Realtors and Appraisers.. The Great Divide

Recently I have noticed in various groups and forums many posts from Realtors about Appraisers as well as Appraisers about Realtors. These posts aren’t about complimenting one another rather they are about complaining and or making disparaging comments about each profession. Realtors will say appraisers are not doing their job correctly, coming in low, killing deals or just won’t talk will them. Appraisers will say that the Realtor has no idea what they are doing, they priced it too high, they don’t understand what we do or complain about the information they were given. It’s a never ending Saga of two professions that have different functions yet no one seems to understand that.

So in this blog, I want to break it down some and also offer some ways I approach this dilemma as an appraiser that has allowed me to bridge the gap some.

First off lets start with the Appraiser.

What is the Role of the Appraiser? The role of the appraiser is to provide objective, impartial, and unbiased opinions about the value of real property—providing assistance to those who own, manage, sell, invest in, and/or lend money on the security of real estate. The appraiser has no vested interest in the transaction thus remaining unbiased and impartial. The appraiser has an obligation to their client typically the lender, to provide them with their professional, unbiased opinion of value of the property using various methods, analytics, analysis and data. There is a lot more that goes into this, however for the sake of this article we will keep it simple.

Now we discuss the Realtor.

The duties of a Realtor representing a buyer are to help the client find the best property, at the best price, which meets the client’s needs, and to navigate the transaction through escrow while protecting the client’s best interests. This involves researching suitable properties, taking clients on viewing, making offers and negotiating the terms of the purchase. They are also the key person in making sure escrow is completed properly.

The duties of a Realtor representing a seller are similar, yet in this instance, duties include marketing the client’s property in an attempt to find a qualified buyer and obtain the best price for the seller, while protecting the clients best interests. In both instances, the Realtor typically handles negotiations between the buyer and seller, acting as an intermediary for her client.

So now that we have discussed what each profession does and their roles, lets discuss some differences as well as how each can compliment each other and or learn from one another as to work together better and not against each other.

One of the biggest issues is due to whom the client is for each profession. As an Appraiser the client is typically the lender whereas if you are a realtor the client is the person you represent (the seller or buyer).

Another factual difference is the aspect of being impartial or not impartial. Appraisers HAVE TO remain unbiased and impartial. They cannot have any vested interest in the property as to completely be unbiased. As a Realtor, there is some something of vested interest. Representing a seller, you want to get the most money for your client as possible for the property and representing a buyer, you want to get the best overall deal or outcome you can for them. You have a vested interest in getting the best overall outcome for each party. That’s the job.

So how can Appraisers and Realtors work together better. I will outline my expertises as well as what i have gathered from other groups and forums.

1) I think this may be the Most important point. Both realtors and Appraisers have to take classes and pass a test. They both need to take continuing education as well. While appraisers have to take more education and classes to become an appraiser as well as do an apprenticeship before they can go off on their own, both realtors and appraiser have classes geared towards their own specific professions. With that in mind, one solution is for each profession to take educational classes in the other profession as to learn more what each entails, what the guidelines are and to better understand the requirements of each.

2) Stop complaining and start learning. I was one of those complainers for such a long period of time. I complained about realtors. However, it wasn’t until I started to reach out and speak to realtors that I started to understand more things. I started to understand that they didn’t know much about appraisals and I didn’t understand anything about being a realtor. I made it a point to start attending realtor events, join groups and even took my salesperson class here in GA, so that I could understand more about their side, and I am hoping realtors would be willing to do the same so that they too can expand their knowledge and better themselves. When I took my classes I learned a lot, however I also have a better understanding of why realtors don’t understand many things we learn as appraisers and also why I didn’t understand what they do as realtors. The classes that each has to take are crazy different, and even just taking a basic class gave me better clarity.

3) What’s even more clear is that we all share something in common yet on a different spectrum. Realtors are faced with pressures from their sellers to sell the home at a certain price and also from buyers who demand a specific home and at a specific price. Appraisers face pressures from lenders and AMCS to make value, pressures from realtors to examine sales, explain why the appraisal value is what it is etc. Pressure, Pressure, Pressure… It’s the common theme. Instead of adding pressures, take more time to understand. Ask questions and supply your data to help the situation not make it worse.

