While sipping my second cup of coffee the other day, something I heard on the Today show had me sputtering in disbelief. What a mess!
Okay, I exaggerate, but MSNBC financial analyst Vera Gibbons was providing poor advice to homeowners on how to get a fair appraisal when selling or refinancing their residence.
To be fair, television demands brevity, but some of her comments struck me as uninformed or disingenuous.
With respect to folks refinancing with the same lender that directly holds the mortgage, Gibbons basically urged pleading with the loan officer to choose an appraiser who is skilled, competent and state certified.
Correctly, she notes that “you can’t go out and pick your appraiser.” Seemingly skeptical of her counsel, she does creditably say that homeowners may have just “a little bit of say.”
So far, so good.
But Gibbons then remarks that the “most important part of the process” is to gather comparable sales, comps that allow the value of your home to be derived from similar properties.
First, she suggests sales of the previous six months should be taken into account. With the market changing, depending on which part of the country or city is involved, that’s way too long a time.
Second, Gibbons says the Zillow is a good way to get a “general feel” for the local market. As I and others have observed in the past, “general” is a charitable description of what anyone can learn from a Zestimate.
“You want to be sure you it’s apples to apples, oranges to oranges,” she declares.
How, please, can a homeowner make that determination?
What is the condition of the various properties? What value should be place on one more bath, a larger master suite, a glam kitchen and so on? It is not irrelevant that most homeowners tend to overestimate the worth of their residences.
The alternative to not knowing the difference between good and bad comps is assembling a stack containing scores of possibilities. That’s going to be more hindrance than help to an appraiser and will prove to be a waste of time.
Third, Gibbons utterly ignores the role of real estate sales professionals.
Those who are any good have the experience of actually visiting similar properties, maybe even those that happen to be good comps.
We can, and regularly do, print out comprehensive listings for appraisers, note differences that are not apparent in them and wheedle information from brokers with sales that have yet to be completed or recorded to ascertain recent actual sold prices.
Moreover, the most conscientious appraisers don’t need anyone’s help. They even will take the initiative of contacting brokers involved in a sale that hasn’t closed to get an idea of the properties’ value.
At the same time, I should acknowledge that the industry has changed, and appraisers with little incentive to be thorough and little knowledge of local markets too often are those hired by banks.
I suppose some of the advice ladled out to viewers of programs such as the Today show and in consumer periodicals may be useful. But, on the basis of Gibbons’ report, I’d look for verification elsewhere.
Tomorrow: Easy does it
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022