I got a great question the other day and the question went "Why doesn't the buyer hire an appraiser?" This question was in regards to a conversation discussing a potential offer on a home. The question was posed by a friend of a client and I think it's a great one! I don't doubt many people have asked it, and to be honest, very few people actually understand how a real estate search and a real estate transaction function. Who is an appraiser? Who is a real estate agent? Why are they different?
First let's start with the appraiser: Who does the appraiser work for? Put simply, the appraiser is hired by the bank to assess the value of a property in a real estate transaction. This is usually after a contract has been accepted between a seller and a buyer. The bank wants to make sure we're not all crazy. Basically, that the home is worth the sales price in the contract. It's a security measure for the bank. The appraiser does not work for the buyer. And they don't work for seller. An appraiser does not have a real estate license and cannot give real estate advice.
When working with a buyer client, a real estate agent is advocating for a party in the transaction. What this means is that when it comes to the question, "What should I offer for this property?" a real estate agent can answer it. An appraiser cannot. While a real estate agent can and should give an opinion of value on a home for their client, they also advocate and advise their client when crafting an offer. That's a big difference! And the difference is ever more apparent in this ultra-competitive Seller's Market we find ourselves in today.
Who comes up with the sales price? The buyer? The seller? The agents? The appraiser? The answer might surprise you: it's none of these, it's the market. The market determines what the sales price will be for a home. A good agent knows the market. A agent works with their clients to help them navigate that market. It takes time and it's a relationship. The appraiser's job is a very important one and is an essential part of any transaction. But it's only a small part of the process and it isn't real estate advice!
I can understand the apprehension some people have. Real estate is a sales profession. Some among the public don't trust real estate agents. And quite frankly, too many real estate agents have done enough over the years to warrant this characterization. Which is why, when finding a buyer agent, home buyers should do their homework to find an agent they trust. An appraiser is seen as a neutral party. And they are. But a neutral party isn't going to be able to provide valuable advice that a good real estate agent can give when a dream home is on the line!
What questions do you have about real estate in Lawrence? I'm looking to shed a little light on the industry and my hope is to have an informed public. Informed real estate consumers are more likely to find a good agent they can trust and to know and understand the process just a little bit better!