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Don’t let a low VA home appraisal derail your deal

Appraisal Success

Jan 23, 2019

4 Steps to challenging the appraisal

In September of 2012, one in three real estate deals had appraisal problems. It was post-recession and we hit the bottom of the housing market in the early months of the year.

Although home prices rose slowly (at least in the beginning), stringent mortgage lending requirements and “appraisal frictions,” as NAR’s Lawrence Yun called them, caused many a real estate deal to fall apart.

We’re currently in a period of flux with the housing market with signs pointing to a buyers’ market, but nobody is truly certain of what’s to come. What we do know is that, while they won’t be as difficult as those in 2012, there may be more appraisal challenges on the horizon.

As a new agent dealing with VA clients, getting up to speed on the VA loan process is challenging enough. Dealing with a low VA appraisal takes a special kind of finesse, so let’s walk through the process.

Thankfully, you have options

When your clients are dealt a low appraisal from a conventional lender’s appraiser, there is little that can be done aside from asking for another appraisal or challenging the appraiser.

Loans guaranteed by the VA, however, are a different breed. Borrowers have the leverage provided by a process called the Reconsideration of Value (ROV).

Stay top of mind (Valentine’s Day postcards available in the Holiday postcard section)

It takes a team to request a ROV, so you’ll need to enlist the other side’s real estate agent and the sellers.

Step 1: Nit-pick the appraisal

The first step relies heavily on both the listing agent and his or her clients. Nobody involved in the deal knows more about the neighborhood than these parties, and their knowledge is critical in the ROV process.

Ask them to go over the appraisal, looking for errors and omissions. Even the tiniest of mistakes can make a difference, so request that they be as picky as possible.

Check to ensure the appraiser got the home and the lot square footage correct.
Is the age of the home accurate? How does it compare to those of the comps the appraiser used?
Were the home’s upgrades considered? Energy efficient improvements are especially important in the VA appraisal.
How does the home’s location compare to that of the comps?

While the sellers and their agent are doing their part, you should go into the MLS and ensure that every bit of information about the comps that the appraiser used is accurate.

Take your time and be methodical. Finding mistakes may just save the deal.

Step 2: You’ll need to pick the seller’s brains

Actually, you’ll need to ask their agent to pick their brains. Ask them to think back to any conversations they’ve had with neighbors about home sales in the area. Anything that caused the sale to be more or less than market value is important.

For instance, Joe down the street got a job in Boston and his new employer needed him there immediately. He had to sell his home and, in his rush to relocate, he took a rock-bottom offer.

A death in a family, selling to a family member and a tough divorce are a few other reasons that homes sometimes sell for less than market value.

Also, ask if there were any recent FSBO sales in the area and learn as much as you can about those situations as well.

Show them you’re thinking of them (Valentine’s Day postcards available in the Holiday postcard section)

Finally, run a CMA on the property to see if there are more relevant sales that the appraiser missed.

Step 3: Organize your supporting information

The VA has specific demands when submitting information for a ROV. Some lenders will handle this for you, but to be safe, thorough and professional, submit the information to the lender in the required format.

Comparable sales should be submitted on a grid. See the grid form the lender is required to submit at eprmg.net.

Ensure that the comps are truly “superior” to those used by the appraiser, such as comps that are more recent, closer in proximity to the subject property or more similar.
These comps must have a closing date earlier than the date on which the VA appraisal was reported and the VA will accept no more than three.
Include the MLS printouts (with closed status) for each comp.
Also, include a written narrative on why you think the comps are superior to the ones used by the appraiser. This is where you’ll mention any special circumstances, such as those listed in Step 2.

If the request for ROV is based on a disagreement with how the appraiser analyzed data, you’ll need to approach the lender with different materials:

Submit a narrative outlining which aspects of the appraisal you disagree with and why you think they’re incorrect. “Disagreement(s) with items such as grid adjustments, or subject square footage measurement should be explained and any documentation available to support these disagreement(s) should also be provided,” according to the VA.

Step 4: It’s time to approach the lender

The lender is the middle man or woman in a VA transaction – between the VA appraiser and the buyers and sellers.

