I want to share my experience from a recent listing appraisal and discuss my approach to these appraisals. I was hired by a seller who was selling their home as a For Sale By Owner (FSBO). FSBOs are an excellent source of business; if they’re not hiring an agent, they should at least hire an appraiser to avoid leaving money on the table. We’ve all seen the buying side of appraisals for lenders and noticed how much money sellers lose trying to avoid the 6% commission—saving that commission but listing $50,000 below market value.
On this assignment, the seller found me on Google. How do I know this? I make it a point to ask on every assignment, either during our phone conversation or through a question on the last page of my engagement letter. This is important because it helps me understand which marketing efforts are effective. If a seller mentions they were referred by someone, I always reach out to that person to send a thank-you message or card, expressing my appreciation for the referral.
For all listing appraisals, I evaluate the property from a potential buyer’s perspective and provide recommendations to the seller on necessary repairs or changes to make before showing the property. This is crucial because a house needs to show well in addition to being priced correctly.
On this listing appraisal, while observing the exterior, I noticed several issues: the front porch needed painting, the lawn was dead, and the windows and sides of the house were filled with cobwebs and needed pressure cleaning. Inside, there were sections of the ceiling that were yellow from an old smoke detector, dehumidifiers draining in the sink, and a wine cooler awkwardly placed in the middle of the seating area at the breakfast bar. I shared my feedback with the seller. In the past, I’ve even advised sellers to rent a POD to clear out personal items when the clutter is overwhelming. I am always honest with the seller because that’s what they are paying for. Additionally, I provide a list of recommendations in my report and email to them.
This house also had painted concrete floors throughout, except in the bathrooms. Given the $1.5 million price range, I was brutally honest with the seller and told him that I didn’t know if buyers in this price range would love or hate these floors. Having appraised over 10,000 homes, I could only recall one other with painted concrete floors, indicating this feature is not typical. I advised the seller to be prepared to either offer a credit for new flooring or install new flooring to avoid selling below market value. In the appraisal, I treated the painted floors as if they were simply dated flooring.
When doing a listing appraisal, appraisers need to be open and honest with sellers and provide candid feedback. While this goes above and beyond providing value, it’s what we are hired to do. Offering recommendations and suggesting minor changes can ultimately help sellers achieve the highest possible price for their home, which is their goal. And yes, I want the seller to get the highest price—not because of bias, but because it reflects a successful and thorough appraisal on listings.
Discover more about listing appraisals and other non-lender sources of business by joining ReferAppraisals.com. In this micro lesson, I’ll reveal the top sources for listing appraisals and provide you with an email template to send to sellers along with the appraisal.
Dan Lindeman
Appraisal Referral Network
ReferAppraisals.com
