Play it as it Lays

So with all those changes and moving parts, what can agents do, if anything, to better work with the appraisal system? For Stafford, the first step is understanding what appraisals actually are – and perhaps more importantly, what they are not.

“The appraisal is not done for the consumer to validate the sales price; it’s done for the lender to validate the collateral,” Stafford says. “It’s there for the lender to determine what they want to lend and how they want to lend, based on the collateral as it sits. And what determines that value, that collateral, is what else has been selling and what are those closed loan comparables in the marketplace.”

Appraisals, Stafford says, provide the best evaluation of a property from the lending perspective, not the sales perspective, and even the tell-tale signs of a property’s apparent value – multiple-offer situations, for instance – do not guarantee that a property will appraise at the desired price; therefore, agents should attend appraisals equipped not with their emotional connection to a property, but rather, the data that supports their evaluation within the framework of the appraisal.

Sweeney recommends that agents view the appraisal process through the looking glass, and rather than blame appraisers for low evaluations, ensure that all of their bases are covered in the lead up to the appraisal.

“It’s really easy to bash the appraiser, because we’re a disinterested third party; we come into the place, we leave, we’re in there for a half hour, two-and-a-half hours. During that time, what is the agent doing?” Sweeney says. “Most agents have spent a lot of time trying to get a listing, and they should know this property pretty darn well; they should be able to talk adequately and thoroughly and correctly about the property and the association, if it’s a condominium or cooperative. An agent should know, just because a condo and a co-op look the same, we cannot use them as comps.”

Sweeney admits she encounters mistakes on the agent’s behalf, sometimes on the most fundamental level of the property – its listing sheet, which can cause numerous headaches for the appraiser.

“I can count on one hand how many agents write a good listing sheet,” she says. “We have to verify all the data that appears on a listing sheet. So from items such as coordinates of where a property is located to the property index number. Do you know how many pin numbers are incorrect on a listing sheet? This is a legal document. We have to keep it in our work file. So if a real estate agent does not take the time, care and effort to produce a credible listing sheet, we have got to verify all of that information. And it takes time, it takes a ridiculous amount of time for us to go back and correct a mistake.”