The Battle For Transparency
“Carry the battle to them. Don’t let them bring it to you. Put them on the defensive and don’t ever apologize for anything.” -Harry S Truman
Apparently, I have roused the ire of the old guard. My forward-thinking marketing tactics have stirred up a certain level of disgust in some colleagues across the nation who prefer to resist the inevitable transparency movement that’s taking over the real estate industry. As some of you know, I am a Massachusetts Certified Residential Appraiser as well as a Massachusetts Licensed Real Estate Salesperson. I leverage this unique combination of skills to benefit both my buyers and my sellers. On the single property websites I post for my listings, I include a link to a downloadable partial appraisal report I developed when the sellers and I were determining our listing price.
I make this report freely available to potential buyers on the website for one simple reason: I want buyers to know we didn’t just pull the listing price out of thin air (or out of a less pleasant area for that matter…). I want them to know that the list price was logically derived from current market data and based on RECENT COMPARABLE SALES.
There is a reason we priced the home as we did and it’s not because it’s “what the seller would really, really like to get” for the home. By being very upfront and TRANSPARENT about our pricing strategy AND including the market data to support our strategy, we can save all parties some time and some money.
I also disclose the fact that I am obviously the listing agent of the property. I offer to refer buyers to another real estate appraiser to review the report. I give them a link to Five Appraisers, a site that searches for nearby appraisers. I suggest they have their agent review the report with them. I disclose, disclose and disclose.
Unfortunately, one particular mid-western appraiser with a number of apparently very important acronyms after his name caught wind of this technique and gave me an earful. He sent me a scathing e-mail calling this practice “sickening”, questioning my ethical makeup and telling me I was in violation of USPAP (Uniform Standards of Professional Appraisal Practice – the code of ethics all appraisers must operate under).
I wonder how my critic would feel about my ethics knowing that I submitted my latest offer for my buyers accompanied with an appraisal report? It was a FSBO, so without a listing agent to soften the blow to the seller, I was able to rationally and reasonably “show” the seller why we were offering much less than he wanted.
This technique prevented the seller from “freaking out” over a lower than expected offer, meanwhile saving my buyers close to $30,000 off the asking price of the home. Unethical?
I can honestly sleep like a baby at night with my ethics. I have refused NUMEROUS appraisal assignments because they involved a colleague in my office. Keep in mind that my company has 425+ agents and 18 offices, so it’s quite often that a transaction involves a colleague of mine and I must refuse the appraisal assignment.
There is absolutely no question in that situation I am much too close to the participants to have an effect the financial ramifications of the transaction. But the appraisals I perform for my buyers and sellers have no bearing whatsoever on the financial implications. I know in my heart of hearts that my sole intention in providing these appraisals when working with buyers and sellers is transparency - the desire to present the most current and accurate market data in a clear and concise format to educate all parties involved and streamline the negotiation process.
So sorry Mr. Mid-West Appraiser with the Extensive Chain of Acronyms. If this practice of mine “sickens” you, allow me to be the first to pass the barf bags. After speaking with one of the country’s most highly respected appraisers, he, too, had a hard time identifying exactly where USPAP was violated and reminded me that this was not a federally related transaction (which is where USPAP holds jurisdiction). My appraisals (in this particular case) are really just CMAs on steroids.
It’s simply how I illustrate market value on paper. It’s the best way I know how to depict, in black and white, what the market it telling us about property values. And I instinctively feel compelled to share this information (with both buyers and sellers) rather than try and hide it under the cloak of secrecy.
Ultimately, it’s my own little way of fighting the Battle for Transparency. Wait until they see my next move! I am going to have home inspections done pre-listing and make those reports available on the single property websites as well! Will this raise the ire of home inspectors nationwide? Why would it? They still get the work, and often times they will get the work twice! So as the battle for transparency rages on, all those involved must remember…
“War does not determine who is right – only who is left.” – Bertrand Russell
Me personally? I’m looking forward to being one of the ones left when the dust settles. And I feel strongly that it will be settling sooner rather than later.
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[...] submitted a post over at Real Estate Radio USA today about the raging Battle for Transparency. It’s becoming all about pulling back the [...]
Nice idea, I can’t see where this is an ethics issue. Showing the comparable closings is just fact. Pretty hard to argue with.
I agree Ted. I think his main beef was that I was doing an appraisal on a property that I had listed. The fact of the matter is that there was no financing hinging on my appraisal. It was merely a way for me to put on paper what my opinion of the property’s true market value was. Just a more formal way of doing a CMA really. It should be interesting to see if Jonathan Miller has anything to add to it on today’s radio show….
PS- LOVE the stuff you’re doing with http://www.1107mesadrive.info BTW!
It’s still unbelievable the amount of people that hold their info under lock and key. Give it up, transparency is needed to correct what was wrong.
Thats a great idea about adding the appraisal onto the a single property website. Keep on innovating and march on transparency.
Come on Mike – spill the beans on who this mid-western appraiser is….
Actually, for a moment there I thought it was me until I read about the alphabet soup behind his name. Really? Appraisers still do that? Pay huge yearly fees just to be a ‘member’ of some group. Guess I missed the memo on that one.
Nice job going to Miller Samuel – a very highly respected source. Good job on another great article!
good job, mike. an excellent addition to the portfolio would be collecting testimonials from your buyers and sellers on what they thought of you providing the appraisal information. that in itself would shut some of the humbugs out there.
Thanks Mark! As always, I like your ideas and plan to incorporate them moving forward. I definitely owe you a “Black Castle” or two when we finally get to meet and talk about old punk rock bands.
[...] Here’s Mike’s post on the subject. [...]