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OutSource

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Reply with quote  #1 

Has anyone had a problem with Sales agents who think they are Appraisers? 

They pull sales (Supposed to be Comps) and try to beat down the price of a home they are going to show.

Is this wrong for these Real Estate Agents to inform the buyer that they have pulled "Comps" and they show a lower price Like $50,000 to $100,000 less than the listed price?

I think they are breaking GA Law by stating a price, Thinking that Sales are Comps, and misleading their client. 

Am I wrong?

I also think that this should be a Warning for Sellers to have their home Appraised before they List.


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Meatloaf

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Reply with quote  #2 
You are wrong.

This is what an agent's job is to do.  Represent their buyer by convincing the seller to go lower.

You don't have to be an appraiser to pull a "comp".  The only thing you have to have an appraiser's license to do is to actually say you are an appraiser.



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MEP

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Reply with quote  #3 
CMAs are part of the selling process; unlike appraisers, agents can say anything that they want, as long as they indicate it is an opinion...on the other hand, we are compelled to support our opinions with facts.
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RubberStamp

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Reply with quote  #4 
don't need a license to pull comps and have an opinion..   even if it is wrong.
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We argue this: Meanwhile the agent's assistant just did 5 unofficial appraisal inspections they paired with a Zestimate and granted 90% LTV - all guaranteed no buy back.
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pnalley

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Reply with quote  #5 
Have to agree, you are wrong.
It is an agents job to try to get the most $$ for a home they have listed and to try to help their buyer get the lowest price.
They don't call it an appraisal. They call ot a CMA, or BPO

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BracketThis

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Reply with quote  #6 
  It is not illegal for the buyer's agent to pull sales (which probably are not "Comparable" at all) for their lowball offer. Sometimes an agent will give me a folder of "comps" while I am at the inspection for a purchase, usually the selling agent. I politely accept the folder & state that I will take a look at these, however Georgia law & USPAP state that I research the market & provide the best comparables which most represent the subject's current market value. So I may use some or all of these sales or none at all. I may wipe my butt with them when I run out of toilet paper. 
  I agree more sellers should get an appraisal before they list the property. Knowing what it will appraise for is a big negotiating advantage, as well as a way to avoid headaches with buyers outbidding each other by thousands of dollars. When the appraisal comes back thousands of dollars below contract price, the buyer wants to re-negotiate the price to the appraised value. And if it's FHA- crap biscuits! Seller says no way I can get this much $$$ for the house. Now we have gone through 2 weeks for nothing, back to square 1. If the seller knew what it would appraise for, they would have said adios FHA buyer I'll go with Mr. Conventional buyer because at least he may be able/willing to kick in the extra couple of thousand to buy the property. After all, he outbid the others. 
  What I really hate are the agents that just list the property for whatever the seller wants to get for it then "let the appraiser be the bad guy."

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MEP

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Reply with quote  #7 
"I agree more sellers should get an appraisal before they list the property. Knowing what it will appraise for is a big negotiating advantage, as well as a way to avoid headaches with buyers outbidding each other by thousands of dollars."

Disagree...the premise is that the two appraisers will select the same comparables, and make the same adjustments...However, the values should be similar but new comparables may change the "Opinion of Value".



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BracketThis

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Reply with quote  #8 
Perhaps, but it may assist the seller in selecting the best offer among several bids. In any case, a $400 fee even for a $100,000 sales price is a drop in the bucket. Selling agent says "we can get $125,000 for this house" when they know everything like it in s/d is selling for $100,000. Seller now can call bs on the agent, get another agent or go for the hail mary and try to get a cash buyer for the $125k. Either way, it's probably worth $400 to the seller for this info.
Everybody knows real estate agents never lie!

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treskirkland

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Reply with quote  #9 
Quote:
Originally Posted by BracketThis
Perhaps, but it may assist the seller in selecting the best offer among several bids. In any case, a $400 fee even for a $100,000 sales price is a drop in the bucket. Selling agent says "we can get $125,000 for this house" when they know everything like it in s/d is selling for $100,000. Seller now can call bs on the agent, get another agent or go for the hail mary and try to get a cash buyer for the $125k. Either way, it's probably worth $400 to the seller for this info.
Everybody knows real estate agents never lie!



