Realtors® Giving Too Much Power to RPR®

AppraisersBlogs

AppraisersBlogs

AppraisersBlogs Team at AppraisersBlogs
Have questions or need help? Please contact us with any comments, questions or concerns.
AppraisersBlogs

Latest posts by AppraisersBlogs (see all)

Price Based on Computers Being Relied on By Realtors® A Growing Trend….getting a suggested listing price based on a computer and not a licensed professional’s skill, is the new trend and it is very bad for consumers….

“Since then, we’ve become RPR’s biggest fans. It has helped grow our business because it has given us more credibility.”

A recent article talks about the benefits of using the Realtor® edition of online home valuations. This growing trend is frightening for home owners as more and more agents rely on computers to price real estate instead of using their time, skill, and research to calculate home values the right way. When it comes to determining the price of most people’s single, largest, lifetime investment, shorts cuts are NOT a good idea. Money matters, and getting a suggested listing price based on a computer and not a licensed professional’s skill, is the new trend and it is very bad for consumers.

“That first phone call is critical, I’ll immediately pull up RPR on my tablet and start researching the seller’s home while asking questions at the same time. I quiz the seller to confirm the home’s basic facts such as number of bedrooms, baths, square footage, etc.

Stop the presses! This is a licensed real estate professional, responsible for pricing people’s homes and financial futures, that proudly announces to the world that she accepts whatever information she can find online, or better yet, that the seller provides her. Just WOW! The square footage totals agents rely on are one of the most important items when it comes to pricing a home. Tax records are notoriously inaccurate, and how are the owners supposed to know what size their house is? Most know what is in tax records. The “Official Record” for square footage is a myth started by an agent that didn’t want to be responsible for measuring a house. I actually don’t think agents should measure houses. They can’t be experts at everything. However, finding the correct square footage is a vital part of pricing the house and providing that data has always been part of the real estate agent’s duties. Ask 100 home owners where their agent gets their square footage total and they will tell you – that’s part of the agent’s job.

Agents say square footage is not that important and so they can use tax records to get close enough. On the one hand, they say square footage is not that big of a deal. But, then you look at every CMA they create and there you have it – a price-per-square-foot formula used to price the home. You just can’t have it both ways. It’s either important or it’s not. The fact is – if you change the square footage total used in the price-per-square-foot formula, you change the listing price. Often, by tens of thousands and much more. It absolutely changes home values and this is not just a number, it’s real money from real home buyers and sellers.

If Realtors® want to use RPR, more power to them. The graphs are wonderful. But, if you (or your computer) is going to use a price-per-square-foot formula – then have each listing measured BEFORE you give the owners a suggested listing price. If you don’t, you’re cheating consumers every day. Not an opinion, a fact of the real estate business. Size does matter!

Hamp ThomasBy Hamp Thomas, founder and president of the Institute of Housing Technologies. He is also the president of Carolina Appraisers & Real Estate. He is the author of the American Measurement Standard; the Size Matters – Residential Square Footage books, continuing education courses (for agents and appraisers), the course Inside the New Appraisal Process; ANSI, Home Measurement & the Power of Price-Per-Square-Foot; Understanding ANSI, and numerous other real estate courses, webinars, videos, and blogs. Hamp also authored the Professional’s Dictionary of Real Estate Terms; Home Measurement Basics; Realtors and Square Footage; and his latest book Death of an Industry-Real Estate Appraisal.

AppraisersBlogs

AppraisersBlogs

Have questions or need help? Please contact us with any comments, questions or concerns.

You may also like...

6 Responses

  1. Fritz Vogel says:

    Your lucky to have agents even try to utilize Public Data for GLA and room count. That would be a great improvement in my market. Most are Zestimates, Seller quotes, or pulled out of the air numbers. I’m lucky to have great Tax records online. They are almost always within 2-3% of my final fiqures (adjusted for interior GLA, Tax data vs exterior, my data)  Utilizing the Realtor driven RPR is insanity at best, the poor consumer. Why should Realtors even get a license if they are too lazy to determine there own values without a database matrix derived from a Garage somewhere in Idaho using bad Realtor data to begin with.

    5

    0
  2. Baggins Baggins says:

    Per MLS Corelogic Matrix, the tools are common. With matrix you can automatically get a 3 up insta comps estimate, a realist avm value estimate w/ range, and import all data automatically. Agents don’t have to do anything except rely on automation if they so choose. This is the Corelogic method. The initial roll out of the Matrix had an option where agents could enter where they acquired size data from; measurement, appraiser measurement, or online data. I think those were the three options, can’t remember for sure. One time I ran across a home mis stated size, basement included in agla wrongly. Agent had stated the appraiser option measure and I challenged via MLS to prove it. The MLS removed the option for everyone shortly there after. Agent did take the opportunity to cost me the client though, apparently him and the mb were cozy customer steering partners. An older realty lady told me just yesterday they’re having problems with competing agents who don’t even inspect properties, they have unlicensed people do that then just list it. Such a process of not actually having to go there yourself to provide professional services should not be allowable for either an appraiser or a realty sales agent.

