28: Let’s Talk Appraisals

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We have a very special guest this week, Alissa’s dad and appraiser, Johnnie Allphin! Johnnie has been an appraiser and owner of Allphin Agency for over 40 years. He takes us through how he got into the business right out of college, what it takes to become an appraiser now, and where the industry is going. We learn in this episode tips for Realtors to help their sellers when it comes to the appraisal process. We even get all of our and your burning appraisal questions answered by Johnnie. As a little bonus we get to hear stories of Alissa as a kid and how she participated in the appraisal work with her dad at a very young age. Appraisers certainly aren’t beloved these days but this interview may open your eyes to the other side of the process and soften your heart to appraisers going forward.

The following is a rough transcript provided by Otter.ai.

Okay, I did something wrong. It’s broken. I hit the button to record it, it went away. Hi, y’all. Welcome to hustle humbly. It’s Alyssa and Katie and we are two top producing realtors in the Baton Rouge market.

We work for two different companies where we should be competitors. But we have chosen community over competition.

The goal of our podcast is to encourage you to find your own way in business to stop

comparing yourself and start embracing your strengths.

Okay, this is episode 28. Let’s talk appraisals. We’re going to talk about appraisals. I Alyssa have my dad here. And he is a residential real estate appraiser. Why don’t you really quickly introduce yourself and tell us how you came to be an appraiser? Yeah, yeah.

Okay. Well, my name is Johnny often, and I’ve been an appraiser, since about 1980 1978 1980, over 40 years now. Wow. How

old were you when you started? Oh, I

was just finishing college. So I was probably 21. When I started just getting started in looking into doing appraisals, went to college. Yes, I went to college. There was one course in college, it was an appraisal course. And Clifford Grohl on which is one of the masters of appraisers back in the day, he taught the course. And I fell in love with the concept of doing an appraisal, we actually got to appraise a small apartment building near LSU. And we appraise an old house older house, we actually get to go out there and gather the data, look at the properties do an apartment complex and a house. And I just love the way everything just mesh, especially on the income side, on an apartment complex looking at the rents and then you look at the sales of other apartment complex and you do a cost approach and how all those numbers came together and supported each other. And then we got to go look at an old house near LSU. It was actually on LSU Avenue. And going through one of those old houses, which just I love the old house, ya know, the old pier and being more of a craftsman, you know, the work that they did back in the 30s and 40s. Basically without power tools. Yeah. And in the in the trim and the craftsmanship and the little houses than today. That’s what makes them so popular. But anyway, that’s my only course at LSU offered. I took it and just really liked it now, coincidentally my dad who was just coming out of the service in 1955 ish, I guess which is about the year I was born. He came out of service, married baby on the way had no job. You know, he didn’t have any plans at that point. He got his Realtors license back then. And he was trying to sell real estate his his father was a realtor. We’re she’s fourth generation. So with that, he tried to sell real estate trying to you know, one real successful back in the day, it was just a whole different world. Yeah. So he got contacted by the VA back coming out being a veteran. And they were needing appraisers to appraise properties for loan, right. So they contact him said You know, we needed appraisers Can you do that? And he said sure, yeah. Pay me to do and I said okay, and they actually assigned him he was the first VA appraiser on their panel, his his. His appraiser number is oh, one stop. I’m Oh 97. So okay, 97 appraisers added to the panel? No, this is just the southeast region the Houston Yeah, but he is he is appraiser number oh one so cool. So he started, he would just go out and look at a house and I don’t know how he did they didn’t have an MLS back then. He would look at he would go to the courthouse and pull sales data out of the courthouse. It was a one page handwritten form. Oh, right, that you wrote the little description of the property, put some sales in there, and came up with a number. And that’s, that’s anyway, so that’s what he did. And then I came along my sister came along and as a finishing college he was by then he had had an insurance he was in the insurance business as well as did appraisals, still doing VA work. He had did also a lot of work for the DOD and right away acquisition work. And after I got out of college and just said, you know, I kind of like this appraisal stuff, you know, you don’t want to be an appraiser. I want you to be you know, you need to be in a lawyer. I don’t want to be alone. Any lawyers out there. There’s not many appraisers I really enjoyed the appraisal work that I did in my class, and I kind of want to do that. And so I kind of started the same thing. Back then they didn’t have regulations. They didn’t have licensing, right, just I are an appraiser. So I actually went out and did appraisals on houses I call friends. They cannot come appraise your house and I do measure it, I would put together reports and then I would contact clients and say look, I want to get on your paint your panel by and I would send them samples of my work. And then I started taking all the appraisal courses that the Appraisal Institute offered at the time, you know, they were like two weeks you went away for like two weeks Wow. And two courses pretty intensive you know, just the basic principles. Did that for about three or four months taking appraisal courses, and just kind of started doing work for banks.

You had to like hustle to get on certain banks lists?

Yes, that was always a challenge. You had to be approved by the lender. You also had to be approved by Fannie Mae Yeah, just send all your credentials to Fannie Mae once you start doing appraisals and they would get they would they would basically get you a Fannie Mae number and you were approved Fannie Mae appraiser, same with FHA. Same with VA you have your FHA approval and your VA approval. So I was approved by all major you know that Fannie Mae

banks that you’re you’ve been with?

