Friday, June 1, 2012

Selling? You might get your own appraisal.


If you’re preparing to list your home for sale in this uncertain market, you might want to hire an appraiser to help you set the price. With fewer nearby sales to help determine the value – and many of those foreclosures and short sales – that elusive number is more elusive than ever.

Increasingly, real estate agents are turning to appraisers. “The (price) fluctuations have been mind-boggling,” said appraiser Steven Maher. “We’re finding that the Realtor is calling us to help them reach a listing price.”
Or, alas, to help persuade a hopeful seller that the price needs to come down.

But know this: If you hire an appraiser, it’s for your information only. Any lender still will hire its own appraiser. “You’re free to hire anyone you see fit,” Maher said. “This has nothing to do with the loan.”
These days, appraisers who work for lenders are notorious for lowballing valuations. The lender’s appraisal might be lower than the one you commissioned. Appraisals are snapshots, and market conditions change, but Maher said any appraiser you hire ought to be able to justify his calculations.

Maher, who’s with Steven L. Maher & Associates, also is an instructor at the Mingle School of Real Estate, the official education arm of the regional Realtor association.

When a reader asked whether he should hire an appraiser before listing his home in the University area, I knew that the answer would be different than it would have been a few years ago.

The appraisal industry has been battered. Not only by the downturn, but also by changes to regulations. Appraisers do most of their work for lenders, of course, but now they’re hired by appraisal management companies, or AMCs, which have slashed fees. Maher said appraisers’ incomes have tumbled 50 percent and the number of appraisers has fallen by more than one-third.

Because the landscape has changed so much, Maher formed a new company, Market Value Professionals, to work for agents and homeowners. It doesn’t serve lenders. It accounts for 5 or 6 percent of business now, he said, but that’s growing.

And yes, Maher said, the homeowner might want to hire an appraiser.

Finding one is tougher than it should be, because of the new regulations. “We cannot market ourselves to lenders,” he said. “There’s a firewall between appraisers and loan officers. We cannot do any type of marketing whatsoever.

You can look for an appraiser online, or perhaps on the website of the North Carolina appraisal board (www.ncappraisalboard.org).

But a better approach, Maher said, is to work through your real estate agent.

As always, interview three potential agents. “If you don’t know three, drive around your neighborhood and get the phone numbers off signs. Have them come in and give listing presentations. They’re going to give you estimated market value. If you feel uncertain about that, that’s when you call us.”

You’ll pay an appraiser about $375 for a full appraisal. That includes an inspection of the property, and a drawing of the floor plan. If you’re just setting the listing price, you can get what Maher calls a “desktop” appraisal for $150. It’s based on information from you and from the tax office.

To reach a suggested listing price, the appraiser then factors in recent sales, or “comparables,” along with active listings, negotiating spread, average days on market and the like.

The listing price might not match the market value, Maher said. If you want to sell quickly, for instance, you’ll need to set the price at or below the prices of competing homes.
By Allen Norwood




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