Any underwriter can tell you that one of the three “C’s” in making a decision stands for “Collateral”. Yes, the property is important. As 2024 moves along and we exit spring and head toward summer, properties have, for the most part, been appreciating in the several years, but Orion’s underwriters and our brokers are seeing problems still pop up with appraisals.  

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It is important for brokers to advise their clients that comments on listings in the MLS can impact future home values in the area. "Puffing" listings to get more shows has been around in real estate sales as long as the weekend open house, and helps the seller feel better about the property, but unfortunately the practice does more harm than good.  

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By over-stating, or dressing up the condition of a property, real estate agents are impacting future values and home sales: appraisers who do not view active listings, but instead review MLS data and comments, do not know how truthful the comments may be. As a result, many homes that sell for near the lower end of the market due to condition of the property but are listed with remarks of ‘gorgeous throughout, remodeled kitchen and baths, re-carpeted’ create a comparable for appraisers for many months of a low-price sale for a high condition property.

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In other words, many low value appraisals are the result of the information provided to the appraiser by real estate agents in their MLS comments. Experienced brokers, and real estate agents, when viewing listings will often suspect when there is a great disconnect between the agent comments in the MLS and the reality of a home's condition. Orion’s brokers will often contact the listing agent and ask them to amend their comments to more accurately reflect the condition or suggest leaving the comments regarding condition blank. Instead of "gorgeous throughout" say "great opportunity for new homeowners" or "easy to show and priced well for the market."

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This is one of the reasons why it is important for first time home buyers, and even existing home buyers looking to move up, to use a reputable broker. Your client needs someone “in their corner” in this environment of internet listings, news about the National Association of Realtors settlement, and properties continuing to receive multiple bids when they go on the market.

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