Yeah, they change hands over the years. You know, some come and go but there’s somebody always comes along and takes their place

is that something that like a wine and dine situation like you had them like how did you

we brought them popcorn at Christmas? We did.

I bribed them with popcorn every prisoner. Like I think she told you that story once before and one of our podcasts we would load up the kid that had big old tins of popcorn like 30 of them Yeah, we were we would ride around and just drop them off and they loved it. But yeah, back then the banks got to choose their own approach right? The Realtors pretty much got to

market to real a lot

of realtor lunches back in the day and you don’t need to anymore can’t even talk to the

day away

really works best for us. I can

remember sitting in his office with a glue stick and I would because he would have to take his comp pictures on a camera with film right get the film developed glue the pictures onto the paper I love it and we would just glue them we have

to make everything in triplicate so it was every appraisal was typed on a typewriter and paper and we had to stick the pictures on the on the appraisal but back then you had three pictures you had a front or rear and a street saying now you have they want pictures of all your comparables they want interior pictures. We have usually have about 30 pictures in every

report. Yeah, okay, real quick before we move on. Did we even discuss that your listeners dad? Tell us before we ask you all these hard hitting appraiser questions. Tell us a little bit about Alyssa as a

kid. Oh man, people

are gonna like oh man.

Alyssa was always very motivated to make an impression. Haha. She always wanted to hurt she wanted to be recognized for the things she did. She was always coming up with ideas of how to get things done. Quick example. She wanted a dog one day she wanted a what was it?

I wanted to read a gray that had been retired. Oh from the racist Yeah.

Okay, so she puts together back in the day didn’t have PowerPoint but she put together those you know those big cardboard and she made pictures of Greyhound being rescued. And she did all these

things if you don’t rescue them. Did you get a greyhound? Well, we gotta we know. We either

did more. Or

she was you know, she was a she could present things like that. And it was very impressive. The thing that’s not

a good example because I lost

everything. Sure you’re not relisting. Right, right.

That’s true. Get them all. But surely you’re not surprised by how success Oh, absolutely

not. I knew she was always inborn. I always knew she was gonna do well. She always was a super achiever in school. Yeah. And always wanted to. That’s so cool. You wanted it

very good. Well, when I was in college, that’s when my grandfather passed away. And he was getting swamped with all the VA work and I was like, Don’t worry, I’ll get my real estate. I’ll get my appraisers license and help you right? Well, I went to go get it and you can’t just go get it. Like not anymore. And I was in undergrad so I couldn’t you had to have a college degree. And so I couldn’t become an appraiser. So I was like, I’ll just get my real estate license to have access to MLS and I’ll help you and then I’ll be honest, like and he knows there was a point where I was like, am I supposed to take over often agency like, this was his dad’s and it was like his, your dad right? Mom’s

no one I did no, no, it was just my is your dad, Grandpa they started. They actually started in 1928. Wow. went off and agency started by my grandpa. Yeah, I mean, my dad. You’re like,

my path, right? Like, am I supposed to do this? I was kind of feeling the pressure. But I’ll tell you like, it’s not my thing. It’s not where it’s me and my dad have a great relationship. But like when it comes to like measuring houses and being tedious and the details and he’s like, Alyssa, you can’t estimate you can’t guess. And but I just felt like pressure, like, maybe I should want this because my two sisters became nurses. So they’re not interested in real estate. But then I started doing well on the sales side. And I was like, I think I’m just supposed to be a realtor, right? And then my middle sister, who is like, so meticulous and sweet and attention to details, and she’s very soft spoken. And she just came to me one day, she had been a nurse, and she said, you know, Alyssa, I work three twelves a week. And that’s full time as a nurse, right? I really enjoy like the appraisal side of things, but I don’t want to step on your toes. If that’s like you and dad’s. And I was like, oh my god, are you gonna do that? Yes. So now she is working with her third year. Appraisal training. Yeah. Year three as a trainee. Okay. So let’s talk about that a little bit. Okay, like barriers to entry. Because to be a realtor, you could be a realtor in two weeks, if you really wanted to, I

have always said that Realtors should function more like appraisers, and that they should have to shut up someone and be an apprentice. I’m very annoyed that we do not have that in anybody. This goes really well with the episode about how to get started. I wish that you were forced to follow someone or not you really can do whatever you want. But you tell us what appraisers have to do?

Well, first of all, you have to become a trainee, even that’s not the easiest thing. I was looking I’ve got some papers here the newspaper, no just looking at it. To become an appraiser trainee, you have to have 75 hours of training of education courses that are offered by the appraisal foundation board or whoever. So you could do that online, online or in classes. And then you have to take 30 hours of other courses involving the use pap, which is a standards of appraisal. Okay, uniform standards of professional appraisal practice. Then once you become a trainee, then you have to actually go to work for another appraiser. That’s the only way you can possibly get

tricky here. Yeah. You’re basically training your competition. Yes, you train your competence. Sometimes they want to be paid for it, too. Yeah, they

typically because three, you have to do

the trainee, it takes three years as a training, right? And they want to be paid. That’s fair, I think,

a long time to go without being

it is. But you know, as an appraiser, I’m sitting here I’m taking my time to train now. We’re just taking me longer to get things done. And you can’t, it’s hard to pay somebody because they’re not really contributing anything to your income. Yeah, basically taking taking time, your time.

