05/30/2019
It is unfortunate that many Real Estate Agents don't understand Appraisal requirement.Agents often blame Appraisers when the appraised value is below the selling price, when in fact, the Agent did not price the property properly to begin with.
For example; Detached finished area and finished areas below ground (Basements) must be valued seperately from the main house. Agents usually include this Gross Livable Area (GLA) and room count with the rest of the house. Federal National Mortgage Association (FNMA) require the appraisal to include detached finished areas, and finished basements seperately from the rest of the house. NO CHOICE, the appraiser does not make the rules but does have to follow them. So when an agent includes these areas and prices the house as if it was a 3,500 square foot (sf) house with 5 bedrooms and 3 and 1/2 bathrooms, when in fact is is a 3,000 sf house with 4 bedroom and 2.1 baths, with a 500 sf detached FROG that has 1 bedroom and 1 bathroom. We are looking at a totally different set of comparables. Basements and FROGS are not usually of the same quality as the main house and do not have equal value. In Addition to this the market data is not correct and I can't find proper comparables because the FROG/Basement is not broken out in the Listing so I cant find comps for a FROG/Basement. Agents please stop including these area with the main houses sf. If you must, please break it out in the notes. I cant give these areas the proper value because the house next door has a finished basement that's not listed separately so I don't even know that its a comparable. PLEASE BREAK OUT THESE AREAS SEPARATELY. You think its good marketing but its mis information. Someone going to get sued because the sold a 3,500 sf house that is actually a 3,000 sf house.The statement in your contract that says you are not responsible for anything is not going to hold up in court. You have a professional license and a fiduciary responsibility to your client and your profession. Stop blaming the appraiser and do things properly to begin with.
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