Cape Appraisals Blog

One of the most common questions asked of Appraisers by the general public is how did they verify or obtain the data used for the different values reported in the appraisal report.  There are several different sources that appraisers use, however some are very reliable and some are not very reliable at all.  Here's a quick break down of the two different types of sources:

Reliable Sources:

• Public Record:  This is information available to the general public from different public officials such as the Clerk of Courts, the County Property Appraiser, the County Tax Collector, and the local Building & Planning Department.  These are considered reliable as they take into consideration one of the most important tests of "Highest & Best Use", which is "legally permissible". 
• Local Multiple Listing Service (MLS):  This source is full of very valuable information such as competing property listing prices, differences between listing prices and selling prices, price revisions of comparable sales, more in depth descriptions of properties than public record, financing and sales concessions, and how long comparable sales were on the market before they were sold.  With today's technology, the local MLS is very important as the Appraiser can actually view the interior of most comparable sales through digital photographs and virtual tours which can allow the Appraiser to narrow down differences between the comparable sales and the subject property he/she is appraising.
• Local Realtors:  One of the most important sources of information is a Realtor that was actually involved in the transaction.  Although there are certain details the Realtor can not discuss, the information provided can be very valuable to the Appraiser when qualifying a comparable sale in his/her appraisal. 
• Local Builders & Developers:  Local Builders & Developers can give the Appraiser an accurate estimate of how much it costs to build the subject property.  This is very important, as local building costs change very rapidly in most markets.
• Buyers/Sellers:  These may be even the most valuable source of information for the Appraiser to use.  As any experienced person in the Real Estate market can tell you, the Buyers & Sellers DRIVE the market.  That means that they actually determine what a home's "market value" is.  One of the basic principles in appraising via the sales comparison approach is to determine what the typical buyer is willing to pay for a particular property in today's market.  Only discussions with Buyers & Sellers will enable the Appraiser to determine this.
• Closing Agents:  Title Agencies that close transactions can offer the Appraiser "Fresh" data to work with, especially with transactions that might not appear in Public Record.  In our local market, it takes the Clerk of Court sometimes up to 1 month to update sales.

UNRELIABLE Sources:

• Indirect Parties:  Often some inexperienced and "Lazy" Appraisers will rely on information obatined from indirect parties that know that a home sold, but do not have knowledge of the intentions of the Sellers & Buyers.
• Biased Parties:  Although some information provided by persons with a financial interest in the Appraiser's subject property is accurate, it should always be verified through a reliable source.
• Third Party Database Systems:  Unfortunately, many Appraisers utilize Third Party Database Systems as their only source of data when analyzing comparable sales. These database management systems typically obtain their information only from Public Record.  Often they do not update their data often enough for the Appraiser to get an accurate picture of the local market.  Often Appraisers rely only on this source when they are not from the subject property's local market area.  By using only this source, the Appraiser is actually in violation of USPAP (The Uniform Standards of Professional Appraisal Practice).

As the user or client of an Appraisal, you should ALWAYS demand only the best quality and most accurate appraisal by asking the Appraiser if he/she uses RELIABLE sources of data.  If not, you should interview several Appraisers until you know that you will will not waste your money on an appraisal that is not as accurate as you expect.  Make sure your Appraiser is from the market area that he/she is appraising in and competent enough to complete the assignment. 

You can always trust that the Appraisers at Cape Appraisals will always use the most Reliable and accurate sources of information in their appraisals. 

For more information, please contact our Compliance Officer, Jim Kreider at Jim@capeappraisalsfl.com or call (877) 221-4254.

Cape Appraisals Can Help!

As lenders are becoming more open to renegotiating loan terms to assist homeowners in times of need, Cape Appraisals can assist by offering a very powerful negotiating tool.  Typically lenders are more flexible in helping you keep your property in market areas that have experienced declining values.  If you feel your home may not be worth as much as you paid for it due to a declining Real Estate Market, call our pre foreclosure specialist, Jim Kreider at (239) 458-2463 or email Jim@capeappraisalsfl.com to receive your confidential consultation. 

Jim has six years of experience in the local Real Estate Market.  This experience has aided Jim in developing strong relationships with lenders and banks nationwide.  An appraisal can be a very powerful negotiating tool to take to a lender when you need help.  Lenders take into consideration the difference between the property's current value vs the balance owed on the mortgage.  Often when the current mortgage exceeds the value, the bank is very forgiving and willing to re negotiate to help you keep your property.

Mention this blog and receive $50 off of our full appraisal fee!