Copyright The Washington Post Company Aug 26, 2000

It's 8:30 on a sunny morning in Old Town Alexandria. John Keegan, attractive, 39 and single, is combing through house listings on the computer in his sparsely furnished but rambling office on the second floor of an old house overlooking King Street.

Keegan, a residential real estate appraiser, owns DeHart and Deming, which he bought four years ago after working there for 11 years. He appraises residential properties, which means he determines how much they're worth, mostly for mortgage companies and banks but also for individuals in divorce or estate cases.

He has three or four full-time appraisers working for him at any one time, the number rising or falling depending on the flow of business.

The company, which usually does between 25 and 50 appraisals a week, looks like a lot of other appraisal firms--small and flexible operations with 10 or fewer employees. There are some 79,000 residential and commercial real estate appraisers in the United States, most of them independent contractors, and a little more than 5,000 in this area, according to the Chicago-based Appraisal Institute.

Keegan's appraisers, like most, spend their days at their computers looking through house listings for comparable sales, or "comps"--houses similar to the ones they're appraising that have sold recently, usually within the last six months. Either they're in offices adorned with maps, like Keegan's, or they're out driving to houses they will measure and inspect to determine their worth.

Appraisers have been licensed at the state level since 1992, after they drew heat for faulty appraisals during the savings and loan crisis. Many states require refresher courses every couple of years to keep appraisers up to date.

Keegan charges between $300 and $400 for an appraisal. He stresses his job is to protect the company's clients, mostly banks and mortgage companies. On the strength of what Keegan tells them, they decide how much risk to take on any property--in other words, how much they're willing to lend.

"We're the value police," he says. "What is this collateral worth is the question we're answering."

In the real estate transaction, the appraiser's job is a powerful one, since a professional appraisal is the only way to decide a property's value. It's also an emotional job, Keegan says, because what he says often flies in the face of homeowners' expectations.

Say, for instance, someone wants to take out a home equity loan to pay college tuition. The amount that can be borrowed is dependent on what the house is worth and how much is owed.

"You can decide if someone has the money to send their kid to college," Keegan says. "That's a lot of responsibility."

He's been screamed at, threatened, cursed and cajoled, he says. But he's only changed his mind about a property's value twice in 15 years. And that was only because of data he had missed.

A day with Keegan this week:

9:15 a.m.: Keegan's in the office, at his computer editing an appraisal done by one of his appraisers, which will go out at the end of the day to the client, New Jersey-based Chase Manhattan Mortgage. Keegan checks all outgoing appraisals and signs them, taking final responsibility. While he is looking over the form, he gets a call from the loan officer at Chase's Dulles office, Phil Grisdela, who wants the appraisal as soon as possible.

Appraisers get their business mainly from loan officers at the banks and mortgage companies they service. Grisdela, who can pick any appraiser he wants, has two favorites he uses, one of whom is Keegan. Chase, like many large financial institutions, decided to pay independent appraisers a fee rather than use in-house employees to avoid any semblance of a conflict of interest.

"Phil, you'll have it by the end of today, no problem," a friendly Keegan says.

Keegan reads over the form, making sure the number at the bottom-- what his appraiser has decided the property is worth--makes sense for the property described above.

When he's done editing, he works out what he calls his "circuit" for the day. He has four properties to look at. Taking into account traffic patterns and time, he maps out his route.

He grabs folders filled with printout sheets from the region's multiple-listing service that describe properties comparable in size and amenities to those he will visit today. He makes sure he has his tape measure to measure the houses and determine approximate square footage.

He also takes his digital camera, from which he can download photos to his computer, to take pictures of the comps. He will attach pictures of at least three comps to the appraisal form to bolster his argument for what the appraised property is worth.

Comps are the Bible to an appraiser. Looking at what comparable properties sold for is the essence of their business and what they base their appraisals on.

"Your house is worth what your neighbors sold their house for," said Keegan, explaining the theory. "That's the single most important piece of information. A lot of people don't want to hear that, though. They think their house is worth more."

On the appraisal form, he makes "adjustments" for work done on a house--a finished basement, for example--that differentiates it from similar properties. Critics of the appraisal system say homeowners don't get enough credit for improvements.

Slipping his pen behind his ear, he skips down the stairs to the street and gets into his metallic blue, two-seat BMW convertible.

11 a.m.: Keegan pulls his car into the parking lot of a condominium complex in Alexandria. His first appraisal is that of a two-bedroom unit for which someone has just agreed to pay $99,000. The appraisal is for the new owner's mortgage. He knocks on the door. A woman lets him in.

He looks around quickly, staying perhaps a total of 10 minutes. He turns on all the faucets. He flushes the toilet and checks the faucets to see if the flushing caused a drop in water pressure. He turns on the air conditioner and puts his hand in front of a few vents to be sure cold air is coming out.

"I'm looking for peeling paint, frayed wiring, things like that," he says. "It looks like new paint and new carpet here."

He asks the current owner what improvements she has made to the condo.

Keegan smiles a lot, but, except for that one question, he says little to homeowners. Many times, he says, homeowners will ask him what he thinks of the property.

But he has learned the hard way not to make any judgments or say anything that could be construed as a judgment. "Anything you say comes back to haunt you," he says. He tells of a recent incident where he mentioned to the owner that the new hardwood floor was nice.

