee. See my blog article, “The Cheapest Appraiser” for the reasons why.) His question really made me think about what separates me from other appraisers in my market area. I started thinking about the feedback I most often get from clients and what’s most important to me when it comes to how other people perceive me and my company.
I think it is important to state that there are certain fundamental characteristics that every good appraiser should have (ie. experience, local knowledge, education, attention to detail, standards and ethics, etc). While I possess all of those characteristics, I know based on what my clients have said time and time again that I provide something else that is invaluable to them. When I’m hired by a homeowner, most of time they are looking to either determine a price to list their home (FSBO or just needing a second opinion from an unbiased third party other than their Realtor) or determine fair market value when purchasing a home to make sure they are not overpaying. Most appraisers will come out and measure your home, take some pictures, and ask a few questions. Then several days later you get an email with a PDF of an appraisal report. You‘re anxious to see what value the appraiser has come up with and you open the report only to find that you have no idea what you’re looking at. Most appraisal reports are 30+ pages in length and filled with appraisal jargon and lending terms that the typical homeowner just doesn’t understand.
That’s why it is important to take a different approach to these types of “non-lender” assignments. All of my appraisals involve two Consultations (one during the initial inspection and another after the appraisal report has been completed). During the first consultation I interview the homeowner to find out what their expectations are and explain how the appraisal process works. We talk about the house they are buying or selling, and I point out any items of concern I see during the inspection. Once the report has been completed, I typically have the second consultation in which I come back to the house and we go over the report together to discuss the following:
We explain how the report is laid out and where to find the most important information.
- We go through the charts and graphs that I have added to the report and I explain the current market conditions and property value trends in their neighborhood and how that affected my value conclusion. These charts not only show an overall view of the median sales price trends, but also give an indication of of the amount of housing supply on the market. I explain what an undersupply or oversupply of housing stock could mean for the value of your home.
- We go through the sales I used and I point out the differences in condition or quality of construction and which features are more desirable and why. I then show you the listings in the area that they would be competing against and what that means for your property. We also go over where these comparables are located on the map and discuss any location adjustments that were deemed necessary.
- And maybe most importantly, I ask you if you have any questions. As you already know, buying or selling a home can be a stressful proposition, and I want to make sure that the appraisal/valuation portion of the process is as stress-free and easily understood as possible.
This is the portion of the appraisal process that my clients appreciate the most. By taking that extra time to explain the report and answer any and all of their questions, I ensure that they are satisfied. I want to make sure that the appraisal/valuation portion of the process is as stress-free and easily understood as possible. In working with homeowners, I have found that this is my favorite part of the business. It really allows me to help through this process is an easily understood way. This is a much different world than the lender/refinance world where rules and regulations get in the way of who you can talk to and what you can discuss. At a time when everyone is in a hurry to move on to the next job, I think it is important that you find someone who will take their time and make sure all of your questions have been answered.