He is the person you’ll want to speak with about the ROV and he is the person who will transmit all the supporting documents you come up with.

He’ll supply the appraiser with those documents and the appraiser will have five days to go over everything, reevaluate the original appraisal and notify the lender and the VA of her results.

Let them know you care (Valentine’s Day postcards available in the Holiday postcard section)

Your job at this point is to wait for the VA review process to conclude. Hopefully, all will go in your client’s favor because the results of the VA ROV are final.

Valentine’s Day is on its way (already) and right now is the perfect time to get those Valentine’s postcards in the mail.

Send at least 100 Valentine’s postcards from the Holiday Series to your Sphere of Influence.

Need help targeting the perfect niche of buyers or sellers? Use our mailing list tool to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!

PLUS: When you have time…here are 4 free ways we can help you have an INVINCIBLE 2019!

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Treat your business like a business it is vital to long-term success in this industry. Some agents may put together elaborate business plans, yet there’s something powerful about keeping it simple. Check out our one page Online Real Estate Business Plan – Click Here

3. The 12 Month Done-For-You Strategic Marketing Plan

The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do when. Four key market segments are included, Niche Marketing, Listing Inventory, Geographic Farming, and Sphere of Influence – Click Here

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Consistency and automation are the keys to success. Discover how effective direct mail marketing can dramatically increase your bottom line. Enter your statistics in our Free online ROI Calculator and click the ‘CALCULATE MY ROI’ button to see your results instantly! – Click Here

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Are Real Estate Designations Worth the Time and Money?

Education

Nov 28, 2018

Do open houses work? What about closing gifts? And, are Real estate designations really worth the time and money? One would think that after decades in the industry agents would know the answers to these questions.

But the answers remain a source of debate. Yes, there are some positive benefits to obtaining certain designations. How you use them, however, is key to whether or not they are worth the time and money.

No, designations aren’t a marketing tool

Many agents use designations in their marketing, assuming they provide credibility. In reality, they don’t.

At least not according to a live consumer panel at a Hear it Direct conference a couple of years ago.

The moderator asked the real estate consumers on the panel if they knew the difference between a REALTOR® and a real estate agent.

None of them did.

The “aha” moment, however, comes next: The moderator then asks the consumer panel what CRS, ABR, e-Pro, and SRES stands for.

Not only did they not know what the letters stand for, but they also said the designations make no difference whatsoever to them when choosing an agent.

If potential clients don’t know or care about that string of abbreviations after your name, how can they be of value or convey credibility?

How to add value to the designation

The designation doesn’t add value to the agent unless the agent adds value to the designation.

Consider academic degrees. When someone hands you her business card that has the letters MBA after her name, you know that she received an advanced degree in business administration.

She didn’t need to add value to those letters because they’re universal and most everyone knows what they mean.

As we learned from the panel at the aforementioned conference, however, real estate designations mean nothing to consumers.

But they might if these consumers understood what they stand for.

If you have a designation that clearly sounds more impressive when the name of it isn’t abbreviated, consider using the full title after your name (at least on your business card).

For instance, “Anita Deal, REALTOR®, Certified Staging Professional” instead of ‘Anita Deal, REALTOR®, CSP®”

Accredited Buyer’s Representative conveys far more value to a potential client than ABR® and, while SRS is confusing, Seniors Real Estate Specialist is impressive.

Truthfully? The time and money spent on being allowed to put letters behind your name that mean nothing to real estate consumers would be much better spent on marketing.

Unless you’re looking for more referrals

If your goal in obtaining a certain designation is for the referral network that goes with it, then it just may be worth your time and money to pursue it.

Southern California agent George Alexiou says (in an online forum) that only two months after receiving his designation he received a referral from a fellow e-Pro-designated agent in Virginia.

That deal brought him a $14,000 commission. Not a bad return on his $359 investment.

Another example is the huge referral network you can become a part of if you obtain a CRS designation. Berkeley, CA agent Ira Serkes, is the proud holder of six real estate designations and the only one worth the time and money is the CRS, he told Inman News.