4) Realtors… Appraisers are Not the enemy. Appraisers…. Realtors are Not the enemy. We have different roles. We have different education and different guidelines to follow. What we have in common is that we are all part of the same industry, we want what’s best for OUR clients (who are different) and in the end we all want to walk away knowing we did the best job we could.

5) Do your research… Appraisers reach out to realtors and start the conversation. Realtors, reach out to appraisers and do the same. You can talk all you want with people within your profession, but you will continue to get the same info time after time instead of the information you seek from the ones that actually know.

6) Realtors set the price for the home. They negotiate it and they represent it. Appraisers give the opinion on the Value of it in the market. Yes they may be different. Many times they are. Appraisers need to talk to the agents. Get their information as to WHY they set the price that way. Get the details. Realtors, you’re in a bit of a bind here as the appraiser cannot discuss value with you (on Federally backed transactions only, where a lender is the client of the appraiser) however you still can discuss details, provide info and ask the appraiser questions that you may have. The appraiser may not be able to give you much insight but understand, that’s not the fault of the appraiser, that’s just the rules and regulations appraisers must follow. Now if you understand appraising better and the rules and regulations you know that there are other ways to address the issues instead of making disparaging comments about the appraiser.

7) Both professions need to understand their roles. Both need to refrain from crossing boundaries they have no education about. Some appraisers are good at what they do and some are bad. Some realtors are good at what they do and some are bad. Some of my best clients are realtors. I get many pre listings and many consulting jobs from them. I don’t assume I know best. I am a real estate appraiser and I do my job the best way I know how. Realtors I deal with are the same. There are good and bad in each profession however its up to you to seek out the good, develop a relationship and learn.

8) Income… A Big One here. This is also a distinct difference in both professions. Appraisers are typically paid a flat fee for an appraisal based off their scope of work with no other motivations involved. Realtors are commission based. Income is a direct result of the sales price thus leading to a more motivated approach. A higher sales price leads to more income and a lower sales price leads to less income. This in many ways has realtors more invested in the deal and can lead to more bias whereas for the appraiser income is not dependent upon the sales price. I can totally understand the Realtor side of things if I was basing my income off a certain price only to have it reduced later after the appraisal is conducted and it were to come in at a different Value. This factor alone leads to many disagreements and issues between the two even if its not disclosed that way. 

I see this all the time. Realtors have their preferred lenders to work with. They have their preferred home inspectors. They have their preferred everyone. Why do you not have your preferred appraiser? Yes the lender may send out someone other than your preferred appraiser however spending money on your preferred appraiser beforehand may help you avoid issues later on or give you insight. Appraisers. Do you have preferred realtors? Realtors you can bounce ideas off of even if it’s not their listing or to just ask questions to? Why not?

In the end it comes down to relationships, trust, understanding and knowledge. When you have these in place, your life, career and business can be so much more beneficial. It amazes me that the divide is so great yet after reading the groups and more I am not surprised. Neither profession is superior to the other. They just have different roles. Realtors do not value a home, they price it to their clients needs, they market it, they show it, and they negotiate it. Appraisers Value a home in the market. They give their unbiased opinion of value to the lender to how much the home is worth in the market.

There is a reason why there are Realtors and Appraisers. One prices, markets, shows, has interest to get top dollar, and has interest to negotiate. The other has no interest, unbiased and analyzes in depth to determine value for the person lending the money.

Realtors and Appraisers can, should and need to work better together for all parties involved. They need to understand each other’s roles, processes and requirements much better. A better understanding of each other can eliminate many frustrations and issues within the process and build relationships that can add value to a much more successful future.

1 thought on “Realtors and Appraisers.. The Great Divide”

  1. With all the issues of the current market I could not agree with you more. I encourage agents to have an appraiser that (As one of my agents state) can be the voice of reason. Someone that is impartial and just states the facts about the property.


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