Posted on: 09th Jun, 2011 12:26 am
Well… I'm a bit confused. I was having a word with friend regarding property appraisal… and he told me that a real estate agent and an appraiser is all the same. Although I'm sure they are not the same, I wasn't able to explain the difference between the two to my friend. Can someone here tell me what the difference between the two is?
Hi Jackson,
You're right - real estate agents and property appraisers are not the same. Real estate agents are actually salespersons. But again, these real estate agents may sometimes provide you with property appraisals and help sellers to make listing presentations. However, they don't charge any fees for the appraisal.
Property appraisers work independently and assist those home owners who want an independent appraisal in case if they already have a buyer or are selling it on their own. Independent property appraisers will charge you fees for their services.
Thanks,
Jerry
You're right - real estate agents and property appraisers are not the same. Real estate agents are actually salespersons. But again, these real estate agents may sometimes provide you with property appraisals and help sellers to make listing presentations. However, they don't charge any fees for the appraisal.
Property appraisers work independently and assist those home owners who want an independent appraisal in case if they already have a buyer or are selling it on their own. Independent property appraisers will charge you fees for their services.
Thanks,
Jerry
Also, your friend could be confused by the fact that many real estate brokers will prepare Broker Priced Opinions, similar to an appraisal. An appraiser has completely different studies and skill sets. As a real estate agent or broker, will have knowledge of property values and valuation, but an actual appraiser is who a lender will order your appraisal for a home loan from.
Perhaps I can clarify a bit further .
There are many different types of appraisals that appraisers can perform. They vary based upon the amount of data communicated. "Full" appraisals contain a great deal of information used in loan underwriting as well as extensive maps, photos and other addenda. The forms which appraisals are written on are specified typically by Fannie or Freddie and are standardized nationwide.
Agents will typically prepare a BPO (Broker Price Opinion). The way each arrives at value is quite different. Another factor is that appraisers are specifically licensed strictly for valuation and have significant liability for errors and omissions related to attaining a value judgement. I am not sure if agent's license regulation cover valuation services. Appraisers probably have a bigger regulatory whip over their heads related to providing valuation on property. A full appraisal is much more time consuming than a BPO.
Additionally, it is a severe conflict for an appraiser to perform a valuation on any property he/she has any financial interest in, be it ownership or other interest. Appraisers are subject to severe penalties if this is violated. An appraiser could never provide a valuation on property which he/she is selling, buiying, inheriting, or brokering, if he as also a broker.
In an appraisal, the appraiser must provide a significant explanation of the logic and techniques used in arriving at a value judgement. The techniques and logic are governed by a set of federal regulations which are enforced by state laws in all 50 states.
Apprasiers are licensed separately from agents. There is no overlap. Agents and brokerss are registered to a real estate brokerage. Appraisers are licensed individually. There are no business licenses for appraisers.
There is much more to say, but I hope you can get a feel for the differences from this explanation.
Regards.
Jeff Deuitch
Manatee Appraisal Service
Palmetto, FL
There are many different types of appraisals that appraisers can perform. They vary based upon the amount of data communicated. "Full" appraisals contain a great deal of information used in loan underwriting as well as extensive maps, photos and other addenda. The forms which appraisals are written on are specified typically by Fannie or Freddie and are standardized nationwide.
Agents will typically prepare a BPO (Broker Price Opinion). The way each arrives at value is quite different. Another factor is that appraisers are specifically licensed strictly for valuation and have significant liability for errors and omissions related to attaining a value judgement. I am not sure if agent's license regulation cover valuation services. Appraisers probably have a bigger regulatory whip over their heads related to providing valuation on property. A full appraisal is much more time consuming than a BPO.
Additionally, it is a severe conflict for an appraiser to perform a valuation on any property he/she has any financial interest in, be it ownership or other interest. Appraisers are subject to severe penalties if this is violated. An appraiser could never provide a valuation on property which he/she is selling, buiying, inheriting, or brokering, if he as also a broker.
In an appraisal, the appraiser must provide a significant explanation of the logic and techniques used in arriving at a value judgement. The techniques and logic are governed by a set of federal regulations which are enforced by state laws in all 50 states.
Apprasiers are licensed separately from agents. There is no overlap. Agents and brokerss are registered to a real estate brokerage. Appraisers are licensed individually. There are no business licenses for appraisers.
There is much more to say, but I hope you can get a feel for the differences from this explanation.
Regards.
Jeff Deuitch
Manatee Appraisal Service
Palmetto, FL
In addition to the valuation of real estate, the job of an appraiser includes the valuation of the property rights attached to the real estate (assuming we are talking about real estate; there are also personal property and business appraisers as well). This includes valuation of partial ownership, life estates, right of way, or easements just to name a few.
As Jeff has pointed out, the biggest difference between the two has to do with interest in the transaction. It is in the interest of an agent for the property to sell at the highest price possible because their commission is a percentage of the price. An appraiser's opinion of value is independent and objective. The fee for an appraisal is typically set by the complexity and liability in the assignment and is not dependent on the value estimate. As a result, an appraiser, absent any influence from interested parties, has no interest in the outcome of the appraisal.
In many states, certain laws are in place to restrict valuation practice to appraisers only. The exception being in the form of agents providing valuations for the purpose of listing a property. This means that you cannot hire an agent for independent or fee valuation services.
Just another $0.02
As Jeff has pointed out, the biggest difference between the two has to do with interest in the transaction. It is in the interest of an agent for the property to sell at the highest price possible because their commission is a percentage of the price. An appraiser's opinion of value is independent and objective. The fee for an appraisal is typically set by the complexity and liability in the assignment and is not dependent on the value estimate. As a result, an appraiser, absent any influence from interested parties, has no interest in the outcome of the appraisal.
In many states, certain laws are in place to restrict valuation practice to appraisers only. The exception being in the form of agents providing valuations for the purpose of listing a property. This means that you cannot hire an agent for independent or fee valuation services.
Just another $0.02
A valuable two cents, nevertheless; edification galore for the vast public.
