Well, you heard him say it plain as day - Realtors and Appraisers need to start talking!
Appraisals are key to real estate transactions in every market, Little Rock is no exception. In ALMOST every real estate transaction, there comes a time for the lender to order an appraisal and make sure that the loan they are extending on the property, is acceptable with relation to the value of the asset it is tied to. They do this by deferring to a market expert, an appraiser, who is trained, educated and licensed to provide opinions of value on residential property in an effort to promote and maintain the public’s trust.
Rick, a bad-ass appraiser with no tolerance for misinformation, shared with us that lenders and appraisers have a relationship in that the lender engages him to perform the appraisal and therefore is his only client. His responsibility is to answer the question within the scope of work they agree on, essentially leaving the Realtor and the homeowner to fill in the blanks. This can lead to a lot of misunderstanding, as Realtors and appraisers are trained differently - they have separate standards and as I have found moving over to the real estate side, they look at property in an entirely different manner.
I worked under Rick for a while, and I learned a lot. When I go into a house now to show it to a buyer, I instantly notice what the updates are and what they mean to the overall quality and condition of the home. I immediately check to see if the measurements are different than what the county reports them to be, in an effort to ensure the feet measured are the feet paid for. My view on property as an agent is considerate of market trends, colors that are popular, new fun things like sliding barn doors and glowing outdoor countertops... They are entirely different items we focus on. These are the stark differences between the two professions that I wanted to bring to light having Rick share his knowledge with us on the podcast. It meant a lot to me in my career, and really shaped the way I do business. I hope he added as much value to you as possible in 15 minutes.
We also talked about the dreaded issue of square footage. The links mentioned are listed at the end of the blog, agents do yourselves and your sellers a favor and read up on these standards! It is a wealth of knowledge and can save you a lot of time and trouble, learning to measure your listings. Add value to your clients, and pick up this skill.
Investors, home buyers, anyone you know who is about to purchase a home - It is NOT unreasonable to hire an appraiser to consult, at the very least, on your purchases. Engage them for a full appraisal if you must, but to not investigate in your investment just doesn’t make sense.
Here on the BLOCKtalk and the BLOCKblog, it is my goal to impart the knowledge to you that we are missing not just in the real estate community, but in our community in general. It turns out that being educated about something you didn’t understand before, can really open your eyes to seeing things in a different light. I challenge you to learn something new this week and definitely check out the links below to learn more about standard measurements of living area, and guidelines appraisers check for when appraising properties to be insured on an FHA loan. (This will help you agents identify repairs that will be needed before closing - super helpful!)
Until next time, enjoy your weekend and catch us on the podcast Tuesday when we learn about the world of residential mortgage lending with none other than Jake Arey of Eagle Bank Mortgage.