And then when they’re done, they go they go and get a piece of your business they take they take your clients as a thank you we’re gonna system may be flawed. Yeah,

but no. And the reason why I’ve never had a trainee and all my years is because I’ve always been a one man shop. Right? And I always like working by myself in my office, not having to supervise some Yeah, I just if I had appraisal, a big, there’s some appraisers out there that have eight or 10 appraisal firm, and they can bring in a trainee and have somebody kind of because they could potentially keep them right. And they can keep them on their staff. You know, it just didn’t happen when you’re not your business model. That’s not Yeah, I’m just a one man show. People. So you know, back in the day when I was working, we talked about, I saw your question, what is hustle? Talking about hustling back in the day we work in? Literally 18 hour day? Yeah, six to seven days a week, because I had to because

the business was good. Business was

good and had a lot of expensive but more expensive back then than we do now. had three kids in private school. Yeah, but money and so if there’s just no way you can bring a trainee along Yeah. And do that kind of

so in that three years that they were training, they have to document

they have to have personal again, you have to have a college degree. You have to have 200 hours of a core curriculum courses that the appraisal Foundation Board offers, are they reporting 75 days or after you get to 75? Okay,

so now you’re a trainee? Yeah. 100 hours

of courses today. And you have to have what is it 1500 hours of appraisal experience? Well, which is just a way to document that is like, for example, Lacey, my daughter’s working with me as a trainee, and we go out and look at a house together. She helps me managers, I let her kind of do her thing I kind of do my thing and kind of compare notes at the end. And she gets for every appraisal that she’s able to help me with. She gets so many hours credit for that. And she keeps a record of those

you have to write like the address what type of loan it was, was it a refinance, what bank what you did at that house? And how many hours

how many hours for that particular document? Everything’s

pretty serious. Yeah,

it’s very serious.

You have to, you know, some people will take some Luckily, I have a tremendous amount of volume to where she’s getting a lot of experience. Some appraisers that work in like the rural areas don’t have that much. It’s hard to get experience.

It would take more than three years to get

hours. You know, if you’re looking at that’s almost like 1500 appraisals, that’s 500 a year, which, right, well, that’s a lot. That’s a lot of appraisers. Wow. So that’s a lot of upgrades. So that’s an after you do that, you have to take an exam. And then once you do that, you’re you’re done. Now, when I when appraiser licensing first came out when I was taking it, which was in 1989, I believe. Basically, all I had to do was take a test because I had the I submitted my I had all the hours already, you know, appraising already for 20 years. Yeah.

Oh, I see. So I didn’t have to do anything. But it didn’t really exist. Right in that fashion. Okay, I

didn’t have to, you know, I did I had to document I had to give him my client list. Reference. I had to give him sample already been practicing. So back then it was very easy just had to take exam. Do you

think they will? I mean, this is kind of speculation, but the college degree part of that. I mean, do you find that important to?

Well, it says a college degree in any curriculum. Point Yeah.

Your degree in English appraiser. If

you get your Bachelor’s Degree in Arts and Sciences, I don’t know if that’s gonna make you good appraiser. But I guess it’s I think that’s something that they’re probably going to loosen up on because they’re not many appraisers applying right now. There’s been a lot of change in the industry. Now. There were a lot when it first came out, I guess probably. I don’t know the number now. But I’ve seen, like my appraiser number, my license numbers number 53. Was a 53rd appraiser certified to be licensed. Wow. There. I’ve seen numbers as high as 1500 1600. You know, so there’s a lot in this region that’s in Louisiana, and just in Louisiana, okay. Probably in Baton Rouge. I saw I did a list the other day. I think I saw like 150 names. That’s a lot. Yeah. But

we could probably name eight, right? We

looked at all on the list, and I probably only recognize maybe 20. Okay, well, some of the lacy was on that list as a trainee. So it’s anybody that has anybody. Yeah. So someone were commercial people. But a lot of people don’t know, you know, like, I’m a licensed Realtor. Right. For years. I’ve never even had a listing, right, waiting to get that first listing.

I can’t wait to hear what happened.

I take them all now. I know. Right?

It’s not fair. She’s costing me some money. Because yeah,

because he gets a appraisal request and on the listing or the buyer’s agent, he has to decline it. Well,

I would say that’s a conflict conflict. Good news, you’re not on my bad list? Because it’s pretty long. I don’t know if we’ll get to that. But how do you feel about that? Appraisers aren’t exactly beloved in the industry?

Yeah, well, we do. There’s some that are less like than others. True story, but there’s also some that will go the extra mile to help the realtors. And I feel like I’m one of those guys. That’s good. I will call a realtor if I’m looking at a property and I’ll ask them, you know, I think some of the questions you’re gonna ask is, are there any comparables, that you want me to look at your neighborhood? Not that I can use them that that is going to affect my value, but I don’t want to miss anything. Maybe you have that? Because I never turned down information. You know, it really drove me out of the house. Sometimes it’s brought a list of comparables. Well, that’s great. You know, I’m gonna, you know, I can’t say I will use them, right. I don’t I don’t read aloud to you. I don’t mean they weren’t saving. I don’t go into any discussion about value. I don’t go to any discussion. Yeah, I’ll use these comparables. Yeah, I just take them I say thank you. Right. I said I will give them consideration. As far as I can get. Yeah, because I can’t discuss the value with a realtor. I can’t discuss it with the homeowner, right? You’re just not allowed to do that. Yeah, it’s part of the process. So but I do know I never turned down information to somebody else. Okay. I

think that was the first question from a listener. Do you appreciate take into consideration the comps a listing agent provides? Yeah,

I do. I take into account that’s common practice in your some people will tell you, I mean, I can’t speak for all appraisers. But in your experience, they you say I’ve got Some problems you don’t feel like, I don’t think

they know. Yeah, nobody didn’t I kind of just had them say thanks for the information. They’re not gonna so it’s nice if it’s like nicely left on the counter or handed to you and then we leave you alone, but it’s not good to just follow you.