Many times it is the seller saying "my house is worth $125,000," not the agent.  I do a number of pre listing appraisals for agents, because the seller thinks the house is worth more than it is.  
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BillDing

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Reply with quote  #10 
Sellers really hurt themselves with their sentimental higher than market value.  It sits on the market and they start chasing the market because it doesn't sell. Now the home has been on the market for 2, 3, 4, 5+ months and the buyers are thinking, "something must be wrong with that property", and it ends up selling below market value.  Even if it ends up eventually selling at market value, how much money and opportunities did they lose waiting all that time?

As far as so called "comps", I welcome them from the agents!  In fact I always ask them to provide their sales used to form their BPO/CMA.  This can indicate whether or not the buyer/seller is really knowledgeable in the market - one of the conditions of sale defined in Market Value that we verify.  If all the comps are all superior, basically the agent(s) have bamboozled the buyer and seller into thinking it is worth more than it's worth or that there are atypical motivations involved. Now, when the report comes in below contract, (supported by true comparable sales) you explain that the buyer may not have been knowledgeable to the market due to not understanding that the properties used as comparables were superior to the subject. If they were aware that the comps were superior and knew they were buying the home over market value, then they were not acting prudently or were not displaying typical motivations. Therefore, in any event, the subject contract is not in line with the conditions set in the definition of Market Value, thus not considered to be a relevant indicator of value.

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Bobby

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Reply with quote  #11 
I like to sit back and watch agents blow smoke.  Get them talking, they pull some big numbers out of the air.  It's good entertainment. 
And Bill is right, I always tell the agent to give you any information that they feel may be relevant to the appraisal.
That puts the ball in their court and let's them know you won't consider BS.  

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Meatloaf

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Reply with quote  #12 
Personally, I think its easier to just do the appraisal without the agent's help.  Then if they call crying after the fact, you can tell them to submit their data to the lender for reconsideration.

99% of the time they know they don't have anything relevant and won't bother.  The other 1% of the time, the lender or AMC takes a look at what they send and run interference for you.

I just find that its a better strategy.... Unless I am in a new S/D and really need some data or something but I will only ask after I have done some research first.

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RubberStamp

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Reply with quote  #13 
Are Sales agents Appraisers?

Hmmm.  Tougher question than meets the eye.  The are now accepted to do our appraisal inspections for us so..  its cloudy.   

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We argue this: Meanwhile the agent's assistant just did 5 unofficial appraisal inspections they paired with a Zestimate and granted 90% LTV - all guaranteed no buy back.
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Meatloaf

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Reply with quote  #14 
Some sales agents are more knowledgeable about the market than some appraisers.  Don't be too quick to bash an agent.
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RubberStamp

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Reply with quote  #15 
Quote:
Originally Posted by Meatloaf
Some sales agents are more knowledgeable about the market than some appraisers.  Don't be too quick to bash an agent.


Except the odds are 100/1 that they are these days... not necessarily a knock on them but the appraiser trainees of 2002-2007 are now seasoned veterans.  With experience comes knowledge.  Agents typically fall into these categories:

a) the clueless cute 20 something living off her skills she learned in sorority

b) the aging 2nd income earner working their super church connections.  They want to look smart, sometimes, so they can put up a front as a deflection of their true lack of knowing what is supposed to be going on.  Call them out on one thing and they will fall into nervous laughter and never press you again

c) the hyper aggressive 20 something male who watches too much million dollar listing who never has time for anything, especially respect or manners,... and it shows by all the loose ends.. will typically end up a d or e someday

d) the hyper aggressive power broker male or female. Their only tactic is empty-shell intimidation even when just greeting you but you rarely even talk with them its usually their co-listing or showing service

e) same as d but they deal mostly with REO and they are completely incapable of having a normal conversation without being an ass.  They went the REO route because they are completely unlikable

f) the lone broker who's put their dues in and seen it all before.  They might know the market but don't want to put that much effort into challenging you so they are typically quite pleasant and just tell you to call them if you need them.

g)the real estate family agent.  They typically have their toes dipped in everything; rentals, flipping and mostly middle class home sales.  Volume and diversity is their thing.  Their rogue son typically is an appraiser or similar leaching off of real estate industry job just because, you know, they had to do their own thing.. 

e)the left over pile of winners.  Those that have some characteristics of a - g but are just winners either by genetics or past work experiences.  Thy are likable, know where their expertise ends, ask the right questions, provide you exactly what you need no more no less...  they just do everything right. 



