Can Real Estate Brokers Do Appraisals – You Need To Know!
Real estate brokers cannot do official appraisals unless they are licensed. They can give rough value estimates, but only a licensed appraiser can provide the official appraisal. Always hire a certified appraiser for accurate results.
Stay up to date with us as we explore whether real estate brokers are qualified to perform appraisals. We will cover everything you need to know about brokers and appraisals in the following posts.
What Is A Real Estate Broker?
A real estate broker is a person who helps people buy or sell property. A broker has more knowledge and training than a real estate agent. A broker has a license to run their own office. A broker helps with legal paperwork and financial transactions. A broker makes sure the deal is safe and clear.
What Is A Real Estate Appraiser?
A real estate appraiser is a professional who determines the fair market value of a property. An appraiser assesses the home or building to determine its value. An appraiser examines the size, location, and condition of the property. An appraiser also checks the prices of other homes in the area. The final report helps in selling, buying or getting a loan.
Who Can Perform An Appraisal?
Only a licensed real estate appraiser is authorised to perform an appraisal. The person must complete special training and pass an exam. The appraiser must follow the rules set by the law. The appraiser must be fair and give the correct value. No normal agent or buyer can do this job.
Who Chooses The Appraiser?
The lender usually chooses the appraiser. The lender picks from a list of licensed appraisers. The buyer or seller can not select the appraiser. This keeps the process fair and honest. The appraiser must provide a valid value without any pressure.
How Much Does An Appraisal Cost?
A home appraisal usually costs between $314 and $423. The average price is around $358. The final cost depends on the size and condition of the home. Bigger or special homes may cost more. The price can also change depending on the location of the house.
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What Are The Key Differences Between Brokers And Appraisers?
| Aspect | Real Estate Broker | Real Estate Appraiser |
| Role | Helps with buying, selling, or renting properties. | Determines the value of the property. |
| License | Needs a state license. | Needs certification and follows the rules. |
| Main Task | Guides transactions and negotiates deals. | Gives an unbiased property value. |
| Payment | Earns a commission from transactions. | Gets a fee for the appraisal. |
| Oversight | Regulated by real estate boards. | Follows strict appraisal standards. |
| Client Focus | Works for the buyer or seller. | Remains neutral, works for the lender. |
What Is The Uniform Standards Of Professional Appraisal Practice Or USPAP?
USPAP is a set of rules that appraisers follow when valuing a property. These rules help appraisers do their job fairly and correctly. USPAP makes sure appraisers are honest and follow the same process every time. It is important for appraisers to follow USPAP so their work is trusted.
In What Scenarios Might A Broker Perform A Valuation?
A broker might perform a valuation in certain situations where an official appraisal is not needed. Here are some common scenarios where brokers may provide a property valuation:
1. Informal Valuations:
Brokers can provide an informal valuation to help people understand the potential value of a property. This is based on the knowledge of the broker of the area and similar properties around it.
2. Pre-Listing Assessments:
Before putting a property up for sale, brokers often do a valuation to help the seller set a fair price. They examine recent sales and the condition of the property to determine the right price.
3. Short Sales and Foreclosures:
In cases of short sales or foreclosures, brokers may do a valuation to figure out the current value of the property. This helps the seller or lender set a price that will attract buyers and allow the sale to happen quickly.
How Is A Real Estate Broker Involved In The Appraisal Process?
A real estate broker plays a supportive role in the appraisal process, even though they are not the ones conducting the formal appraisal. Their involvement helps ensure that the process runs smoothly and efficiently. Here is how a broker contributes:
- Scheduling the Appraisal: Brokers coordinate with the appraiser to schedule a convenient time for the property inspection, ensuring timely access to the property.
- Providing Property Information: They supply the appraiser with essential details about the property, such as its features, recent improvements, and comparable sales data.
- Facilitating Access: Brokers ensure that the appraiser has unrestricted access to the property, including all areas that require inspection.
- Communicating with Clients: They keep both buyers and sellers informed about the appraisal process and its outcomes, addressing any concerns promptly.
- Assisting in Disputes: If the appraisal value is contested, brokers can help gather supporting evidence and communicate with the lender to facilitate a reconsideration of value.
Why Some Brokers Choose To Get Appraisal Licenses?
Some brokers pursue appraisal licenses to enhance their credibility and offer more comprehensive services to clients. Having an appraisal license allows brokers to provide formal property valuations, which can be beneficial in various real estate transactions.
Additionally, it enables them to understand the appraisal process better, leading to more effective negotiations and client support.
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How Long Does The Appraisal Take?
A home appraisal typically takes between 1 to 3 weeks from start to finish. The process involves several steps:
- Scheduling the Appraisal: After your offer is accepted, the lender usually orders the appraisal. The appraiser typically contacts you within 48 hours to schedule the property inspection.
- On-Site Inspection: The appraiser visits the property to assess its condition and features. This inspection typically takes between 30 minutes and a few hours, depending on the size of the property and complexity.
- Report Preparation: After the inspection, the appraiser compiles their findings into a detailed report. This report is typically delivered to the lender within 6 to 20 days from the start of the appraisal process.
What Are The Legal Rules For Real Estate Valuation?
In the United States, there are laws and guidelines in place to ensure that property valuations are fair and accurate. These rules help ensure that property values are accurately determined and taxes are paid correctly. Here are the main rules:
- USPAP (Uniform Standards of Professional Appraisal Practice): Appraisers must follow these standards when valuing property. It ensures that appraisals are done fairly and professionally.
- Dodd-Frank Act: This rule requires that buyers get a copy of the property’s appraisal when applying for a mortgage loan. This ensures transparency in property valuation.
- FIRREA (Federal Regulations): This law requires that certified appraisers appraise properties with high values (over $1 million) for federally related transactions.
- IRS Guidelines: The IRS has established guidelines for valuing properties, particularly for tax purposes. These rules ensure that property valuations are accurate for tax reporting.
FAQ’s:
1. Can A Real Estate Broker Also Be An Appraiser?
A real estate broker can become an appraiser by obtaining the necessary appraisal license. However, brokers cannot perform formal appraisals unless they are licensed appraisers.
2. How much does a broker charge for an appraisal?
Brokers typically do not charge for formal appraisals, as they are not licensed to conduct them. However, brokers may offer comparative market analysis (CMA) services either free of charge or for a fee.
3. Who can carry out an appraisal?
Only licensed or certified appraisers are authorized to carry out formal appraisals. These professionals are trained and meet state requirements.
4. Who should do the appraisal?
A licensed or certified appraiser should perform the appraisal to ensure it is accurate and legally valid. Real estate agents and brokers are not authorized to conduct official appraisals.
5. Do realtors give free appraisals?
Real estate agents do not provide free appraisals but may offer a free comparative market analysis (CMA). A CMA is an informal estimate of property value based on market trends.
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Conclusion:
While real estate brokers can play a helpful role in property valuations, only licensed appraisers are authorized to conduct official appraisals. Brokers may offer free market analysis, but cannot replace the accuracy and legality of a formal assessment. Always ensure you work with a certified professional for official property valuations.
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