Do come to the appraisal. Yes. And then like, harass you.

I’d say maybe one out of 50 houses. Thanks so much. Yeah. Now a lot of times the homeowners they’re never home. Right. We’ll take you around the house. Oh, you stop and look at my new toilet. This is the bathroom. I say, Okay, thank you. Go this way, and they’re trying to pull me this way. It’s a little distracting having the homeowner there. Uh huh. I don’t mind having them. They’re sitting in the kitchen, right, following me around and just talking to me the whole time a

bit hard enough to measure a house trying to walk away some of these houses

are really difficult to draw a little plan when you’re walking through some of these four or 5000 square foot houses. Oh, yeah. And you’re trying to document everything. It’s hard to concentrate sometimes when they’re right there in here.

Do you have what speaking of like doing the foot? Do you use any kind of technology now that obviously you didn’t years ago

when your laser pointer,

which I haven’t used yet. But basically, I use the old tape measure, yeah, to do the outside rolls, I use a laser whenever it can be used to shoot Yeah, it’s really good for measuring second floor, because you don’t really have anything to hook on. So you’re measuring kind of interior rooms, you have to add for wall thickness. So it’s coming in very handy. And especially when you’re trying to shoot an area where you got a lot of obstacles in the way that you got to shoot over, it’s

totally interest the laser at first. And so for like 10 houses, he would measure it with the laser. And finally, he was

so proud of that laser, it’s just one

more little thing you got to carry with you.

But I know we tried the software’s before where you like draw it on your iPad, and it doesn’t.

I’ve never tried that, oh my gosh, yeah, you can’t

go backwards. So if you need to go back and edit something, you have to delete pretty much everything. And then it deletes the whole thing. And at the end, if it doesn’t connect, you have a problem. And I say

I draw it on graph paper, I measure it and then I get back in office, they might have a program that I that I’ve drawn on the program and it computes the square footages and puts all my room conventions and everything in there. Alright, so that’s nice. That’s been a big help.

All right. Hello, humbly friends, you as you have asked us. You’ve been asking, and so we’re going to do it. We are going to sell our email templates. Hooray, yay.

This is big news coming in March. We don’t have a date yet. But it is coming in March. And you guys are gonna love it. And maybe if you’re like me, you can fire your assistant. Yeah, as quickly

as we can get it done and ready for you. You will be able to purchase it. That’s right. We’ve just had a lot of email requests, asking for it. Yeah, there’s a little bit of a waiting list. Agree. Yes. If you would like to be on the waiting list. You can email us at hustle humbly. Podcast. yes@gmail.com. Yes. And you will be notified when it is ready for sale. Love it, but it will be in March. Yes. Okay. Anything else? No, that’s it. Okay. Bye, guys. So we had we had someone say, What’s the best thing a real Realtor can do to help you get the value out? That Val Yeah.

And one of the biggest things that they’ve been, it’s kind of a pet peeve of mine is when they say, well, you’re gonna have to leave the neighborhood for sale because the sales in the neighborhood don’t support the back. And that’s a red flag. But I’ll say I don’t say I will do that. I can’t do that. I just say I will take that in consideration.

Something that a realtor could do a whole list of upgrades.

Lists. Yeah. Any list of upgrades if done especially if the homeowner is not they are unable to just tell you what they are. Yeah, and we go by kind of year What have you done in the past five years? That’s the biggest thing. Oh, that’s

a good tip. When they say the roof is 15 years new doesn’t matter. Right. Five year upgrades.

I have your upgrades is the big thing. Because in the appraisal report, it actually asked you was the kitchen updated one to five years, five to 10 years gives you gives you ranges in saying with the bathroom, kitchen and bathrooms. On the appraisal report. Those are the two things that they’ve specifically asked for some

value for that. Yeah. And that’s good because we’re always hard on our sellers with kitchen and bathroom.

That’s the two biggest things He biggest ticket items that help improve the value that help the

value. So there was someone that asked how much value than this wasn’t on your list. So how much value do you give to certain upgrades to adjust comps? But I guess my question to is always have that seller with the $25,000 patio edition? And I’m like, bullets. You just a room? Yeah, right and some concrete. Right. Right. Well, I appreciate that was very expensive for you to do. I don’t know that an appraiser isn’t gonna give you that value.

And almost every question that you asked on that regard? The the answer is going to be it depends. It depends. It depends on the quality of the addition that depends on the neighborhood. Right. And it’s not there’s no is this is not a it’s not like a rule. Yeah, it’s not a rule you get you get $2,000 for that you get 10% for that. You look at the neighborhood you look at maybe a saleable the way we make adjustments is we look at what homes had so far that had this feature, versus homes that don’t have the feature. Okay, that’s basically how we value a swimming pool. Right? You have two houses that are side by side. And they say they’re very similar in all respects, one has a pool one doesn’t. One house sells for 200,001 house sells for 210 and the one with 210 as a pool, right? That pools worth 10,000. Right? That’s a simple way it’s very easy.

