Are Realtors & AMC’s Killing the Home Valuation System?
Are Realtors and AMC’s Killing the Home Valuation System? In a word, YES!
Many Appraisal Management Companies are now demanding that appraisers change the square footage details listed within their reports. Why? Because they saw a different number on Zillow® or in public records. How have we gone this far wrong?
Appraisers generally turn first to their own files for square footage details. Next, they turn to the MLS, which is touted as “the most trusted source of real estate information in the world.” Then, if there are no other options (like in the many areas where the MLS does not report any square footage details), appraisers are forced to turn to local tax departments to get their square footage details. And often, those details change home values, dramatically. In many states the governing real estate authority clearly states that agents should NOT rely on the information in tax records. Anyone who has ever worked around the real estate industry knows just how unreliable tax numbers can be. Those square footage numbers were created by and for the tax department, NOT to be used in the real estate industry.
Companies like Zillow® and Trulia®, etc, most often get their square footage details from those same public records, that everybody else seems to know are unreliable. Then, along comes these appraisal management companies, where unlicensed people are trying to dictate what highly trained experts decide to use as a source for their square footage details. This only makes a declining system worse!
It’s time to stop this madness! It would seem to be in everyone’s best interest to have the most accurate real estate information system humanly possible, so our real estate and appraisal industries can function consistently and fairly. In order to achieve that goal, every house listed in MLS must be measured by a licensed appraiser, and the square footage details listed (by level) within the MLS. Then, we can get back to having fair property comparisons and quality appraisals.
All the talk about liability and agents not wanting to report square footage is just an excuse. If they are going to be compensated as experts, and best represent the home-buying public, they should demand the best possible information. It’s time for the National Association of Realtors® to create this one new rule. Consumer protection would increase dramatically, overnight. This is not rocket science. We live in a price-per-square-foot world and without accurate square footage details, our system simply doesn’t work. If you think price-per-square-foot doesn’t matter, check out any online home valuation service or look at any agent’s CMA. One of the main pieces of data – price-per-square-foot.
Size does matter, and it’s time to put consumer protection back in the home valuation process.