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BracketThis

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Reply with quote  #16 
I think you've got it pegged on the agents, Rubberstamp. 

There are many agents/Realtors in my market (south of metro) who are both licensed agents & CR or licensed appraisers. In one case, I had a homeowner tell me that this agent (who was an appraiser) said he should list for $XXX,XXX and he is an appraiser so he knows what it's worth. The guy decided not to sell so I was there to do a refi and of course this number was way too high. This is a big no-no per USPAP. I think a lot of agents who are both get away with this because the homeowner doesn't know this is a USPAP violation so no one to turn them in.


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RubberStamp

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Reply with quote  #17 
Quote:
Originally Posted by BracketThis
I think you've got it pegged on the agents, Rubberstamp. 

There are many agents/Realtors in my market (south of metro) who are both licensed agents & CR or licensed appraisers. In one case, I had a homeowner tell me that this agent (who was an appraiser) said he should list for $XXX,XXX and he is an appraiser so he knows what it's worth. The guy decided not to sell so I was there to do a refi and of course this number was way too high. This is a big no-no per USPAP. I think a lot of agents who are both get away with this because the homeowner doesn't know this is a USPAP violation so no one to turn them in.



You've got to admit...  that would be a very narrow and slippery path to walk.  Don't don't hold it against them..  I'm going to be selling too someday and it would be helpful to separate yourself from the pack by detailing decades of appraising experience. 

I'll have to figure out how to come up with that pitch that walks the line.  Maybe have them sign a waiver that indicates that they understand you are acting as an agent regarding any details or opinions you may provide during the listing process.

That's actually a great forum question..  for another day

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We argue this: Meanwhile the agent's assistant just did 5 unofficial appraisal inspections they paired with a Zestimate and granted 90% LTV - all guaranteed no buy back.
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BracketThis

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Reply with quote  #18 
As long as you say you're giving a BPO or suggested sales price AS A REAL ESTATE AGENT I think you're within USPAP. You can state that you used to be a full time appraiser & still hold that license however you are not giving them an appraised value.
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RubberStamp

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Reply with quote  #19 
Well doesn't that cause a dilemma haha..

As a real estate agent I can sell your home for $500,000.

But I gotta tell ya, as an appraiser its only worth $450,000.  

Do we have a deal?

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OutSource

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Reply with quote  #20 
When you add to this story, an Agent brings a potential buyer to you house you have listed for $500,000 and tells you that they have pulled comps that only support $375,000.  What are you going to do?

The Public needs to know that an Appraiser does have a lot more they have to Prove and have in file to have this house appraisal, even if he is acting as their agent.

The selling agent also needs to know that, if they really want to sell this house and be paid a commission, then they also need to bring in a "Real Offer" and not this "BPO" that does not even require agents to have the correct County listed on that report.  (BPO = Fake Market Value)  or show me your data file!

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RubberStamp

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Reply with quote  #21 
Outsource you are 100% right but I just don't understand what got you upset.  They are obviously not real buyers..  at least yet.  It doesn't seem like there is much pressure there to have to do anything as the seller other than wait for a buyer who isn't trying to lowball.  If the house is indeed sitting...  maybe need to readdress expectations and maybe adjust a little for seasonal changes. 

In an increasing market you are supposed to be pushing the top a little if the home is well updated. Makes it tough on appraisers but that's how it goes. But substitution would take care of everything for you..  if there are better deals nearby they will get scooped and yours will sit and then when its sitting... you know something's wrong.

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We argue this: Meanwhile the agent's assistant just did 5 unofficial appraisal inspections they paired with a Zestimate and granted 90% LTV - all guaranteed no buy back.
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