End of summer wish: Musings on how to be a good client - by Karen Friel

Karen Friel, Friel Valuation Advisors, LLC

As summer fades, 4^th Quarter 2016 is rapidly approaching, the traditional “crunch time” for the appraisal profession as transaction related clients order appraisals for year-end deals. The problem for appraisers, though, is everyone orders at the same time, but appraiser capacity is limited. Every appraiser gets calls from desperate clients requesting a favor in delivering an appraisal report “ASAP!” So for a few weeks anyway, the question for clients is how to move up on an appraiser’s priority list. The answer is to be a good appraisal client all year long because appraisers are much more willing to accommodate a client that is easy to work with. Here are a few tips on how to be a good client:

• Understand the real estate before you contact the appraiser including the property type, land area, building size, occupancy, tenants, development plans, and any other relevant information. Conveying full property information allows the appraiser to generate a realistic fee and achievable delivery time proposal, but surprises after engagement inevitably delay the appraisal report delivery and can cause fee bumps.

• Communicate the intended use and users of the appraisal at the time of engagement so the appraisal can be scoped with the intended use. Reporting and documentation may be different depending on the intended use of the appraisal. Similarly, it is imperative to communicate all intended users of the appraisal report at the time of engagement. If other transaction participants or government entities will be using the appraisal, they must be listed on the appraisal at time of delivery. Per Uniform Standards of Appraisal Practice (USPAP) an appraisal cannot be modified to add or change additional clients or intended users after it has been delivered. A new appraisal assignment must be engaged and this requires additional time and potentially an additional fee.

• Send all property specific information to the appraiser with the engagement letter. This includes rent rolls/leases, plans and specifications, historical operating results, development plans and any other pertinent information that is in your possession. If an appraiser has to request this information from the borrower/owner customer, it will likely result in time delay in addition to irritating the customer for having to produce the same information he/she has already provided.

• Notify the property contact to accommodate the appraiser with a timely inspection appointment.

• Be available for questions that may come up during the appraisal assignment. If the question is technical in nature, it may be appropriate to bubble it up to the appraisal reviewer. It takes far less time to respond to an appraisal question before the report is delivered than to revise the report afterward.

• Do not allow the appraisal reviewer to nit pick the appraisal. No appraisal is perfect.  A good appraisal reviewer will review the data and analysis presented to determine whether it supports the conclusions in the appraisal report. A reviewer who nit picks adds time and drives up future appraisal fees.

• Finally, pay the appraiser promptly. Appraisers operate small businesses that are cash flow dependent. Don’t string them out on payments. They remember who pays on time.

Appraisers are highly trained professionals in a volume business. A little forethought, communication and follow up will make the appraiser client relationship more productive and pleasant for both parties.

Karen Friel, MAI, MRA, is principal at Friel Valuation Advisors, LLC, Carlisle, Mass.