I taught a class this morning to a group of real estate agent entitled “Getting It to Appraise”. The subject, obviously, was strategies for getting your listings to appraise in a market where buyers, lenders and appraisers are often fear-based and/or predatory in their assessments of what a home is worth.
On this subject, there is one caveat that must be declared up-front: when making representations to an appraiser (or a buyer, or anyone else), all data must be factual. There is to be no cheating, no distorting of information and no known misrepresentations of fact.
As listing agents, it is our job to provide as much concrete, accurate and factually-supported data as possible which protects and defends the interests of our clients.
Having said that, here is a list of strategies one can use in supporting a home’s value in today’s market:
• Current comparable sales from the MLS
• Old comps from the MLS (can’t necessarily be used, but does support argument for historical value baselines)
• Comps from public records not appearing the MLS (FSBO’s and new builds)
• County assessor records
• List of upgrades and updates
• Previous appraisals (again, won’t necessarily be used, but does provide historical value baseline data)
• Neighboring appraisals (a “hidden gem” if you are willing to ask neighbors if they have refinanced or had their homes appraised in the past six months)
• Rental surveys (establishes rental value, which can influence market value)
I often refer to appraisal data as “above the line” or “below the line”. What that means is that some data supports value at or above the contract price you are looking to support. That is called “above the line” data.
Conversely, there is also data that can undermine your price – that is called “below the line” data.
The name of the game is to provide as much factual, honest, above the line data you can to support your price. That, in my opinion, is your job as a listing agent and a fiduciary to your seller.
The old “4P” approach to selling a home – Put a sign in the front yard, Put a lockbox on it, Put it in the the MLS, and Pray for a buyer – simply isn’t enough.
It’s hard work to list a home, hard work to negotiate a contract, hard work to support an appraisal and hard work to close the deal. That’s why one-quarter of all contracts fail to close, and why nearly one-third of the agents in Colorado have quit the business in the past three years.
There is, however, no point or purpose in complaining. Shut up and do your job. And do it well. That’s real estate in 2011.
