An appraiser’s role is to be an independent third party who does not advocate, represent or serve any party’s interest. An agent’s role is to advocate, represent and act in the best interests of the client. In spite of these differences, appraisers and agents do have plenty in common: ethics, integrity, cooperation, standards of practice, professional service and values.
As a broker or agent, how should you communicate with the appraiser? Let’s take a look at the do’s and don’ts of working with appraisers. When you’re done reading, take a short quiz of common questions to see how well you know how to work with an appraiser!
What to Provide the Appraiser
As applicable and available, providing the following helps the appraiser perform their function:
- Helpful, relevant information
- A copy of the complete sales contract
- A copy of home inspection
- Copy of listing information
- Listing history:
- When originally listed and price
- Any reductions and when
- DOM (days-on-market)
- If this is first time listed ever or if you know it’s been listed in the past
- Date of purchase agreement
- Financing considerations – is the seller paying points/closing costs for buyer
- Applicable comparable sales information, including DOM
- Title policy or abstract copies that describe any encroachments or easements
- Reports on termites, septic systems, wells, etc.
- Written property agreements such as maintenance agreements for shared driveways, etc.
What Not to Provide the Appraiser
Providing any of the following hinders the appraiser from doing their job independently and without serving any party’s interest. If this information is provided to an appraiser, the appraiser is required to turn down the assignment per USPAP (Uniform Standards of Professional Appraisal Practice).
- The owner’s estimate or opinion of value
- The desired value for the property based on the amount of the loan/mortgage
- Intimidations or bribes: do not promise work or threaten to take it away
- Requests for comparable sales/comp checks prior to ordering an appraisal. This is a violation of USPAP. An appraiser can provide ALL sales in an area, but as soon as the appraiser provides sales that are comparable to a subject property, they are doing an appraisal and are subject to all USPAP requirements.
Best Practices for a Broker/Agent
Aside from the do’s and don’ts, there are some general best practices a broker/agent can follow to facilitate a smooth appraisal.
- The agent should be the one who lets appraiser into the property.
- The agent should be a good resource. Good appraisals rely on good information.
- Do not boycott or publicly disparage an appraiser.
- Be professional and courteous.
- Return calls promptly from appraisers requesting information about a sale. Confirmation of sales is needed in order to determine whether a sale is a good comparable or not.
What’s Needed: A Broker Price Opinion or an Appraisal?
The main difference between a broker price opinion (BPO) and an appraisal is that an appraisal provides an opinion of value, while a BPO provides a recommended list or sale price. A BPO is completed by a REALTOR® and clearly states that it is not an appraisal. Similar to an appraiser, the REALTOR® needs to be geographically and property competent to complete the BPO. The REALTOR® and appraiser ask similar questions about the property, but a BPO, unlike an appraisal, does not have to conform to USPAP requirements.
About the Author
Terri Jensen, ALC, is your Minnesota land resource: real estate, auction, appraisal, consulting, 1031 exchange. Property types: ag land; hunting/rec land; development land – residential, lakeshore, commercial, institutional; land-in-transition; rural residential… Of 18,000+ REALTORS in Minnesota, Terri is one of only 14 to earn the ALC (Accredited Land Consultant) designation. Rely on Terri’s education, experience and expertise to assist with your land situation or need! Licensed Broker in MN & N/E; Licensed Appraiser & Auctioneer in MN.