How Homeowners Win When They DownsizeDownsizing has long been a popular option when homeowners reach retirement age. But there are plenty of other life changes that could make downsizing worthwhile.
2 Appraisals + 1 NEW to Be-Aware of
Dated: April 19 2023
This last week one of my newer agents received a call from an “appraiser” out of Dallas wanting free data from our MLS on one of our own listings. I phoned the appraiser to inquire about a conflict of interest to confirm that was our brokerage’s listing and we represented the seller. The gentleman confirmed that he did not have access to our MLS to do his own research, he was not familar with our market, and had only driven by the property.
I promptly called the buyer’s agent to inform them that their buyer was not getting a fair appraisal. FURTHER, if the appraisal value came in lower than the contracted sales price , then this could hurt the seller. I demanded the lender contact the hired third party Appraisal management Company to require a valuation from a competent appraiser.
It’s no surprise to recent home buyers that the lender’s appraisal process can be lengthy, and disastrous.
First - the LENDER wants an appraisal of the home you are purchasing because they want to ensure the money they are loaning you is covered by the value of the home should you default. This helps ensure they could recover monies lent by selling the home themselves by knowing the sales price of the home.
In some instances the lender will WAIVE the full appraisal process (as we know it) in lieu of a DESKTOP APPRAISAL and a large Down Payment from the buyer. A desk top appraisal is when the bank performs online research to gather as much available information as is available to determine an approximate confirmation of the value. They do not visit the property in person to verify its condition. This type of appraisal is also more common with local banks, and properties that are in planned developments with cookie cutter homes.
Desk top appraisals are not the norm because they are a greater risk for the lender. Yet, the number of licensed and experienced appraisers is declining rapidly due, mostly, to the 2 year unpaid apprenticeship required for this job.
ENTER the Hybrid Appraisal! The hybrid appraisal is a new type of property evaluation that requires a licensed appraiser to do the desk work, but an Independent Data Collector can do the field work - the actual on site property inspection that verifies that the home doesn’t have wood rot, or peeling paint, or broken glass, or other safety hazards or repairs that cause home owners to be overwhelmed by repair expenses that cause them to default on the property.
It sounds great until you consider that these Independent Data Collectors may not be trained, had background checks, unbiased third parties, know your local market. Just Exactly like the story I began this rant with.
Here are the lessons:
1. Communicate to your lender that a full appraisal is required - that you will not accept a desktop or hybrid appraisal
2. Inform the listing agent not to accept a Data Collection Assignment on their own listings
3. Ask that the buyer’s agent or listing agent accompany the appraiser or data collector at the property inspection
Realize this may delay the closing process - but knowing and communicating clearly, in advance, can help make for a successful real estate transaction for buyers and sellers.
As always, I'd love for you to reach out with any real estate questions! Thanks for watching!
Cristi McGowan is a Native Wacoan with deep roots in real estate as most of her mother’s family were, and still, are Brokers. Cristi came to appreciate the quality of life that Waco offers, especial....
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This last week one of my newer agents received a call from an “appraiser” out of Dallas wanting free data from our MLS on one of our own listings. I phoned the appraiser to inquire about