At the National Association of Realtors’ (NAR) annual conference in Boston, speakers including John Torvi of Landy Insurance Agency participated in an appraisal forum titled “Demystifying Agent-Appraiser Communication: Law, Liability and Best Practice.”
The forum highlighted proper approaches for communication and cooperation between agents and appraisers, according to a release from NAR.
The event began with a panel conversation between Torvi, Lynn Madison (Madison Seminars in Schaumburg, Ill.), Melanie McLane (Jackson Real Estate in Jersey Shore, Penn.) and NAR’s Charlie Lee.
McLane stressed the importance of mutual respect between agents and appraisers while emphasizing the claim that neither party is ever always right, while Torvi reiterated the point.
“Just because an appraised value doesn’t meet the agent’s expectations, it doesn’t mean it’s a bad appraisal,” Torvi said. “As someone who works with both appraisers and agents, I hear both sides of the story. This panel discussion allowed for a better understanding of the valuation process to benefit appraiser, agents, sellers and buyers.”
Lee focused on clarifying the misconception that real estate professionals are prohibited from speaking to appraisers. In reality, Lee said, no rules or requirements on the federal, state, or agency level prohibits an appraiser and agent from speaking to one another during the appraisal process. However, Lee reminded Realtors that appraisers and real estate professionals have separate and distinct roles during the homebuying process.
“Real estate professionals (brokers, agents) have a responsibility to serve their clients, while appraisers are brought into this process exclusively to develop the best appraisal they can,” Lee said. “Still, real estate professionals are encouraged to communicate with appraisers in a professional and productive manner, as relevant information from real estate professionals may help an appraiser independently arrive at an opinion of value. However, and most importantly, a real estate professional should never communicate with the intent of trying to influence an appraiser’s appraisal.”
The group also highlighted regulations governing conversations between appraisers and agents, while panelists shared anecdotes to illustrate how to avoid liability on all sides of the transaction.
“NAR represents approximately 25,000 state-licensed and certified appraisers throughout the country. The forum was a valuable way for members to learn the right way to communicate with an appraiser without running afoul of appraiser independence requirements from some of the nation’s brightest minds on this topic,” outgoing NAR President Elizabeth Mendenhall said. “Overall, I am confident that the contents of today’s discussion will generate valuable feedback to the Real Property Valuation Committee going forward, which will benefit everyone in our association.”