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Real estate agents are often caught in the middle when an appraisal doesn’t go well. After all, the work is performed on behalf of the lender. Appraisals are carried out not for the seller to validate the property’s sale price, but for the lender to establish the home’s value  as collateral. The lender uses the appraisal as the basis for deciding how much to lend, or whether to lend at all.

An agent has the ability to challenge an appraisal on behalf of the seller, but contesting an appraisal takes more time that the prospective buyer might have. If the appraisal process takes too long on a particular property, it isn’t unusual for the buyer to nix the deal and look elsewhere, leaving the seller in the unenviable position of deciding whether to go along with a lowball appraisal and lower the asking price.

“Appraisals are an art, not a science,” Johnson says. “You can have two different appraisers look at the same property and come up with two different values based on the comps they use and the way they look at the conditions of the property itself. I think when the crash initially happened, a lot of appraisers were concerned that their work was going to be so tightly reviewed that they got a tad conservative. I think that’s started to ease up, too. The appraisers weren’t in this by themselves. They weren’t the ones causing houses to be upside down.”

An appraisal’s values are established by looking at how other homes in the immediate area were priced. If there are no recent comparables nearby for the appraiser to use, they have to broaden their search, and it is entirely possible for an appraiser to use comps in dramatically different neighborhoods in the valuation of a home – which can lead to some back and forth between the appraiser and the underwriter, Seeberg explains.

“Appraisers sometimes have to go back to a report two or three times just to make sure that everything is factually accurate,” Seeberg says. “If an underwriter has a question, they’re going to go back to the appraiser and maybe ask for more comps or for a more direct explanation on things, so the appraisers really are earning their fees with each report. I think most appraisers that are left in the business really want to be there. By and large, they probably are good at what they do and like what they do.”

There are things that can be done to smooth the process. Fred would like to see standardization in how appraisal reports are presented, so that information is easy to find and interpret.

“Some of these reports are easy to read because they’re clean, and on the first page, they’ll give the summary followed by the supporting information,” Fred says. “For me, that’s a perfect report. With others, you get a list of issues and recommendations, and you have to find a way through it. Then, they have others that just have check marks, and you have to figure out what that means.”

Seeberg would like to see more appraisers listen to homeowners and realize that the property is likely their greatest material asset. They have pride of place and deserve a fair and accurate report.

“Homeowners want an appraiser to listen and take into account what they’ve done,” Seeberg says. “They don’t want an appraiser to just be in their house for a minute and then be done with it, but to really do a solid, thorough report that looks at what upgrades have been done and what needs to be done to improve the property. They may not make a big difference in real estate listings, but it’s good to remember that your customer is the person you’re doing the appraisal for, and that you need to do it fairly and justly.”

To Hobbs, time is the enemy when it comes to putting together a solid appraisal report. Lenders and Realtors often want the paperwork to be completed before the appraiser can do a thorough job of getting to know the property and the neighborhood. Hobbs believes in slowing the client’s expectations; that way, appraisers have time to confirm their research with real estate professionals.

“When I started, you’d get an appraisal request and turn it in five days later,” Hobbs says.  “Now, we have clients who want the report 48 hours after we see the property. We don’t really have time to do any research. You can use the MLS and you might get one or two calls in to a Realtor, and if you’re lucky, you might get to talk to them before you send in your report. The appraiser is basing more of the report on their own experience and the MLS, because they aren’t getting sufficient time to talk to other real estate professionals.” CA