Ask the Right Appraisal Questions and Save Money

Appraisers are used to taking appraisal assignment orders and most orders for appraisals are made by mortgage companies or banks over the phone. Appraisers are told what property the client wants valued, the purpose for the report, the fee and the time frame for completion. Most bank and mortgage company clients don't ask appraisers a lot of questions, they know what is going on in the market, and they simply need a value opinion on a specific property.

Calls from owners or other individuals regarding an appraisal assignment are different, and at times appraisers are asked about the market. Talking about general market trends is usually not a problem, it does not change the appraisal process or the opinion that an appraiser will conclude after their research and analyses. Some appraisers, however, do not want a client to attempt to bias them, or attempt to influence them in one direction or another.

When an individual / client does not ask about general property trends in their own neighborhood, it is usually assumed that they already have knowledge of them, or that the trends do not make a difference.

The problem with little or no initial communication occuring between an appraiser and his client is that some assignments get completed that are not useful. For example, if I had known that the expectation of a recent client of mine was a higher price for their home in 2008, after it had been appraised by another appraiser in 2007, I would rather have told them that a conclusion like that was unreasonable rathan than take their money and have them complain that the report was of no use to them.

At times it is difficult for appraisers to make generalizations and tell a potential client that the market has moved upward or downward over time in a specific neighborhood. Even though prices in the overall Las Vegas real estate market have moved dramatically downward in the last year, you can see by taking a visit to DataQuick's DQNews site at http://www.dqnews.com that there are significant differences in the percentage of decrease within each of the Las Vegas zip code areas.

Appraisal questions also arise about commercial properties, and I am often asked, "can you provide comparable sales information?" Appraisers have retreated from providing comparable sales information to lenders and to the public on residential homes in recent years, but in my experience they never provided "comps" on commercial properties. Selecting comparable sales for commercial appraisals is a difficult task, it's not like you can take a look at a "model match" with the same builder, same sized building and same construction year that recently sold down the street. There is a great deal of variability in comparable commercial property sales, not to mention the fact that commercial properties are generally appraised based on their income production.

In my opinion, it is better to ask an appraiser questions that he may or may not be able to answer rather than wait until a report is completed to find out that he wasted precious time and you wasted money. Most appraisers will answer your questions without charging you for their time if you are a potential customer and you are not calling to influence them.