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Could Incomplete MLS Listings Be To Blame For Bad Appraisals?

houseI was reading a letter from our outgoing board president, John Burt,¬†published in our monthly board publication. In the letter he writes about appraisals and mentions that appraisers read the remarks we put in the MLS profile sheet. He goes on to write: “That information can make a difference in value, not just for your listing, but other comparables. If you have a “dog” of a listing, please don’t describe it as a palace, because that could be a future comp for a true palace that gets listed.”

He’s right. And after doing several market updates recently I came to the conclusion that the problem isn’t puffing our listings. It’s incomplete or incorrectly filled out listings. The example I’m going to use is my year end sales data for Lake Orion (the lake located in Lake Orion, MI).

In 2010 there were 27 solds reported in the MLS for lakefront homes on all sports Lake Orion. 12 bank owned homes, 3 short sales, 12 regular sales.

10 listings- or 37% of the total lakefront sales– had absolutely no description of the house. A description lazy listing agentsis NOT “This is a Fannie Mae HomePath property, purchase… blah blah…¬†highest and best offers are due by….”. On THIRTY SEVEN FRIGGIN PER CENT of the sold lakefront listings on Lake Orion the listing agent made ABSOLUTELY NO ATTEMPT to “sell” their listing to other agents. Because that IS what the MLS is for. To sell your listing to other agents so THEY can sell it to their buyers.

But it gets worse. If an appraiser is going to search for solds on Lake Orion you would think he would (should) be able to search X price range, check the lakefront search field, and fill in the water name search field with either Lake Orion or even Orion. If an appraiser did that for sales in 2010 he would have missed out on 7 of the sold listings- or 26% of the sold lakefront homes on Lake Orion. ALL of the listings that had no water name filled in had no description except how to submit the offer. ALL of those listings that had left the water name search field blank and didn’t bother to fill in the description were bank owned homes.

Now I showed many of these homes. Some were in pretty good condition. Some were outright dumps. Some suffered from delayed maintenance. But unless an appraiser had been in those homes, he would have no idea of the condition and no basis for adjustments.

Not only does half assing your job as a listing agent affect appraisals, it is affecting how much work a buyer’s agent has to go through just to be able to include all appropriate, available homes for our buyers. In Lake Orion it’s not so bad to read through 30 or so active listings but try finding a lakefront home in Waterford or Clarkston. Lake Oakland covers both Waterford and Independence Townships. When I update my sales data for Lake Oakland I will probably have to read through over 200 listings since 20-25% of all lakefront listings in our area seem to have the water name search field left blank.

Should appraisers do the same as I am, and read through a couple hundred listings to find the 3-6 comps they use? Yes- they should. A lot is riding on the outcome of their appraisal, and an inaccurate appraisal can mean financial devastation to a seller. DO appraisers go to those lengths for the $300 or so they make on an appraisal? I doubt it.

So listing agents- especially REO agents- Please Please Please start doing your job and fill out your listings completely and accurately. If you can’t at least do that minimal part of the job, please do us all a favor and quit this line of work.

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407
email:
Jackie@JackieHawley.com

For Sellers

Oakland County MI Lakes

Lake Orion (the lake)

Why Are Appraisers Calling This a Declining Market- Prices Are Up Inventory is Low

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