Appraisal Letter: How to Write One for Listing Agents
Written by Shelley Zavitz
You have the listing.
You get the call.
It’s time to meet the appraiser.
Now what.
In any transaction, the appraisal letter is the one wild card a real estate agent cannot control or plan for. Creating an effective appraisal letter that provides a concise snapshot of the market’s supply and demand is a habit of many successful listing agents.
A well-crafted appraisal letter helps bridge the gap between expectations and reality. When preparing an appraisal letter, it’s important to be clear and accurate about the property’s value. The appraisal letter should reflect current market conditions and comparable sales to give both the agent and the client confidence. Here are some tips on what to include in your appraisal letter.
How to write an appraisal letter – Tip 1: Formatting essentials
The letter should have your brokerage logo, proper letter formatting, the property address, date of the letter, and who it is addressed to. The letter should have your name printed at the bottom with all contact information. If you’re printing it, you should sign it.
How to write an appraisal letter – Tip 2: Understand your purpose
It is illegal to attempt to dissuade an appraiser. That is not our purpose with this letter.
Our goal is to support the appraiser by giving the information we have to help with their decision of value.
Fair Market Value of a home is based on what a buyer is willing to pay. While the appraiser has access to market statistics and comparable homes, it may be beneficial to outline the demand from within the transaction.
How to write an appraisal letter – Tip 3: Data You Will Need
Before you write a word, you’ll need to pull the following data.
For the zipcode: DOM, MOI and Median Sale Price.
For the subject home: DOM, 3 comparable homes of the same style, age, condition and bed/bath count sold in the 3-6 months within a 1 mile radius from the subject property. (You will need 6 comparable homes if the buyer is getting a jumbo loan).
A feature list, or information about upgrades and systems ages. A floor plan with room sizes. Physical touring stats while the home was actively on the market.
Pro Tip: Reporting how many times your listing was seen on zillow is of no interest to an appraiser and has no bearing on supply and demand.
How to write an appraisal letter – Tip 4: Writing the letter
Your letter should be no longer than one page. Concise is key. Remembering that your goal is to support the appraiser, not instruct the appraiser, write your summary letter using the data listing above.
Include information about how many offers there were, how busy the open houses. Make all of your statements based on facts and limit any editorial comments out. Your goal is draw a picture that supports the accepted sale price by using facts.
Comments like “I’ve worked in x area for 31 years” will have your letter quickly dismissed if used at all.
How to write an appraisal letter – Tip 5: Delivering the letter
No one likes to be told how to do their job. When meeting the appraiser, have the house already ready for them. Turn the lights on, air it out if it’s vacant, etc. While many appraisers say they are not influenced by such things, we are all human and they are creating an opinion of the home.
Greet the appraiser and tell them you’ll just be around if they have questions. When they have completed the measurements of the home and their walk through, offer the letter and information. It’s up to them if they take it or not. “I wrote you a summary of this house and the market if you’re interested.”
Your job as a listing agent is to get the seller the best price at the best terms. Beginning a professional practice around the appraisal not only helps you achieve this, it’s another item on the list of services you can provide to show you have worked very hard to earn the commission they pay you. A confident closed seller always refers!
Click here for an edible Appraisal Letter Template.
Disclaimer: Be sure to check the policies, laws and rules of your State to stay in compliance.
