Realtors’ role in property valuations and appraisals
BOSTON – Nov. 6, 2018 – At the 2018 Appraisal Forum – held during the 2018 Realtors® Conference & Expo in Boston – a panel of experts focused on proper communication and cooperation approaches for agents and appraisers.
The event began with a panel conversation between Lynn Madison, owner of Madison Seminars in Schaumburg, Illinois; John Torvi, vice president of marketing and sales at the Herbert H. Landy Insurance Agency in Needham, Massachusetts; Melanie McLane, owner of Jackson Real Estate in Jersey Shore, Pennsylvania; and Charlie Lee, associate counsel with NAR.
Lee focused on clarifying one misconception: That real estate professionals are prohibited from speaking to appraisers. In reality, Lee said, no rules or requirements on the federal, state, or agency level prohibit an appraiser and agent from speaking to one another during the appraisal process.
However, Lee reminded Realtors that appraisers and real estate professionals have separate and distinct roles during the home buying process.
“Real estate professionals (brokers, agents) have a responsibility to serve their clients, while appraisers are brought into this process exclusively to develop the best appraisal they can,” he said. “Still, real estate professionals are encouraged to communicate with appraisers in a professional and productive manner, as relevant information from real estate professionals may help an appraiser independently arrive at an opinion of value.
“However – and most importantly – a real estate professional should never communicate with the intent of trying to influence an appraiser’s appraisal.”
The group also touched on regulations governing conversations between appraisers and agents, while panelists shared anecdotes to illustrate how to avoid liability on all sides of the transaction.
McLane stressed the importance of mutual respect between agents and appraisers while emphasizing the claim that neither party is always right. John Torvi, who traveled to Boston from nearby Needham, reiterated that point.
“Just because an appraised value doesn’t meet the agent’s expectations, it doesn’t mean it’s a bad appraisal,” Torvi said. “As someone who works with both appraisers and agents, I hear both sides of the story. This panel discussion allowed for a better understanding of the valuation process to benefit appraiser, agents, sellers and buyers.”
The National Association of Realtors (NAR) “represents approximately 25,000 state-licensed and certified appraisers throughout the country,” said NAR President Elizabeth Mendenhall. “This forum was a valuable way for members to learn the right way to communicate with an appraiser without running afoul of appraiser independence requirements from some of the nation’s brightest minds on this topic.”
Mendenhall said she’s “confident that the contents of this discussion will generate valuable feedback to the Real Property Valuation Committee going forward, which will benefit everyone in our association.”
Reprinted with permission Florida Realtors. All rights reserved.