The Importance of an Appraiser

By | April 22, 2019

The Importance of an Appraiser

Simply put, an appraiser is the only person within a real estate transaction that is unbiased and is not compensated based on a sale price or loan amount. Agents, lenders, and loan officers are all compensated based on a percentage of the loan amount or sale price. They have an incentive to push values higher.

A real estate transaction is one of the largest investments most consumers will make in their life. It is important to protect your investment with accurate and reliable information on the value of the property. A credentialed appraiser is the only one that can provide that you to.

Whether a Licensed, Certified Residential or Certified General Real Estate Appraiser, prior to licensure an appraiser has undergone a minimum number of class room hours, on the job training directly supervised by an experienced appraiser, completed a minimum number of appraisal reports and passed a national exam showing competency in the profession.  Once licensed, appraisers are required to complete continuing education to further advance their skills every two years.

Most sales contracts have contingency clauses stating the property must appraise for the purchase amount or higher as well as the purchaser obtaining financing.  Most lenders will order an appraisal to determine the market value of the property. The lender usually asks the borrower to pay for that appraisal. State law requires the borrower receive a copy of that appraisal, but that appraisal is for the lenders use, not the purchaser. The appraiser is bound by the Uniform Standards of Professional Appraisal Practice which prohibits the appraiser from discussing the appraisal with anyone other than the client, which is the lender.

Who do you want completing your appraisal; The cheapest and fastest guy in town or the experienced, reputable professional of your choice that has an established presence in your market?   Some lenders outsource the appraiser assignment to appraisal management companies. This in itself is problematic. See how some lenders order those appraisals in “The Shifting Narrative of Appraisal Modernizations”, written exclusively for VaCAP.

Consumers should hire their own appraiser to protect their investment.

To protect your financial interest, consumers should hire their own appraiser. Appraisers can discuss your needs and offer different types of appraisal reports to give you complete confidence in your decisions. Not only do you get to choose the appraiser based on their market expertise and experience, you will be able to discuss everything about the property and the appraisal report with the appraiser.

Paying cash for the property? All the more reason to hire your own appraiser to make sure you are not paying above market value.