Krystal Kafka Dunk is in charge of the residential appraising departmet at IberiaBank in Sarasota. Courtesy photo.
Krystal Kafka Dunk, a Florida native, was raised on Anna Maria Island and Longboat Key. She attended Eckerd College in St. Petersburg and then returned to the area she loves.
At 34, she heads the residential appraisal department at IberiaBank, overseeing much of the southeastern U.S., including Louisiana, Alabama, Tennessee and Florida, as well as pockets in other parts of the country. Last month, more than 200 orders for appraisals crossed her desk.
Correspondent Chris Angermann interviewed her in her office in the Herald-Tribune Building on Main Street.
Q: How is Iberia’s appraisal department different from those at other banks?
A: Our appraisal department is run by appraisers. We do not deal with appraisal management companies, so we don’t have that extra layer of bureaucracy. We have an approved panel of appraisers, qualified by us based on their résumé and samples of their work.
We tend to stick with the appraisers who can handle just about anything. We don’t want someone who can only do a Lakewood Ranch house. We want someone who can do waterfront property as well as a shack in the middle of the county.
Q: How do you determine what a home is worth?
A: There are three approaches to value in residential real estate. There is the sales comparison approach, which is the most common — finding other equivalent properties that have sold recently.
Then there is the cost approach, which takes into account how much it would cost to build the property, taking certain economic factors into account. For example, right now it costs more to build a house than to buy an existing home.
The third to value is the income approach (how much rental income the property generates). That's typically not used for single-family and more commonly used with 2- to 4-unit properties (duplexes, triplexes, four-plexes).
You’ll rarely find a perfect match, but you can find a good approximation and make a good estimate, and it’s fact-based. Historical-paired analysis is probably the best way to get an appraisal for just about any property, but it takes a lot of research and time.
Q: What are some of the misconceptions consumers have about appraisals?
A: It’s important for buyers and people refinancing to know that they cannot hire someone to do their appraisal and then shop it to a bank. We are not allowed to operate that way in making our loan decisions; we have to hire the appraiser ourselves. It’s confusing because the borrower has to pay for the appraisal, but the bank or mortgage company owns it.
Another issue is that everyone wants an appraiser who comes from the neighborhood or lives nearby. If an appraiser isn’t within five miles of the house, the borrower often gets upset. But if you’re a good appraiser and familiar with the area, you can appraise anywhere.
Q: What recourse do buyers or sellers have if they’re not happy with the appraisal?
A: What we require is fact-based evidence from a seller or someone refinancing for us to reconsider and call for another appraisal — additional sales comps brought to our attention — or a factual error such as we got the square footage wrong.
I make the decision, but the key with IberiaBank is that we have internal review staff and almost every appraisal gets reviewed by a certified appraiser, so we’ve already had someone take a second look, and, hopefully, catch any issues up front.
I have a friend who recently vented to me about an appraisal. He felt insulted when it came in lower than he thought it should have. I took a look at the report and it seemed reasonable. I explained that I understood how emotionally invested people are in their homes — I am in mine — but while there is some subjectivity involved, the appraiser is not creating the value. Appraisers do research, compile and analyze data, and then report the findings.
Assuming it’s accurate, an appraisal isn’t meant to hurt a homeowner. In fact, it’s used to make sure the homeowner and bank don’t over-extend themselves financially. We’ve all seen the results when that happens.