Like Alexiou, he receives lucrative referrals from his more-than 38,000 fellow CRS designees.

Obtaining a designation with an end goal of being able to network with others that also hold it seems to be a smart move. If you work at it, it could be a designation that keeps on giving.

Getting a designation to further your professional development

If the classes offered to obtain the designation sound fascinating to you and you feel you can benefit from them by becoming more knowledgeable then taking them may be worth the time and money.

Be honest with yourself, though. These are pricey classes and most of what is taught can be learned by shadowing your office’s short sale specialist or luxury agent or in many of the real estate books at Amazon.com.

Plus, you’ll pay annually to remain designated.

If you choose to pay for the education that comes with a designation, make sure you’re not doing it in the hopes that, as the NAR promises, you can “position” yourself as an expert, whether or not you truly are one.

That’s dishonest.

Also, consider carefully the money you’ll sink into taking the classes for a designation and the annual renewals. Then, compare the education to what you can learn at some of the industry’s leading conferences and conventions.

Want to know if a specific designation is worth it? Head on over to citydata.com and read the unbiased opinions of agents who hold them.

If you really want to impress real estate consumers, return phone calls, supply neighborhood information and educate them about the process — all far more valuable than designations.

As Audie Chamberlain, former head of social media at Realtor.com and founder of Lion & Orb Real Estate Public Relations says: “Work hard for your clients and you will earn their respect.”

It really is that simple.

Another way to leave a lasting impression is to connect with your Sphere and Farm by sending a Holiday postcard or Holiday Photocard. Let them know you are thinking about them during this special time of year.

Need help targeting the perfect niche of buyers or sellers? Use our mailing list tool to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!

PLUS: When you have time…here are 4 free ways we can help you STILL CRUSH IT in 2018!

1. Become a Listing Legend Free eBook.

2. The Free 2019 Real Estate Business Plan.

3. The 12 Month Done-For-You Strategic Marketing Plan.

4. The Free Online ROI Calculator.

Also…check out these cool tools

Three Click Postcards – Just snap a home photo & create a postcard all from your mobile phone

MLSmailings.com – Automated Just Listed, Just Sold Postcards

Market Dominator System – Become a neighborhood brand

Want to Refer a friend or colleague? Refer them, Here. THEY get a Free $25 Gift Card and YOU become their hero. BTW, you also get a $25 Gift Card too (now that’s what I’m talking about)!

For the Sake of Your Business Take a Day Off

Work & Life Balance

Nov 19, 2018

Small business owners are a unique breed. You work harder than other folks – longer hours, fewer days off and vacations? Yeah, right.

NAR’s 2018 Member Profile claims that “Most REALTORS®” put in a 40-hour week.” We don’t believe that.

We agree, in fact, with a recent Gallup poll finds that nearly 40 percent of small business owners work more than 60 hours a week. That seems to be more illustrative of the work ethic exhibited by the agents we know.

Furthermore, weekends are prime time for many real estate agents so taking them off like a normal 9-to-5 worker is pretty much out of the question.

That doesn’t mean, however, that you shouldn’t find at least one other day of the week to get away from work. A day for yourself.

Are you “too busy” to take care of your health?

We recently read a survey of small business owners who claimed that, although they promised to take Thanksgiving off, 70 percent did not.

No reason was given, but we can pretty much guess why: “I’m too busy.”

If that sounds like you, enjoy the busyness while it lasts, but allow it to control you at your peril. Science has shown us that working too much leads to health issues:

Working non-stop raises your chances of suffering a stroke by more than 30 percent compared to the risk for 40-hours a week folks.
Work more than 55 hours a week? Your chance of developing atrial fibrillation (irregular heartbeat) is 40 percent higher than those who work a sane schedule.
An Australian study found that if you work between 49 and 59 hours a week you are 48 percent more likely to experience a decline in your mental health than those who enjoy a standard work week. Work more than 60 hours a week and that chance increases to 53 percent.

Keep in mind that these studies don’t just cover the time spent at the office. Add in the texts you answer during dinner, the emails you respond to from your home office before tucking the kids in and the phone calls you return when the house quiets down for the evening.