When the homeowner went to sell, the buyer asked to have several problems fixed. "She told them, 'The appraiser said it was nice,' and refused to make the repairs," he said the real estate agent told him. "I have to be really careful not to get drawn into anything like that."

There's a saying framed on the wall in his office: "Silence is the only substitute for brains."

Back in the car, he says the condo appraisal is an easy one. "I have three comps here that are all the same exact model," he says, leafing through the folder. "One went under contract on August 12, one sold in April and one sold in July."

He whips out his digital camera, takes a picture of the building and drives down the road. He stops at two comps down the street and snaps more pictures.

He sometimes has problems with the photos. Owners have run down the street after him, wanting to know what he was up to. "They usually calm down when you tell them you're an appraiser," he says.

But what happens if he can't find recent comps, which happened at times last spring, when prices were rising weekly?

"You can always find comps," Keegan insists. "They may not be the ideal comps, but they're always there. What else is this purchaser going to look at? I ask myself. That's how I find the comps."

Keegan also uses properties that have gone under contract, but haven't settled yet, as more comparables in a fast-changing market. But three comps have to be sold and settled.

He gets back on the highway, top down and wind in his hair, cruising Interstate 95 South.

Noon: Traffic is jammed on the interstate. A few minutes later, he pulls up at a 1987 rambler in Dumfries the owners want to refinance.

He begins looking around the house. "You don't want to stay too long," he says. "People start thinking you're rooting through their stuff. I try to be as unobtrusive as possible."

Keegan glances at the laminate counter top in the kitchen. He asks the homeowner, sitting at the kitchen table, what's been done to the house.

He heads outside and starts measuring. He then notices big high- voltage power transmission lines coming out of a high tower behind the house.

"Oh boy," he whistles. "Everything else about this house has just become a moot point."

Keegan explains that he now has to pull other comps for the rambler because of the tower, which he says affects value because it's within falling distance of the house. He says some people worry about power lines for health reasons, too.

"To estimate the true value of this house," he says, "I have to look for other houses similarly impacted by a power tower. This is the overriding factor here."

The homeowner comes out. Keegan asks her if the detached garage is part of the property. He says nothing about the tower. He measures the garage.

As he gets back into his car, he looks at the comps he pulled before he knew about the power lines. "None of these are that good anymore," he says, putting the folder down. None mentioned power lines and Keegan didn't know it was near the rambler until he inspected the house.

"I would love to find a house backing onto power lines with a garage like that, but it'll be hard," he says. "You do the best you can with cases like these."

He takes off, looking at his watch. That appointment took longer than normal because of the tower considerations and the outlying buildings he had to measure.

1:30 p.m.: His third appointment of the day is a split-foyer on a quiet street in west Springfield. The owners have an adjustable-rate mortgage that's about to adjust up. They need an appraisal to refinance.

As Keegan is measuring outside, the owner tells him casually that an agent called the week before, saying the house could sell for "a quarter of a million, just like that."

"What do you think of that?" the owner asks. Keegan smiles.

"What kind of work have you done to the house?" he asks, changing the subject.

"How does landscaping add to the value of a house?" the owner continues.

"Personally, I think it gets people in the door when you want to sell," Keegan says. He smiles.

After he pulls away and starts looking for the comps to photograph, he sees a similar-looking split-foyer for sale nearby. He pulls over and takes down the address. He'll look up the asking price in the multiple-listing service later.

So, are house prices still rising?

He avoids the question, saying he doesn't really know. "I don't have a crystal ball," he says.

Instead, he has one of those black plastic eight-ball toys on his desk. It's for times like this, when people ask him what he thinks is going to happen. He rolls the ball for the answer.

"Ask me later, I like that one," he laughs.

2:15 p.m.: On the road again, to a house that just went under contract. As he's driving, Keegan tells the story of the time he was taking a picture of a comp in Fairlington. A man and a woman walked up as he was pointing his camera.

"The woman was being stalked," he recalls. "She filed a complaint with the police, thinking I was hired by her ex-husband. The detective called me [by tracing his license plate] and I told him I was an appraiser.

"Sometimes I have to drive off at a high rate of speed."

At the house, he meets the agent, Mark Souder from Jobin Realty. "He's got a really thankless job," Souder says.

Keegan says he sometimes has problems with agents. "We can be at odds with agents," he says. "They want to sell the house for as much as possible. We can put a wet blanket on their parade." Several have yelled at him, he says.

4 p.m.: Back in the office, checking what bills--or checks--have come in today. Later, when the traffic dies down, he'll go back and take some comp photos he missed.

He checks the appraisals going out for the day, signs what's left to sign and then hands the bundle to his messenger to deliver.

There's a call from a loan officer. "Can I give it to you first thing in the morning, buddy?" he asks.

That night, he'll finish that caller's job, then start pulling some more comps for an inspection in the morning.

After work, Keegan goes home to a one-bedroom rented apartment in Old Town. He can walk to work if he wants.

He owned a new town house in Alexandria for almost 10 years, but didn't make any money on it when he sold it last year.

But after looking at properties all day, doesn't he want to own something?

"I see the deals only after they've happened," he says. "I'm looking for an old lady who wants to sell her house because she's moving into a nursing home. She had a fire in her back bedroom once and never fixed it up. Now that's the deal I'm looking for."