Daily Archives: November 27, 2009

Real Estate Appraisals taking a bit longer?

I’ve been talking with some agents this week about the new ACT and how it has effected their workflow, if any……….since it came into operation, last Tuesday.

Some have stated it has added quite some time/content to their listing presentations, and some have suggested even more to their prep workflow……most specifically at the appraisal stage.

I’m actually surprised to hear this.

Why?

Well mainly on account of, that to me, it obviously indicates a difference in timeframes when compared to that which used to be dedicated to the same task, a very important part of the whole Real Estate selling process.

In reality nothing should have changed, it should not have been any different than prior to to the 2008 ACT coming into operation. It still takes me at least 3-4 hours for a full appraisal, nothings changed there. I’ve explained a couple of times before what I do…………so won’t go over it again here.

So I sit here this evening, and ask the question why?

Why has it added extra time to an appraisal?

Other than extrapolating your agencies “Client Communications Procedure” (or REAA’s equivalent), handing out the correct REAA booklet, and a couple of questions re any known faults with the property, or any knowledge of a leaky home, and an extra 20 seconds to get the owners signature, then not a lot has changed.

Fines – if you do something wrong / unprofessional / inappropriate ~ well yes they have changed, and about time.

And re the commission estimate you need to provide in writing on the Agency Agreement sheet, you would have already had that jotted down somewhere, or in your head anyway…….so that’s not going to add any undue extra time either………..because you already are aware that buyers are always keen to know what their Nett $ will be.

A quick note on leaky homes is due here……….don’t forget that even in cases where the owner states NO to the leaky home question, or any acknowledgment that the property could be vulnerable, you must show (& I suspect, be able to conclusively prove so) due diligence…..in regards to disclosure to customers.

Huh?

If it can be argued (and unfortunately that could be lucky you in a court situation helping to establish some case law here**) that you, in your capacity as a Real Estate Professional………along with your many years of knowledge/experience should have had your radar “blipping”, when you noted it was a 90’s home, and evidenced a couple of suspicious signs, or had prior knowledge that neighborhood homes built the same way, in the same year were leaky ………..then you may be called upon later, to be able to show where you clearly demonstrated that you were 100% clear in your duty of care.

As Steve Koerber has said many times before, you will need to have advised (and possibly have proof of that) any potential purchasers that you would recommend they get an independent 3rd party to check the property out first. (or at the very least, have it as a condition of sale)

Its actually a bit disappointing that there seems to be a distinct lack of details on the REAA site that talks about such obligations on customers to disclose such relevant info to licensees.

I’m curious about the extra timeframes some have mentioned, because to my way of business the new ACT has added no extra time to my appraisals, and just a short amount of time, say 5-10minutes to my listing presentations.

** – sooner or later this will happen and examples will surely be made. After all what lawyer doesn’t want his name to be mentioned in future textbooks.

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