And that’s like the definition of comparable sale analysis. I

just call paired sales on that. It’s called paired sales analysis. That’s where we get our adjustments from

okay. So it all depends on what neighborhood that we might see

the house with the pool selling for 10,000 less, right, that pool has a negative value. Oh, how

does that happen? Well, you’re

in the neighborhood liner or you’re in an old neighborhood that people say I don’t want that. I don’t want it it’s an expense to me. Okay, so maybe there might you know in a neighborhood where the homes are $120,000 You don’t want to write you don’t want Yeah, so a pool can have a negative effect and again, the type of pool it is if it’s maybe need to prepare but today or if

it’s three if you find three comps that all have pools, you don’t necessarily get

I’ve seen where they you know look at three comps, but these are all Bruce similar home, what two of them had pools, but they still sold for the same price as the other. So they’re telling you the pool has no value. Oh, the pool.

Sellers aren’t gonna want to hear that

they are and be amazed how many sellers realize that price pool importantly, they walk in the pool and any value doesn’t. I said? I said it depends, right? It depends. It depends.

I mean it would you say that appraising is somewhat subjective.

It is very subjective, although I try to stay as objective as I can, right? Because I walk into a house and I see some weird things. And I try to go well, I’m not gonna let that bright orange or that,

like, you know, doesn’t affect you.

Right? It doesn’t it but it is very subjective. As far as putting, you know, looking, there’s 10 comparables, I’m going to pick three comparables ago, my report, surely, yeah, but I try to pick the most the three most similar comparables to my property,

you’re gonna pick the other ones ahead, I believe paint, right, if they’re probably

sold for less because buyers can’t see past?

They do? Sometimes they don’t. But yeah, it’s in having the interior pictures of the comparables is really beneficial, because you can kind of look at how other houses look on the inside when they when they were listed. So it is I do look at all the interior pictures to see what’s trying to compare similar, the most similar to the house. Okay. All right,

I could have written 100 questions for you, I just want you to know that, but because I’m fascinated one by the whole process and disenchanted by most of it. What I was gonna say is what, like, would you say that I’m wrong and saying some appraisers are more conservative than others? Or do you find that everyone has an equal level of objective? And I know you can’t speak to every appraiser out there, but I, I just know that when I see some names, I’m like, oh, I want to see other names. I’m like, Okay,

I don’t get that end of it, because I don’t see their work right. Now. I have to admit, there are some appraisers that have the reputation reputation of just, you don’t want him you don’t want don’t want him. He’s going to look at every little thing to make the deal. So and, but I’ve never I mean, it’s been a long time since I’ve heard that.

It’s tough because you could have five appraisals done on one property, and they might all be different, right? Yeah. Yeah. Hopefully within a range,

size range. And I used to do a lot of relocation work where we had, you know, two appraisals done on the site. Oh, right. And they would, you know,

do they tell you the difference?

Typically, they don’t know. So you know, but you gotta realize if you have another appraiser, you’re going to be trying to

write your humans Yeah. But do things differently. When it comes

to measuring a house I can measure probably as a house three different times and but with slightly different depending on how and rounding and the more complicated the house is the bigger variance you have on square footage. I do see a lot of errors in MLS on square footage.

Yeah, let’s talk about that. So we had someone asked like what can Realtors do to help the appraisers? What what what do we do that complicates your job?

What do we what do we do it?

Help us help you?

Well, what really helps is feeling is when y’all do a sale and MLS be as specific as you can I know you’re trying to sell the house in MLS trying to really make it Fluffy, fluffy. And then but and then we try to be as realistic as you can, putting in the pictures. The great interior pictures really helps front back, you know, seeing all that

he means to like the ones that we sold that didn’t that were before list, right? So oh, so and so processing? Yeah. So

for processing, we see and it looks like a good sale, but there’s zero, right? So no photos, no photos, no description, no description of what it was did it was it updated? Was it? Sometimes they don’t even have it that’s got a carport or garage? And we

use that at all.

I call the agent on you. Yes. And it’s above and beyond. I bet. Well, that is so I will call you so look, you sold this house to me. But was you’ve already got it sold. So you don’t gotta flip

it true. Yeah. So it was

kind of a dog it really needed updating. Now, even though I wouldn’t have said that in the Listening Yeah, but

don’t you wish descriptions were written? We need to do like a funny episode. Like if it was real, the real. Oh, yeah.

Oh, that’s good.

Okay. No, that’s so funny. That is again, realtors helping by, you know, first of all, you know, filling out information on how homes that they’ve sold. But as far as the specific house that we’re appraising again, I’ll be happy to look at comparables, anything you have up a list of upgrades I’ve done to the house. Again, we all look at all that.

