Words are powerful and language matters in all situations, but today, I want to specifically talk about the importance of how we use language in the real estate profession. There are several key words and phrases that are used, and can be misleading.
A word I have often heard real estate professionals use is, “undervalue.” Realtors will often say, “The property came in undervalue” when really, they mean to say, “The value of the property is below the purchase price or cost to build.” As appraisers, it is our job to report value, so when we say that a property came in undervalue, we are really saying that we are incompetent appraisers who did not report the value correctly. Unless you are guilty of ineptness or fraud, the property came in at value as established by the market. Additionally, the property did not come in at value. Rather, the value was reported.
“Inspection” is a word that I use all the time and will likely continue to use simply out of habit. However, I recently heard a different word that I have since fallen in love with. The word “inspection” can give a false impression of what we will be doing when we go out to the property. In truth, we are not inspecting the property. We are not home inspectors, we are simply walking through the property and observing. I have started calling my “inspections” “observations” instead. This is an additional safeguard against any potential liability resulting from someone thinking appraisers are home inspectors.
There have been times when a homeowner or realtor has given “comps” for me to look at as I do my valuation. However, at the time they are given to me, they are not comps. They are sales or listings. They are not comps until I, as the valuation expert, determine that they are comparable to the property I am appraising. It would be in an appraiser’s best interest to kindly and professionally correct whoever is providing us with these sales or listings if they call them comps by saying something along the lines of, “Thank you for providing me with these sales, I will do some additional research so that I can know whether or not they are comparable to the property.”
Words have power and we improve ourselves and our profession when we use them correctly.