APPRAISER WORKSHOP
Valuation Visions
with Derrick Carbon
posted April 10th, 2024
For internal use only
April 10, 2024
Summary:
This class offered an in-depth exploration of the nuanced role of appraisers in the real estate market, emphasizing the critical importance of accurate property valuations. Through expert insights provided by Derek Carbin, a seasoned real estate appraiser, attendees gained a comprehensive understanding of various factors influencing property values, including market trends, property size, and price per square foot. The session also delved into the challenges posed by non-permitted structures and the evolving landscape of appraising tools, underscoring the vital role of accurate measurements, permits, and professional relationships in fostering business growth within the real estate sector.
Takeaways:
Understanding Property Value:
An appraiser's role is crucial in determining property values, considering factors such as price per square foot, market trends, and property size.
Accuracy is Key:
The importance of accurate measurements, securing proper permits, and fostering strong relationships within the real estate industry cannot be overstated.
Challenges and Evolution:
Non-permitted structures pose significant challenges, highlighting the need for diligence in this area. Meanwhile, the tools and methodologies used in appraising are continuously evolving, necessitating ongoing education and adaptation.
Action Steps:
Invest in Professional Development:
Stay abreast of the latest tools and techniques in property appraisal by attending workshops and training sessions, ensuring your methods remain current and effective.Foster Industry Relationships:
Cultivate and maintain strong professional relationships with appraisers, lenders, and other real estate agents. Such connections can be invaluable, particularly when navigating challenges like non-permitted structures or seeking expedited appraisals.Prioritize Accuracy and Compliance:
Always strive for the utmost accuracy in your property listings and ensure all structures are properly permitted. This not only aids appraisers in their assessments but also protects your clients and their investments in the long term.
Working harmoniously with appraisers is pivotal for real estate agents. The class emphasized practical steps and strategies to facilitate this collaboration, ensuring accurate appraisals and smooth transactions. Here are refined strategies for real estate agents to enhance their working relationship with appraisers:
Provide Detailed Information Upfront:
When an appraisal appointment is set, proactively offer detailed property information to the appraiser. This includes not just the basic details of the property but also any upgrades, renovations, and unique features that could influence its value.
Understand the Appraisal Process:
Gain a thorough understanding of how appraisers evaluate a property. Recognize the importance of factors like price per square foot, market trends, and property size. This knowledge allows you to set realistic expectations and better explain the appraisal results to your clients.Facilitate Access and Communication:
Ensure easy access to the property for the appraiser, whether through lockbox codes or by being present to provide access. Prompt and clear communication about property details and any concerns can significantly impact the appraisal outcome.
Leverage Permits and Legal Documentation:
For properties with recent modifications, extensions, or notable features, having permits and legal documentation ready can streamline the appraisal process. It aids the appraiser in accurately assessing the property’s compliant value enhancements.
Share Comparable Sales Data:
While appraisers conduct their research, sharing relevant, recent comparable sales data can assist in ensuring the appraisal reflects current market conditions. However, be selective and provide comps that genuinely reflect similar properties in similar conditions.
Build a Relationship Based on Respect and Professionalism:
Recognize that appraisers are experts in their field and approach interactions with respect and professionalism. Building a positive working relationship can facilitate smoother transactions in the future and ensure open lines of communication.
Educate Yourself on Appraisal Challenges and Tools:
Stay informed about common challenges in the appraisal process, including dealing with non-permitted structures or understanding the evolution of appraisal tools. This awareness can help you navigate potential hurdles more effectively.
FAQ:
Q: How can real estate agents assist appraisers in the valuation process?
A: Agents can assist by providing detailed property information, including upgrades, renovations, and any unique features, as well as facilitating easy access to the property. Sharing relevant, comparable sales data can also be helpful.
Q: What factors do appraisers consider when determining a property's value?
A: Appraisers look at several factors including price per square foot, market trends, property size, location, and the property's condition. They also consider upgrades, permits, and the functionality of any additions or renovations.
Q: How should agents handle non-permitted additions or renovations when working with appraisers?
A: Agents should disclose all non-permitted work upfront and provide any available documentation. It's crucial to understand that appraisers may only consider permitted work in their valuation, depending on the lender's guidelines.
Q: Can staging a property affect its appraised value?
A: While staging can make a property more appealing, it does not directly impact the appraised value, which is determined by more concrete factors like square footage, location, and comparable sales. However, a well-presented property can influence perceived value.
Q: How can real estate agents challenge an appraisal they believe is incorrect?
A: Agents can challenge an appraisal by providing additional information that might have been overlooked, such as more relevant comparables, documentation of recent improvements, or corrections to any inaccuracies in the appraiser’s report.
Q: What is the principle of substitution in appraising, and why is it important?
A: The principle of substitution is a fundamental appraisal concept that suggests a buyer will not pay more for a property than they would for a similar, substitutable property. Understanding this principle helps agents and appraisers establish a property's competitive market value.
Q: How do appraisers account for the difference in value added by specific features like a pool or ADU (Accessory Dwelling Unit)?
A: Appraisers use paired sales data and the principle of substitution to make adjustments for features like pools or ADUs. The value added by these features can vary significantly based on market trends and the specific characteristics of the neighborhood.
Q: What advice is given to real estate agents for preparing for an appraisal?
A: Agents are advised to compile a detailed list of the property's features and upgrades, ensure the property is accessible and well-presented, and be prepared to provide additional documentation or information to the appraiser if needed.
By integrating these insights and actionable steps into your practice, real estate agents can foster a collaborative and efficient working relationship with appraisers, ensuring both accurate valuations and successful property transactions. You can enhance your proficiency in real estate appraisals, ultimately contributing to your client's success and your professional growth within the Keller Williams Realty network.
Always do your due diligence and ask questions of the appraiser that you are working with. This class is the opinion of Derrick Carbon
About Derrick Carbon
Derrick Carbon is a Certified General Real Estate Appraiser with over 35 years of experience in the Southern California Area. Located in the San Fernando Valley and serves Los Angeles and surrounding counties. Specializing in residential, step-up, and historical/retrospective appraisals and providing services for lending and private needs as well as expert witness testimony.
Derrick Carbon
Certified General AG004970 exp. 09/26/2024
9018 Balboa Blvd #574
Northridge, CA 91325
818-717-8404 Office
818-640-2389 Mobile
