Pam
Junior Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified General Appraiser
- State
- Washington
Condition has replaced location as the hack appraiser's favorite method of inflating values. Lenders, investors, etc. are wise to the old trick of using comps from superior locations to inflate values. Hence, the often repeated request for "an additional comp from the subject's subdivision."
Now the hacks are using comps from the subject's immediate market area, but the comps are of superior condition. "Across the board" condition adjustments abound. When questioned as to how the subject can be "average for the neighborhood" but all the comps are superior, the hacks have yet to give a credible answer.
Now the courts are stepping in. "The U.S. Court of Appeals for the Fourth Circuit, applying principles of South Carolina law, has held that an appraiser may be sued for negligent misrepresentation if his appraisal of “as is” market value is “materially inaccurate and negligent” and a third party “detrimentally relied” on the opinion of value." a recent news article noted.
I've looked into my crystal ball and I predict these suits cropping up all over the country. Lenders, buyers, and anyone else who has lost money over a house in substandard condition will be looking to the appraiser (and the appraiser's E&O insurer) for relief.
Now the hacks are using comps from the subject's immediate market area, but the comps are of superior condition. "Across the board" condition adjustments abound. When questioned as to how the subject can be "average for the neighborhood" but all the comps are superior, the hacks have yet to give a credible answer.
Now the courts are stepping in. "The U.S. Court of Appeals for the Fourth Circuit, applying principles of South Carolina law, has held that an appraiser may be sued for negligent misrepresentation if his appraisal of “as is” market value is “materially inaccurate and negligent” and a third party “detrimentally relied” on the opinion of value." a recent news article noted.
I've looked into my crystal ball and I predict these suits cropping up all over the country. Lenders, buyers, and anyone else who has lost money over a house in substandard condition will be looking to the appraiser (and the appraiser's E&O insurer) for relief.