The Appraisal: 10 things your broker should do

The Appraisal:  10 things your broker should do

Appraisals are sometimes a source of confusion for both Buyers and Sellers, but usually for different reasons.

Review:  an appraisal is an opinion of value prepared by an authorized person.  In Colorado, Appraisers are licensed and regulated by the State. There are different levels of licensure, depending on the qualifications of the Appraiser.

Buyers sometimes think that the appraisal will “protect” them from overpaying.  There is a clause in the contract, after all, that says in effect: “if the appraisal doesn’t come in at contract price, you don’t have to buy the house.”  While there may be an element of truth in that kind of protection (today, anyway), you should stop thinking that.  If you need a reason, please Google “the role of appraisals and appraisers in the Global Financial Collapse of 2006-2008” or something similar.  There was nothing protective of Buyers for a long time leading up to the disaster, and you’ll be better off being a little more skeptical.

Sellers sometimes think that the Broker’s price opinion was an appraisal, or that having multiple offers (or even one offer) is some kind of assurance that the appraisal will come back at contract price.  Actually, there is some truth in the latter – competing offers should have a positive effect on value – but it’s not a given.

Why Appraisals are done.  In residential real estate, they are done to protect the lender’s interest in the property (the mortgage).  To learn more about what can go wrong I this scenario, Google  “the role of appraisals and appraisers in the Global Financial Collapse of 2006-2008”. The appraisal is ordered by the lender and paid for by the Buyer.

What can you do to make sure the appraisal goes the best way possible?  Answer: treat the appraisal just like you would a “showing:”  home is spotless, lights on, curtains open, staging in place (if applicable), etc.

Beyond that, there are several things you should expect your agent to do. The following list is advice from an appraiser to your broker; it’s adapted from “10 Things to Guarantee a Perfect Appraisal”, by Kerry Dunn, founder/chief appraiser at Dunn Appraisals,

1)   Show up

Having you, the realtor, at the appraisal really helps everything run better for the appraiser.

2)   Call/Email

If you can’t show up, please make a phone call or send an email of introduction to the appraiser.

3)   Pricing

Show the appraiser the documentation that you were relying on in pricing the property.

4)   Contract

Email or hardcopy contracts are always appreciated as appraisers don’t always get them from the lender. This will ensure that the appraiser has the most recent copy/latest amend-extend of the contract.

5)   Hope for the best, plan for the worst

As with realtors, appraisers come with varied levels of experience. Keep in mind that even the most experienced of appraisers may not be intimate with the market nuances of your property or neighborhood. Educate them with what you know, in 60 seconds or less. If it takes longer than that, put it in writing and give it to the appraiser.

6)   Comps

Don’t assume that the appraiser will identify and consider the same sales/listings as you did. The appraiser may, or may not, consider the same properties in the appraisal, but at least you have disclosed them.

7)   Detail sheet

Give the appraiser a list of all updates and upgrades to the property.

8)   Sketch

If you have a sketch, please share it! Appraisers appreciate confirmation of field measurements.

9)   Just the facts

Share what you need to and let the appraiser do his/her thing. Most appraisers have a rigid property inspection process that needs to be done in silence. There is a LOT of information that needs to be absorbed in a relatively short time span. It’s best to have a conversation at the end of the inspection, not in the middle of it.

 10)  Professionalism

Expect it. Lenders expect their appraisers to look and act like professionals. If they are not, let the lender know about it.

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Why Pay a Commission?

Why Pay a Commission?

Homeowners attempting to sell their home without using a real estate broker generally do so for one reason only: to avoid paying a commission.

Is it worth it? Only the home owner can answer that, but experience has shown than many for-sale-by-owners find that it’s not. Before making a costly mistake, consider the benefits, from A to Z, you receive from working with a trained real estate professional:

Advertising– The agent pays all advertising costs. Open Houses – A popular marketing technique.
Bargain – Research shows that 77% of sellers felt their commission was “well spent.” Prospects – An agent has a network of contacts that can produce potential buyers.
Contract Writing – An agent can supply standard forms to speed the transaction. Qualified Buyers – Avoid opening your home to curiosity seekers.
Details – An agent frees you from handling
the many details of selling a home.
Realtor® – An agent who is a member of the National Association of Realtors® and subscribe a strict code of ethics.
Experience and Expertise – In marketing,
financing, negotiations, and more.
Suggested Price – An agent will do a market analysis to establish a fair price range.
Financial Know-how – An agent is aware of
the many options for financing a sale.
Time – One of the most valuable resources in an agent.
Glossary – A real estate professional understands, and can explain, real estate lingo. Unbiased Opinion – Most owners are too emotional about their home to be objective.
Homework – An agent is aware of the many options for financing a sale. VIP – That’s how you will be treated by your agent!
Information – If you have a real estate question, an agent will know (or can get) the answer. Wisdom – A knowledgeable agent can offer the wisdom that comes with experience.
Juggle Showings – An agent will schedule and handle all showings. X Marks the Spot – An agent is right there with you through the final signing of papers.
Keeps Your Best Interests in Mind – It’s an agent’s job. Yard Signs – An agent provides a professional sign, encouraging serious buyers.
Laws – a real estate professional will be up-to-date on real estate laws that affect you. Zero-hour Support – Selling a home can be an emotional experience. An agent can help.
Multiple Listing Service – The most effective
means of bringing together buyers and sellers.
Negotiation – An agent can handle all price
and contract negotiations.
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4 Biggest Complaints about Brokers

4 Biggest Complaints about Brokers

The Colorado Real Estate Commission (CREC) says complaints about brokers are increasing as the market heats up.

