Learn to put out this common fire before it blows up a transaction
Key Takeaways
- When appraisals come in low, it takes a savvy agent to salvage a deal between an irate seller and an excited buyer.
- Appraisers will often put in the extra time to reevaluate their findings if you show them respect and know how to bring them relevant information.
- Find information about comparable home sales that the appraiser may not have seen to support your offer price.
Bad appraisals happen all the time, and they blow up deals.
When an appraisal comes in too low, it takes a savvy agent to calm a seller who is freaking out and pissed off — or to manage the expectations of a buyer who now thinks a house is worth thousands less than the original offer. These situations are a recipe for disaster, and only an agent who knows what to say to each party will be able to move the transaction forward and find a solution.
Part of your job is to understand how the appraiser does his job, what rules he has to follow, and where the grey areas are. When an appraiser tells you he’s having a hard time coming up with a value to support the purchase offer, the last thing you want to do is say something that will piss him off.
For an appraiser to dig deeper — to look at your other sources of information and then make the case to support that new information — he’ll have to put in a lot of extra time. Appraisers are paid at a fixed rate. They don’t get paid extra to spend more time on their evaluation, but they often will if you show them respect and know how to help them.
If you’re lucky enough to have an appraiser who notifies the parties when an appraisal appears to be less than the offer, usually the appraiser will give you a chance to send any additional information that would help substantiate the offer price. This additional information might include:
- Knowledge you may have of other comparable home sales in the area that the appraiser hasn’t seen.
- Extra information about the comparables used in the appraisal, especially if you have seen that home and the appraiser has not.
The more you know about the appraiser’s situation and limitations, the better you’ll be able to put out the fire of a low appraisal
Agents need to make sure they hone their firefighting skills. Many agents believe deals fall apart outside their control. These agents will make far less money because they close fewer deals, while many of their transactions could be saved if they developed solid firefighting skills.
Agents who are skilled firefighters bring in more money and need to work with fewer clients. It’s an extraordinarily important skill to learn and master. The better you get at coming up with alternative options or workarounds, the more deals you will save. This has a huge impact on an agent’s annual income. Agents could save so many of the deals that blow up on them, if only they were more experienced firefighters.