May 22, 2020
Like many industries, property appraising can present a number of challenges that, while not unexpected, are never welcome. When appraisers work with the wrong home seller, misinformation and deceit can turn a regular business partnership into a major mess that can have legal consequences.
In most cases, the role an appraiser plays should be pretty straightforward. Appraisers are there to help bring sellers and buyers together through an honest approach to understanding the ins and outs of a property’s value and characteristics. Appraisers are hired to enter a property, value it, and facilitate lending based on that valuation.
Common Homeowner ‘Avoidances’ That Could Lower Home Value
However, one major issue that can arise occurs when the home seller wants to hide certain problems or prevent a lower valuation of their property. They can end up trying to deceive and cover-up need-to-know problems, meaning appraisers need to be extra vigilant about seeking out every bit of truth of a property. Sellers can be held legally liable under most state laws for not disclosing property defects and material facts, such as leaky basement pipes or knowledge of lead paint, but if it somehow comes back to the Real estate appraisal professional, they could find themselves in their own legal battle.
Here are some things a seller may do to cover up the true value of their property on the market.
Plumbing and heating are an intricate part of any home and need to be serviced regularly and properly. Sellers may want to hide small imperfections that may hint at larger issues. Appraisers should be on the lookout for things like fresh paint over areas that have experienced a leak, for example.
When it comes to utilities, appraisers may not find out the answers to problems until they ask questions directly or conduct their own inspection. Property sellers could not be truthful about issues with plumbing, which could turn into major leaks, mold growth, and structural damage that will all affect the value of a property.
Another way that a home seller may try to deceive an appraiser is in the area of neighbor disputes. Having a feud or constant tension between neighbors can severely impact the overall valuation of a home, and it’s not an easy problem to work through. If a neighbor is known for being difficult or noisy or messy, and a new buyer moves in, they may be put in an uncomfortable situation. Appraisers should look for any obvious signs during conversations with the seller about their neighbor situation.
Some real estate appraisal professionals may check any applications for planning as a matter of course, but usually a seller may be looking to move due to something like a planned road or neighbor’s extension. There are issues that can greatly impact a home’s value and that may be asked by a potential buyer.
Aside from any checks appraisers might make, it’s worth working through with the seller to uncover any reasons they may be selling. It could be something like a property changing from residential to business on their block, but it’s still something that needs to be discussed.
Infestation of any kind can have a major impact on the value of a home, even if it’s a historic problem. Pests can get into a home at any time, creating an ongoing issue for any homeowner. Whether it’s a mouse issue or termite damage that goes unpublished, pests can severely cut into the overall value of a home and the interest of a potential homebuyer. However, it’s better to get a clear and honest picture of the health of a home and where it stands with pest problems. While it may be an uncomfortable issue, a pest issue can be handled if it is made known.
About Associations Liability Insurance Agency (ALIA)
The ALIA Team (part of the Riverton Insurance Agency Corporation), specializes in helping real estate professionals find the affordable and comprehensive liability insurance they need, without the hassle. ALIA dates its roots to 1991 with the founding of FREA, Foundation of Real Estate Associates. In 2013, ALIA was created to work with multiple insurance companies thereby broadening the portfolio of products to customers. For more information about our products and services, contact us today at (800) 882-4410.