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Consider These Factors When Choosing a Real Estate Appraiser

September 26, 2023

The appraisal process is critical to real estate transactions. An accurate appraisal can help:

A buyer to avoid overpaying for a property
A seller to ensure they get a good price for their property
A lender to avoid lending more than the property's fair market value

Property buyers, sellers, and lenders enjoy these benefits if they work with the right appraiser. Below are tips to help you get the right appraiser.

Qualification and Licensing

Ensure the real estate appraiser is qualified and licensed. The qualification and license confirm the following:

The appraiser knows their trade since the government requires appraisers to train and pass an examination
The appraiser has thousands of hours of real-world experience
The appraiser has up-to-date knowledge since the government requires recertification every two years

Ask the appraiser for their license, which you can confirm at the Department of State's website .

Specialization

Residential and commercial property appraisals differ. For example, commercial property appraisal considers income generation, which isn't a factor for residential property appraisal. An appraiser may have experience in one property type but not the other. Look for an appraiser experienced in the property type you are dealing with. Property appraisers use several forms of insurance coverage to protect their business. However, you only need to confirm a few forms of insurance coverage, depending on your role in the property transaction. For example, a buyer should confirm that the appraiser carries errors and omissions (E&O) insurance. The E&O insurance may help you recover your losses if the appraiser makes a mistake or omission during the appraisal. As a seller, you should also confirm the appraiser's general liability insurance. The insurance will protect you if the appraiser damages your property during their work. The appraiser's inability insurance also protects you from third-party claims arising from injuries the appraiser might cause on the property.

Geographic Knowledge

An appraiser with local knowledge will give you accurate work because geography and location affect property values. Such an appraiser:

Is familiar with the local property market
Understands the local zoning and regulations
Has easy access to local property data
Understands and can account for the unique features in the area

You will get these and more if you choose an appraiser based in the area.

Communication Skills

Gauge your appraiser's communication skills, which are essential for two main reasons. First, the appraiser needs good communication skills to do their work properly. For example, they will communicate with others, such as property agents, owners, and realtors. Secondly, the appraiser should be able to communicate their findings to you effectively. Peruse the appraiser's sample appraisal reports and gauge their clarity. Discuss the appraiser's proposed methodology (how they intend to do the work) to ensure you can understand them. That way, you know what to expect at the end of the appraisal.

Conflict of Interest

A conflict of interest might affect the appraiser's work and output. Ask the appraiser if they have any association with the property, business dealings with other parties involved in the transaction, or personal relationships with the other parties. For example, you don't want to hire an appraiser for commercial property that the appraiser also wants to purchase.

Turnaround Time

Choose an appraiser who can deliver the appraisal report within your timeline. According to bankrate.com , an appraisal can take between one and three weeks. The exact period depends on the property's location, the lender's scheduling policy, the appraiser's schedule, and the real estate market. For example, the appraisal might be delayed if comparable sales aren't readily available. East Coast Appraisal Service has over three decades of property appraisal experience in the New York City Metropolitan Area. Contact us for professional and accurate appraisal services no matter why you need to know a property's value.

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