You mentioned, too, that y’all have had trouble with the higher end luxury homes not being recorded properly because of privacy. Yeah,

that’s a big issue. Right now, especially, there’s not a lot of sales of the upper end homes right now. Because there’s kind of an oversupply way over. So why. And we say, Oh, we see a house, it’s sold. And we look on that. And it’s $10. Plus OBC. So I know that people want their privacy. If it really it’s, it’s a sale that we can’t use. Yeah. And it’s probably one of the best sales we need, because

it seems long term that would hurt the property value of the luxury market, because there’s not

Yeah, yeah, we’re not Yeah, we don’t have the INS probably, you know, the people didn’t want their record or they don’t want to see how much they got for the house. They probably got a lot for so it’s probably a very good. All right, it’s a good comparable, so Well, that’s it, we’ve seen kind of a trend of that starting now. I’ve seen probably five or six in the last year, and there’s not maybe 10 or 12, they sell altogether. Right? Right. So I know that is something that you can stress to your higher end buyers. It’s just nobody’s really gonna care. I mean, nobody’s gonna be looking at this other than professionals, writers. Yeah, I’m just gonna stay confidential with them, you know, we’re not going to be putting them on a billboard. Right? So just, yeah.

So why do appraisers need a copy of the purchase agreement? It seems like it’s a non it seems like a non biased opinion would be better.

Ah, well, first of all, it’s not the appraiser that requires it. It’s it’s actually use pap, the people that made the rules on appraising lending. And I’ll give you an example. It says this is this is a use pap book, it’s about probably on a reader says, it says when the value opinion to be developed is market value. And appraiser must analyze all agreements of sale options and listings of the property as of the effective date of the appraisal. So we’re required by our regulations to get a copy of the sales contract, it makes sense when you say it that way. Again, a sales contract is relevant because it tells you that somebody is willing to pay that for the property now whether that

Mark does not get some sort of weight in your report and

really give weight it just tells me that somebody’s willing to pay that so yeah, and

somewhere a buyer and seller agreed on this price

that leads into this is sort of perfect with that if there were multiple offers on a property does that play in so now you

will offer a much more significant than having a single off okay, because according to the definition of market value, market value simply in very simple terms, what is the most likely priced that property will sell far if exposed on the open market and you have a informed buyer or an informed seller? Now, if you got three offers to A $300,000 On the same property, one might be a cash offer. And I’m appraising it and I’m seeing what comparables are only looking at 290, I don’t I don’t understand why you get. And so I say I appraise it 1490 Will my buyers gonna lose out on the house because his deal is going to go away, the next buyer is going to step up, he’s got a $300,000 offer is may or may not have appraised his if it doesn’t his his offers going away. So then you got the cash buyer coming up, he’s gonna get his deal because he’s paying cash. So the most likely price at property to sell for $300,000, which is a definition of market value. So that is why the multiple offers are very important, but they have to be realistic. I mean, I’ve had realtor, we have five offers on this house for overpriced. I said, Can you send me those? Well, we don’t have them in writing.

Yeah, you know, y’all want to see them? We want to see I want

to see what they are. And that tells me that okay, because what

if you got one for 302? For 250? Yeah, right, multiple offerings. Okay. And so y’all would actually want to see the documentation.

Yeah, we want to see the documentation because, and again, there’s something I might be missing a house. And again, it doesn’t happen very often. But I will actually call an agent and say, look, there are a couple of houses that are listed in the neighborhood that are less, why are these people paying 300? For this one, right? And she’ll say, Well, you know, the backyard has this wonderful backyard. And I just think that I saw, but I didn’t really equate to value. Yeah, because I’m more of an objective objective numbers guy or gave it value. Right? And multiple buyers gave it value. Right? Right, if that’s the case, and there’s probably a reason to try to get that, you know, give them value for what they’re saying. Okay, but it’s one offer doesn’t always do it. Okay. Multiple offers are very important. So if you do have multiple offers out there, and they’re documented, and they’re above sale price, or I’ve seen property sell for more than your listing for because they were better, they were better. multiple offers. That’s

one of them on here, and that’ll go off of that. Do you ever appraise now I was around before the crash. So I got my license in 2005. Okay, so I remember when they drove by, I was like, check, check your good. Everything’s fun that house is there, right? You want to buy for 300? And go on do it. Right. So I know the difference. I know the pendulum like where we’ve gone, right. But my question is, do you ever currently appraise let’s say, you look at all the comps and you find the best ones. And you’re like, dang, I mean, this house is worth 20,000 more than what happened. Do you? Do you put that number?

Absolutely. I appraise it for what I think it’s worth what you think it’s worth what I think is worth and it happens in a case where you’ve got a unique house sure that maybe you’ve been on the market for like a day, right? And you take the first offer, right? And you’re in a neighborhood where the typical house sits on the market for three to six months, and also on the market one day and they’ve got three offers. It was probably underpriced. Yeah. So

it’s kind of does the bank ever kick that back to you? They are fine

as long as I mean they don’t care what my value is. As far as in relation to the sale price they don’t care they don’t argue

what kind of things will a bank kick it back?

I have very few appraisals kickback reason why I’ve been doing this for so long. Yeah, I know what they’re looking for. Yeah. And if there’s something in an appraisal that needs explaining right phone or write a narrative explaining that anything I feel that might confuse somebody in an appraisal. Why did he do this? I explained it preemptively.

