David S. Bunton is President and chief operating officer of The Appraisal Foundation since 1990. He is a respected leader in the valuation world in the United States and abroad. Prior to joining The Appraisal Foundation, David served as a staff member for twelve years in the U.S. House of Representatives and the United States Senate.
Dos and Don'ts of Appraiser Communication
Forget the rumors that you have to keep silent. But that doesn’t mean your communications still can’t get you in trouble.
August 17, 2015
Real estate professionals and appraisers both play an essential role in the process of buying or selling a home. It is critical that these two parties work together to ensure that an appraiser provides an independent, impartial, and objective opinion of value that accurately reflects the marketplace. However, we often hear from brokers and agents that they’re unaware of how much interaction they may have with an appraiser, what they’re allowed to say, and what information they can provide. Some incorrectly believe that they are prohibited from speaking to an appraiser at all.
In reality, qualified and competent appraisers welcome any information that helps them do their job. In fact, we at The Appraisal Foundation encourage brokers to actively communicate with appraisers in a professional and productive manner. Real estate professionals should feel empowered to supply relevant materials, including the terms of the sale, applicable comparable sales, and any evidence of notable renovations done to a home that might affect its value. Additional useful data could include records that categorize maintenance and upkeep done to a home, such as regular inspections or replacements of major appliances. These materials will help an appraiser arrive at an opinion of value that accurately reflects the market value of a home.
However, real estate professionals are legally barred from any communication with an appraiser that is intended to unduly influence the outcome of the appraisal. While it might be obvious that coercing an appraiser is off-limits, it is always a good idea for agents and brokers to make sure an appraiser or regulator couldn’t interpret their communications as an attempt to improperly influence an appraisal. An example of improper communication would be asking an appraiser to provide a valuation that matches the asking price of a particular home. Another example could be telling an appraiser he or she will not receive future assignments if the appraisal does not facilitate a transaction.
And communication between appraisers and real estate professionals doesn’t have a specific cut-off point, either. A broker or agent who has questions or concerns about an appraiser’s final report may take formal steps to communicate those concerns and ask for reconsideration of the appraisal report. For instance, a broker can submit additional comparable sales through the lending institution for the appraiser to consider. A broker can also request that the appraiser correct any errors in the report, such as the miscalculation of the number of bedrooms in a home or the total square footage. The appraiser can be asked to provide additional detail explaining how he or she arrived at certain conclusions and the ultimate opinion of value. However, a broker cannot dispute an appraisal simply because he or she is not pleased with the outcome.
At the most basic level, it’s important for real estate professionals to recognize that it’s the duty of competent and qualified appraisers to provide credible opinions of value for homes. Any information that assists an appraiser in that objective is not only allowed, it is welcomed.
President of The Appraisal Foundation