They tell us that most complaints with brokers and mortgage lenders have to do with “transaction management”, while complaints against appraisers are usually about value.  Here are the most frequent complaints about brokers:

1. Practicing with an expired or inactive license. You must have an active real estate license to perform the duties for which a license is required.
2. Dates and deadlines. We receive numerous complaints about real estate brokers missing deadlines and we have seen an increase in the number of complaints that involve the loss of earnest money.
3. Failure to disclose adverse material facts. Unfortunately, this is not a new type of complaint and substantiated violations of this law do not bode well for one’s license. Disclose, disclose, disclose.
4. Failure to provide your clients with executed copies of the contract documents and to keep them appraised of the transaction. We receive a lot of telephone calls and complaints from consumers who are in the process of buying or selling real property and they are oblivious to what is actually occurring in their transactions. Whether the real estate broker is a single agent or transaction broker, keeping the client informed is part of exercising reasonable skill and care.

The CREC is charged with protecting the public, and what they’re doing is asking brokers to pay more attention to these details. And remember, you’re vicariously liable for the actions of your agent. As a consumer you can be forewarned by this: disclose fully what you know about the condition of the property (and make sure it’s in writing); make sure you pay attention to deadlines and understand what each one means; get copies of all documents and discuss with your agent; stay in touch with your broker — take the initiative if they’re not calling you often enough.

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David a 5-Star Pro in 5280 Magazine!

David a 5-Star Pro in 5280 Magazine!

 Five Star Professional will recognize me in an upcoming issue of 5280 Magazine.

Five Star Professional administers a survey, by mail and phone, to recent homebuyers. Clients of real estate agents may also submit evaluations online. Each respondent is asked to evaluate only real estate agents with whom they have worked and evaluate them based upon ten criteria: customer service, integrity, market knowledge, communication, negotiation, closing preparation, post-sale service, finds the right home, marketing of home, and overall satisfaction.

David Halterman, Denver Real Estate Broker

“We are pleased to inform you that you have been named a 2013 Five Star Real Estate Agent. Congratulations on reaching a level of excellence achieved by fewer than 7 percent of the real estate agents in your area.

You are being recognized by the largest and most widely published real estate agent award program in North America. Your selection is the result of a rigorous research process that included a regulatory and consumer complaint review, and an evaluation of objective criteria associated with real estate agents who provide quality services to their clients.”

Read more about 5-Star Professionals . . .

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Choosing your Broker – 10 things to know

Choosing your Broker – 10 things to know

Find a Realtor®:   Questions when choosing an agent

Buying a home can be a great time. Selling your home can be equally fun, however sometimes it turns into a very stressful event. Many people do not know where to begin when buying or selling a home. This is why it is essential for buyers and sellers to have good representation. Here are 10 tips to help you find a great Realtor:

  1. Find an agent you trust. Just because someone is a big producer does not mean that they represent their clients well. Perhaps they just run a good real estate business.
  2. Find a knowledgeable Realtor that knows the market and the process. Some agents are more charisma than substance. Try to find an agent that give honest advice, even it it is not what you want to hear.
  3. A Realtor should know his or her way around the area. As a buyer you want to know that your agent can get you to each house on your list without getting lost. An agent that pulls over to look at a map does not instill confidence in a buyer.
  4. The biggest producers are not always the best. If you want extra attention pick an agent that can does not have a boat load of listings.
  5. Choose a Realtor that works full time. There are some agents who work part time and buying or selling real estate requires the work of someone who can be there for you anytime.
  6. Avoid pushy agents that push you to buy a house that you’re not sure of or that pushes you to list your home with him or her. Big decisions require time, avoid pushy agents.
  7. Find an agent that is up to date on technology. Most MLS systems are on the internet now. If you have an agent that is not great with the computer then maybe they are missing some opportunities.
  8. Ask if your Realtor has a strong network of professionals to call on. This could range from assistants, other agents, inspectors, attorneys or lenders. Good help might get you out of a possible jam.
  9. Find a Realtor who enjoys what he or she does and is happy and excited to work with you.
  10. Have someone refer you a good agent. You most likely know someone who can refer a good Realtor.

An experienced, competent and happy real estate agent can make your transaction much smoother. Use these 10 tips to find yourself good representation.

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