Like using farther away yeah,

sometimes going back over six months for comparables and I’ll go well, the bank will send me a thing if you don’t make any explanation. They say why are you using comparables over six months old? So I’m appraising say in your subdivision here and there aren’t there are no comparables within six months and there are really no subdivisions that are comparable that are within their nearby that are nearby so it’s an I put it in and explain that and then I’ll say it’s better to go back six months and stay in your neighborhood Yeah, and you similar sales with similar location than to try to go to you know Country Club Louisiana or go to Santa Maria right to compare it to maybe a non competitive location simply to get more current sale. Yeah, so and I

put they really kicked back mostly on going back longer than six months or going outside

making adjustments for such things as say you got a house that doesn’t have upgrades I mean, your your house has upgraded your appraising to your comparables have not been upgraded, and you make an adjustment for condition or quality adjustment for those comps. Right if you don’t explain that they’re gonna go Why did you do that? Well, this house had an updated kitchen bathroom had granted here they’re there. Other comparables were older homes didn’t have any updates. That happens

a lot. So if you give a $25,000 adjustment, they just want to know why

you want to know why. And you bet To be able to explain why it comes down to where do you get that number from? And that’s based on just again, a paired sales analysis. And what’s really been supporting this is like areas like ever since the flood. There’s been so much data on homes that sold that haven’t been updated and homes. It’s so right it has been updated. Right. Sherwood Forest is a prime example. Yet homes back you know, before the flood 3040 year old homes and formica countertops, vinyl floors, and those houses didn’t flood some of them didn’t flood now, some of them did flood. And now they have brand new, renovate all and the homes that didn’t flood are selling for 150, the ones that are have been updated and are selling for 200,000. Right? It’s telling you that we’ve got a we’ve got a good basis there to show what what kind of value upgrades are bringing to the market. That’s

interesting. That is interesting. So if we get an appraisal as a realtor, and it’s low, okay, and we want to dispute it. What does that look like on yalls? End? Because we don’t get to talk to you. Does the bank notify you that we’re disputing it? And do they do we? Do they give you what we gave them asking for a disputed? Have you done that? I have I have to but I’m not sure what it was like on the back.

What happened? What did you do? I

went through and provided some comps that weren’t used that I thought could you help me Okay, all right. We went to lunch and I was like, Okay, Dad, I got low appraisal. And I feel like I do feel like it was wrong. And we just went through and we found the comps that I thought should be used. And I explained why some of the comps that were you shouldn’t and noted upgrades that weren’t given any value. And it was submitted to the appraiser. I gave it to the lender, right? Yeah. And I guess the lender gave

the appraiser and said you’ve had a you know, you know, one of the discussion Yeah, just be speed on your value, and they want you to consider the sale. Some appraisers are just kind of go, nope. Trash and go. I’m not changing. Again, I will look at it. If I will look at those comparables, you know, why didn’t I use them to begin with? Gotta be a reason. If they’re supporting the value and they’re in the neighborhood. why did why wouldn’t begin with? And if I feel they are justified, I will be the first one to say, yeah, these comparables. I’ve never I’ve never had to do that. You never, I never had to change my problem. He’s

a very good appraiser.

hotel prices,

we ran out of every 10 appraisals on average, how many would you say don’t meet value? Or is it just

Oh, I’d say out of maybe out of 51 out of 50.

There are appraisers that one and 10 Don’t and then maybe two in tendo. There are appraisers that every time I get them. It’s low every time regardless of that, like so. It’s why I say some pleasers are conservative and summer. Well,

one of the questions from our listeners was Do you feel that tight regulations are holding values down that it’s keeping the appraiser from being able to give full value?

No, I don’t think regulations have really anything to do with it. The regulations aren’t in telling you what you can and cannot do with comparables you can and cannot use, the biggest thing that influences values is supply and demand. Right? If you got a oversupply of houses and low demand, you’re gonna have declining values, you’re gonna have low values, if you have a shortage of homes and a high demand, you’re gonna see higher value. So it’s not really the regulations. Again, I think it’s just it’s just you know, that because the regulations don’t dictate how you actually select your appraiser, right comparables, things like that. But in your case, Did anything come of it?

Did it? I think they increase it by $1,000, which we were like, 10 off. Okay. So it helps sometimes micellar Yeah, so but I have disputed before where we got

Yeah, and I’ve had I’ve had people dispute it. But I said you know you sent me three comparable appraising house and Tara, you sent me two comparables injection place,

right. Right. Doesn’t work doesn’t work.

So and I’ll put a an old writer narrative back and say, I’ve looked at the comparables I didn’t feel they were, I felt the comparables that I use were better comparables and better indicators of value for my for this property, and, therefore no changing values indicated.

What do you think about pre listing appraisals? I personally am not a fan of them. But what do you think?

It’s not a bad idea? It kind of tells you what an appraisers opinion of the value is going to be. So if the sign is worth 300,000, chances are, you’re not going to get 350 for wasting your time.

I guess it could be used if you need a seller,

I think seller back down to earth. Yeah, it’s

a unique property. Yeah,

I don’t do many of them back because I’ve my banks keep me so busy, right. But on the occasion when a realtor does call me, I find it’s a very difficult prop in your price, right? Like maybe a very unique or unique house. And it’s like a house and Broadmoor that somebody was calling about. It was a custom custom built house by a guy that owned a brick company. No. Like it was all. It’s like a $40,000 house in Broadmoor. And it really sorry. Yeah, it was I didn’t ask it now. I’m like an appraiser.

I declined. I think you

don’t need to hit a counterpoint that

well, what are some of the challenges that you feel are facing the appraisal industry and what changes are occurring right now?

