With recent changes to the real estate agent compensation structure, it has become even more crucial for appraisers to verify the details of a sale to ensure accurate property valuations. Many real estate agents have asked, “What is my obligation to respond to the appraiser’s questions?” The answer is simple: providing timely and accurate information helps avoid delays in the appraisal process, potential delays in closing, and ensures we are providing accurate property valuations for each appraisal.
Appraisers often work under tight deadlines, with some clients requiring appraisal reports within 24-48 hours. When we reach out with questions, it’s because we need to verify crucial details to complete our reports. If we cannot verify these details promptly, we have two options: either use a different comparable property (explaining why the original was excluded) or risk including unverifiable details, which could skew our final results and necessitate additional explanations in the report.
Here are the 5 key details that appraisers need from real estate agents when inquiring about prior listings or sales:
Agent Compensation Who paid the agent's compensation (both the buyer's and listing agent compensation) and what was the amount? This detail helps us understand the financial dynamics of the transaction and ensures accuracy in our valuation process.
Seller Concessions Provide specifics about any seller concessions. What were they for and do you believe they were necessary to achieve the final sale price? This information is crucial for assessing the impact of concessions on the property's overall value in relation to the market.
Solar Panel Financing If the property includes solar panels, clarify their status: were they owned outright, financed, or leased? If financed or leased, were they paid off at closing, or did the buyer assume the lease or financing? This impacts the overall value and net worth of the property.
Arms-Length Sale Confirmation Confirm whether the sale was an arms-length transaction. An arms-length sale indicates that the transaction was conducted between unrelated parties, ensuring that the sale price reflects fair market value without any special arrangements.
Comparable Sales Data If the appraisal is based on your listing, then please provide the comparable properties you used to price the property prior to the appraisal inspection. This helps us understand your pricing strategy when we analyze the neighborhood market conditions.
Your cooperation in providing these details not only supports the accuracy of the appraisal but also helps expedite the process, ensuring a smooth transaction and timely closing. Thank you in advance for your collaboration as we all navigate these new changes to the industry!
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