Appraisal didn't "make" the sales price...

[Ken-NC]

okay.


Mike,

That I knew. And I don't think I would be spewing forth if I HAD let them influence me in any way, eh?

So then, the real estate agent is held to their standard of ethics.... (sorry, fell out my chair laughing - let me wipe the tears from my eyes so I can finish...) ... and the appraiser is held to the standards of law. hmmmm



Vern,

You're right on both counts. Honestly, I'm not going to pursue this legally or otherwise, I was just curious. I guess I'm just growing weary of defending an honest appraisal.

 

[Tim The Enchanter]

:lol: I just completed appraisal of a condo today, appraised at $200k. Sale price is $250k I'm told. That's not just a little high, that's higher than a kite! Was $40 or $50 per SF higher than anything else.

I'm sure the agent / seller won't be happy, or the LO. Maybe the borrower will be happy he was saved from spending $50k too much. Or maybe they're all scamming. Either way it was paid COD, and appraisal will not go out until the check clears. So, :evil: 'em if they don't like it. Too many of these LO people are just grifters anyway. :twisted:

 

[Leon Stewart]

Ken, it is not illegal! What could be illegal is IF you as the appraiser let it influence you to appraise to a predetermined value.

Remember the role of the real estate agent....get the property listed (first) and get the property sold (second). Agency isn't an issue either. The agent isn't required to even do a market analysis.

Mike:

I think you are mostly right, but I think in some States it is illegal for an Agent to take a Listing knowing it to be in excess of the market Value for that Property in that particular community. As a Practicing Agent in a given community the Agent should know the market value of the properties in that area. If an owner wants to list the property in excess of what the Agent feels the Market Value is, the Agent is suppose to reject the listing and move on.

In some cases an Agent will inflate the listing price hopeing a low offer will fall withing the range that the seller will accept, but that dosen't mean that an agent will list a property for $ 100,000 in a $ 75,000 neighborhood hopeing to get a $ 90,000 offer. If he does get his offer he know it won't appraise for that, and he ends up with a problem and try to blame the Appraiser, or else he starts looking for an Appraiser and/or a Lender that will get for his Contract Price.

Leon

 

[Mike Garrett RAA]

Leon....cite for me one state that has such a law?????

As a point of reference, I taught Basic Real Estate Marketing for ERA Real Estate in Kansas, Colorado, New Mexico, Texas, and Washington. No such laws there. Now, is it really ethical for a real estate sales person to over list a property? Could be but if it was against the law fully half of the real estate sales people in the country would be in jail.

When teaching new agents..we always said " get the listing at any price and then convince the seller to adjust your competitive marketing position (lower the price)". The agent is looking at it from an entirely different prospective than the appraiser!

 

[Ken-NC]

well, perhaps therein lies the problem.

Fortunately, there are real estate agents in my area that simply do not have time to fool with such nonsense.

If they feel the homeowner's asking price is too high, they will often suggest they order a marketing appraisal and split the cost.

And go figure, these are usually the busiest and most productive agents in town.

 

[Leon Stewart]

Leon....cite for me one state that has such a law?????

As a point of reference, I taught Basic Real Estate Marketing for ERA Real Estate in Kansas, Colorado, New Mexico, Texas, and Washington. No such laws there. Now, is it really ethical for a real estate sales person to over list a property? Could be but if it was against the law fully half of the real estate sales people in the country would be in jail.

When teaching new agents..we always said " get the listing at any price and then convince the seller to adjust your competitive marketing position (lower the price)". The agent is looking at it from an entirely different prospective than the appraiser!

Mike:

I have seen it written in the Law, but like you said it may have been written into an ethic upgrade, or it could have been included in the Law on Agencies that was included in the Real Estate Statue a few years back. I don't do Sales any more, but I know the Agents don't intentionally violate that Rule.

At the time this procedure was fully practiced, the Agent was using it to give them an edge in procuring Listings. I.E., by making the Seller think that a much higher Sale Price was possible that what his competitors had suggested to the Seller. In otherwords, making the Seller think he could get the Seller more money, but when the offers were received, they ended up being what the competing Lister had indicated, which was much lower than the List Price. This indicated that the Listing Agent has grossly misrepresented himself. I think that some of these Agents got Sued. This is when the Law or Rule was changed to prevent (more clearly) Agents from acquiring Listings under false pretenses. Misrepresentation has always been a part of the Licensing Law.

Leon

 

[Leon Stewart]

The Appraiser is in a no-win situation when he/she thinks about filing a complaint against a Realty Agent. First of all most of the Agents criticism is directed to the Loan Officer, and it's the Loan Officer who would indicate to the Appraiser that the Value is less than what he needs. Rarely would the Agent contact the Appraiser directly, even if the Agent has some other Comps for the Appraiser to look at. In that case the Agent will give the Comps to the Loan Officer, and the Loan Officer would communicate with the Appraiser.

The most the Appraiser can expect from filing a formal complaint is that he will never get another opportunity to appraise that Agent or Agency Deals again, and if the Appraiser gets in the habit of filing against other Agencies or Agents (They all do the same thing) he could end up with no work Assignments from any Realty Agents, and unless he's located in an isolated community where he is the only Appraiser in town, he can pack it in.

The way this System is setup, both the Realty Agent and the Lender has a conflict of Interest since they have complete control over the Appraiser, and they can do whatever it takes to get their deal closed (they will go to another Appraiser to get a 2nd Appraisal), but it's the Appraiser who gets the blame if there is a problem with the Appraisal Process.

Leon