Oh, I guess the biggest change. There is a lot of Fannie Mae throws out a lot of stuff that they want you to add to appraisals, they come up with these ideas of new forms, new formats. There’s something going on right now that’s really going to have to me a devastating effect on the appraisal industry, if it happens is they’re wanting to have this process where the appraiser stays in his office, never leaves his office, that third party goes out and does the inspection on the house, measures the house gives you the information gives you the information. And then you do the appraisal based on that. For what reason? Trying to figure that out, they’re thinking it’s going to streamline the appraisal process make things faster. I just don’t understand this is being pushed by the government, either Fannie Mae, it’s a pilot program that they’re, they’re pushing right now. It’s had its head of resistance, every appraiser I’ve talked to said, This is insane. Well, you can’t Yeah, with your own. You have to see it. And I don’t think you know, a whole lot if it happens. I mean, thank goodness, I only have a few more. Because I’m not going to do I mean, I understand you do have the choice, when they send you. This is really how’s it going to speed it up. They send you the information, I understand you have the choice to accept that or go out and look at it yourself. Oh my gosh. Oh, so they’ve just hired an inspector, they

say who pays for that the buyer? The buyer does. That’s no good.

Yeah, yeah. So when they’re gonna cut the appraisal fee, because, well, you didn’t do the inspection. You didn’t have to go out there. So you cut your fee in half and get half to the inspector. But I was absent Lose My Mind if I couldn’t get out of the office and go and look at how Yeah, that’s not what

you signed up for. So it’s kind of ending on that note? Yes. Like you are your own boss. And I was telling Katie, like, I can remember growing up. You know, mom is corporate America always had a corporate job. eight to five, I can remember her heels clicking while we were eating dinner, she’s walking in the door. You were the one that was at the field trips, mostly. And could come to stuff because if you needed to work from 5am till 7am, or, you know, 8pm till midnight, you could whereas mom has to be at work. But yeah, what do you think? I mean, you grew up three girls, you could? I mean, what did hustle look like when all three of us were in private school? And you could had to make it work?

Well, again, you hustle, you work basically as hard as you have to when you need to, I mean, right, you know, and I needed to a lot back then we had a lot of expensive in the private schools. But again, I was able, you know, so your own boss, so you can do whatever you want to do. I say, Well, I can to a point, I still have to get appraisals back to my clients in a timely fashion. When I get an appraisal order, they give me a due date, they need it back on this day. And you don’t get it back on that day. Over and over again, you’re going to not be on their listing, I will get fired. So I don’t have a boss, I don’t wanna get fired. I do have a boss. I mean, my, my clients take you off if you decline, but I can, like I say, I can get up at five and many a time I would get up at five in the morning work till nine, go on a three hour field trip, come back home work till midnight again, you know, so you have your own hours, right and so that’s why I never

had any trouble self motivating yourself to to work.

Sometimes it was really tough. You know, getting up and stay going, Yeah, go on work at five o’clock in the morning and saying I and I actually moved my office home to make it because I was just paying rent at an office that I really won’t use that much because I was doing a lot of stuff at home might late at night. I said Why am I so I moved my office home. It’s a hack. Can you do that? I mean, it’s like you would just never you would just hang out watch TV and you know in play. I said no, I said, but there are times when I just say I just don’t want to go in there, you know, for 12 hours. I go have dinner, right? I just don’t want to get back I don’t want to go back and I Did it a long time I don’t do that anymore. I

pretty much keep it your business consistent. Now I’m much more consistent turned him away. Back in the day I never turned down on I’ll say your hours are a little bit more fixed

a little more fixed, little more flexible. I don’t do the volume of work and you’re back in course fees are higher. So that’s good, right? But I still do enough to where

and you don’t go super far away anymore unless

you’re like in a little bubble.

Long distance I used to go to St. Francisville all the time, right. It’s a hard market. I used to go to Donaldsonville used to go to areas that are very hard to appraise. A lot of times when you go to other areas like that, you have to go visit other appraisers to get help. Oh, wow. You don’t like it coming in their territory, right. What do you do? I need some comparables. Now what did they hire me to do? Right? Well, yeah, but no, most of them they’ve always been very helpful. But it just, there’s enough where I cover for parishes like over East Baton Rouge, West Baton Rouge, Livingston, and essentially, all those deaths within a 50 mile radius. So it’s,

you have plenty of work that way when you work. Perfect. Yeah. Well, anything else?

No, but like I said, Maybe there’ll be a part to one day. Yeah, I’m full of questions. I

know. We could talk about this all day. Okay, I think that’s it.

You have a toast right?

I do have a toast this is I take me ptosis Am I still not worthy?

This will be our first one. I would

have to say that my dad got me in this business. Wouldn’t for him listen, I would not be here in the real estate business. And he was always he always guided me in the right direction and motive motivated me to get things done. He was always behind me getting the coursework done. You know, you need to do this. When he when he found out I wasn’t going to be a lawyer. He was okay we’re going on the appraisal route. This is what you need to do. But anyway, I wanted to talk to him.

Okay, what went on off and on? Okay, what did what is grandpa name pop off

pop? Oh, so tasty. Alright, well, cheers. Cheers to pop off.

Yes. Love it. Awesome. That’s it.

That’s it. Well done.

All right. Thank you so much for tuning in to the hustle humbly podcast. Let us know who we should toast to for the next episode. Be sure to

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Two Realtors fostering community over competition through light-hearted conversations.



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