    3

    0
  3. Wayne Courtney says:

    WHAT TO DO WHEN THE APPRAISAL COMES IN LOW?  You are one of those unlucky buyers who searched the world over and finally found the home of your dreams only to have some nitwit appraiser come in LOW and kill the deal. What should you do? Well turn to the real estate professionals! Look on Youtube for one of dozens of videos where the real estate agent explains how appraisers may need the seller or buyer’s help! Of course YOU will need to provide COMPS to this novice appraiser who obviously cannot find these on his/her own. You need to explain that you replaced the water heater four years ago. On and On and ON. Do a Youtube.com search for: What to do when the appraisal comes in low? Once you read how appraisers are perceived by real estate agents, mortgage brokers, etc. you will understand why we have problems bigger than should the portal fee be disclosed. Really, watching some of these folks explain how every “low” appraisal is just because of an untrained or inexperienced appraiser. If the appraiser does not live in the area he/she is suspect. Only your trusted real estate agent can provide the guidance needed. “We could provide the right comps to the pitiful appraiser but we are not allowed to discuss this with them”. Therefore you the buyer, seller, candle stick maker and anyone else should complain to the lender, the state, the whole damn world about this injustice! Ok, LOL…I put it on a bit thick but you get the point! Please look at a few of these videos before you comment.

    5

    0
    • Baggins Baggins says:

      It’s the same tedious detailed methods which make me good at what I do, not time saving short cuts or the location of the property being appraised.  Those guys give the rest of us a bad rep and the agents are very keen to follow the popular catch phrases applied.  Appraisal is an art not a science.  It’s a logic game not a tech or time saving exercise.  An appraiser must at least match the sales skills with the salesmen, or they’ve got no business being an appraiser.  The very reason such advice is in fact applicable and popular, is that the appraisers really do run in and out in 10 minutes. An integral part of the competent appraisers approach is to itemize the improvements and talk about investment costs. 10 photos with a runner does not cut it.

      4

      0
  4. Baggins Baggins says:

    Per the article lead.  Guess what the listed price will be.  Hint:  It will be the highest indicated number the majority of the time.

    5

    0
  5. I am conflicted. I commend agents for wanting to be more accurate. On the other hand I am depressed that they are too ignorant to know how to price property without a computers help.

    Perhaps its because I remember back to being a young agent ‘almost’ but not quite 21 years old; hardly an expert about anything other than hitting what I aimed at with an M-14.

    Before my supervising broker would allow me to place a new listing on the mls, I was required to (manually) grid six sales and place them in the property folder for the time it sold and an appraisals was to be ordered. He was REAL picky about the best three of those.

    NO listing was accepted by our local board without all sections filled out OR EXPLAINED. We used a qualitative approach first, and then lump sum estimates for differences that were the offices consensus of the benefits of special features. In all honesty we (pre Prop 13) allocated ‘value’ between improvements and land based on assessments for GLA adjustments. Our assessor used to assess at 25% of MV but their opinion of MV was also almost always 25% low so we’d use 20% as a guideline (AV/0.20=MV Guesstimations) but even that fancy calculating took hind seat to the office consensus.

    In a ten agent office we had over 250 years of combined agent experience in our markets. Half the office were also buyers themselves if upside profit were possible.

    On ‘caravan day’ we’d drive around all the new listings, and leads. Most of the time, 90% of us would eyeball a property from the front and be able to guess its selling price to within $1,500 to $2,500  on a bad day.

    Not too bad for $22,500 to $30,000 ranges.

    At our own office meetings later, we’d review all our own unsold listings. Anything over 30 days with no activity got high high pressure on the listing agent to either get a reduction, concession, selling agent bonus, or to fix whatever deficiency was resulting in no offers. 

    Nearly all the successful but competing brokers in our area had been trained by the same guy, Herb Rosenkrantz of Tarbell Realtors (before NAR got real sticky about the trademark) in the mid 1960’s. Even my own father.

    They were the only competition we worried about. We’d never admit it, but they were just as good as we were. Extra service and convincing sellers that we really WANTED to do all we could to sell their property was the main difference.

    No appraisal was ever allowed to be scheduled without the listing agent; or in extreme circumstances an experienced associate to go meet and try to schmooze the appraiser. We never coerced or tried to intimidate or coerce. Trick, con, hide or paint over…you betcha!

    3

    0

Leave a Reply

Your email address will not be published. Required fields are marked *

xml sitemap

Realtors® Giving Too Much Power to RPR®

by AppraisersBlogs time to read: 3 min
6