Being “too busy” with work should never come before taking care of your health. If for no other reason than that, take a day off every week.

**But there are other reasons**

The belief that working “twice the amount of hours results in twice the output is short-sighted and toxic,” according to Jason Lengstorf, architect and lead developer at Gatsby.

Why?

Over the decades since Henry Ford ushered in the 40-hour work week, researchers have attempted to determine exactly how many hours a week we can work and remain productive.

What they’ve learned recently is that a 50-hour work week results in a reduction in productivity (Stanford University). After 55 hours of work, it “falls off a cliff,” according to Bob Sullivan at cnbc.com.

“So much so that someone who puts in 70 hours produces nothing more with those extra 15 hours,” he concluded from the study.

Sadly, the promise that technology would simplify our lives has yet to be kept. Sullivan notes that “technology seems to be irresistibly driving the trend” of working long hours.

This is especially true with real estate agents who insist on being on-call almost 24 hours a day, 7 days a week, even on Thanksgiving, apparently.

Elon Musk may have it all wrong

Ryan Cooper at theweek.com calls it “The Musk Meltdown.” It looks like old-fashioned burnout to us.

The man puts in an insane number of hours each week – 120 according to his count. He works in 5-minute segments and is headed toward burnout, according to David Finkel, who co-authored the book “Scale: Seven Proven Principles to Grow Your Business and Get Your Life Back.”

The results – the Twitter tirades, the tears, the admission that he requires a prescription drug to get to sleep, should serve as a lesson for the workaholic real estate agent.

Avoid a similar fate by taking a day off. Every week. Religiously.

And you can do this by relieving yourself of as many of the day-to-day business-running tasks as possible. Either through technology (automating whatever systems you can) or delegation (hiring help if necessary), you can create a boundary between your work and personal life.

Techniques to consider

We aren’t suggesting you hang your current clients out to dry on your day off. Physicians have an on-call schedule and you should too. They ensure their patients are covered when they’re not on-call.

One of the best suggestions we’ve heard is to team up with another agent. You cover for her on her day off and she does the same for you on your day off.

If you’re a member of a real estate team, this one should be simple. If not, find another agent in your office with a similar work ethic.

Then, when it’s your turn and you finally have that 24 hours of leisure time, use it wisely. Reading through agents’ thoughts on the day-off issue at activerain.com, we came across a post from an agent who writes about an annual event in his area that is so special, “it is one of the few days I do take off.”

In the very next sentence, he says that “even some present and prior clients/friends joined us.”

Don’t kid yourself. If clients, whether current or former, are involved in your activities, you are working. It is not a day off.

Turn your phone off and shut down your computer to resist doing work on those days. It’s far too easy to allow one phone call, one text or one email to turn into just another day at work.

And, if you find you just can’t seem to stick to a weekly day off, start smaller. Try a day off during alternating weeks or one every 10 days. Do whatever it takes. And don’t you dare work on your day off. The real estate world will still be here when you get back.

Want an easy way to stay in touch with your past and potential customers that won’t take time or thought? Send out a monthly postcard from our Holiday Series to your chosen mailing list (yes, there are holidays to celebrate every month of the year).

This month send out the Most Wonderful Time of the Year postcard from our Holiday Series to your chosen mailing list.

Let the people that are important to you and your business know you are thinking about them.

Need help targeting the perfect niche of buyers or sellers? Use our mailing list tool to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!

PLUS: When you have time…here are 4 free ways we can help you STILL CRUSH IT in 2018!

1. Become a Listing Legend Free eBook.

2. The Free 2019 Real Estate Business Plan.

3. The 12 Month Done-For-You Strategic Marketing Plan.

4. The Free Online ROI Calculator.

Also…check out these cool tools

Three Click Postcards – Just snap a home photo & create a postcard all from your mobile phone

MLSmailings.com – Automated Just Listed, Just Sold Postcards

Market Dominator System – Become a neighborhood brand

Want to Refer a friend or colleague? Refer them, Here. THEY get a Free $25 Gift Card and YOU become their hero. BTW, you also get a $25 Gift Card too (now that’s what I’m talking about)!

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