Agent, Appraiser: How Much Can We Talk?

November 12, 2013

One big misunderstanding between real estate agents and appraisers centers on how, when, and what they can communicate about the valuation process, said panelists at a Valuation Forum on Saturday at the 2013 REALTORS® Conference & Expo.

While federal laws dictate those communications, appraisers and agents don’t have to be estranged during a transaction.

“There’s a window of opportunity when agents and appraisers can talk, but once the appraisal has been developed and sent to the client, that window is closed,” said Vic Knight, appraiser at Chapel Hill Appraisals in Raleigh, N.C.

Before that point, agents have an opportunity to provide appraisers with supporting information. For example, listing agents can be present for the appraisal and be on hand to clarify any items necessary, such as a remodeled kitchen. They can also provide an appraisal package upfront that includes the purchase contract and comparables that demonstrate how the listing agent arrived at the price.

Because of the number of off-MLS listings — or pocket listings — in many markets, agents may have valuable information that appraisers can’t find on the MLS, said John Anderson, a real estate agent with Twin Oaks Realty Inc. in Minneapolis. “Many appraisers are usually open to the information that agents bring within the appraisal package.”

Another issue: Although home prices are picking up in many markets, inventory shortages are limiting comparables, leading to appraisals lower than the contract price. Home owners may be able to appeal a valuation if they can prove that there are errors in the report, pertinent comparables are missing, or the appraiser lacks geographic competency, panelists said.

—Melissa Tracey, REALTOR® Magazine

Read more:

Low Appraisal Killing a Deal? Here's What to Do
Appraisals: Still a Thorn in Your Side
Appraisals Catching Up to Rising Home Values