In this case, the roof inspection brings up the problem where many "small lies" add up to one large lie.
The first implied "lie" is that it's okay for the buyer to be non-committal on their offer because the appraiser will help adjust the price to the "true" value.
The second implied "lie" is that there is a single precise and accurate value for every property, that the opinion of value offered to a lender is always exactly the same as the opinion of value that would be offered to a buyer or seller, and that the appraiser is capable of determining that exactly specific and accurate value.
The third implied "lie" is that the appraiser's opinion relies solely on a component-by-component analysis of the subject property.
The fourth "lie" is that the actual scope of the appraisal is unaffected by the intended use, that regardless of the situation, every appraisal has the same level of inspection, analysis, and accuracy.
These "lies", taken together, can put the appraiser in a logically indefensible situation. In this case, if the offer actually is influenced by the appraisal, and the appraiser has determined an exact value based solely on the sum of the property's components, then there is absolutely no reason why an appraiser should refuse to adjust the appraisal by exactly the amount dictated by the roof inspection and stand by while the borrower renegotiates, based on the new opinion of value.
Okay, no big deal. The appraiser maintains their foolish consistency and changes their opinion of value by the exact amount of the roof repair. But then what happens if the borrower realizes how easy it is to game the system and starts coming up with more unknown expenses, one after another? The appraiser's only options are to either go back and explain that they shouldn't have offered the misleading implications (the "lies") in the first place or to stonewall the lender/borrower/agents and shut down communications.
(Please forgive my use of the word "lies" but it best makes the point. I'm not trying to suggest that all appraisers who make a few logical inconsistencies are some sort of evil liars.)
Of course, bottom line is that the appraiser should consider all evidence and data and conclude at their best unbiased opinion, but (and here's where we disagree) without misleading the reader as to the precision of our analysis or as to the degree of influence of the contract in the final opinion of value.
It's somewhat misleading to imply that the appraiser has precisely calculated a single exact value, independent of the current offer. It's far less misleading to state that the final opinion of value was selected as a reasonable rounding point within a range of reasonable values. And, when appropriate, it's less misleading to state that the contract price was considered to be a reasonable "rounding point" for the final value opinion. And, from a practical viewpoint, just as important as being misleading is whether or not the opinion of value is defensible. Any report that implies a high level of precision is easy to attack, as is happening in this case.
Of course, it is conceivable that appraisers could be used as "Value Inspectors" with all the borrower-related connotations incorporated into that term, but it goes against the intent of our Intended Users provision and invites the question as to whether the report should be written for the eyes of a fairly sophisticated underwriter or for the eyes of the layperson borrower. If we wear the hat of Value Inspector, aren't we also then assuming the duty of explaining to (and perhaps even negotiating with) the borrower? Again, small lies beget larger lies.
As with any other contract terms, it's probably appropriate to comment whether an Appraisal Contingency clause has any effect on the offer or on the final sales price. I don't know if there was an Appraisal Contingency clause in the transaction we're discussing but it sure seems like this appraisal is turning into my worst nightmare, where appraisers don't merely analyze values, they knowingly determine prices. (And incur all the liability that comes with that role.)
Best course of action? (Thinking out loud here.) Clearly outline the methodology used in the report and don't imply that the opinion of value is something that it's not. Clearly state that the lender is the only intended user of the report and that the final opinion of value is made with the lender's best interests in mind, not the borrower's, and for that reason the borrower should not rely on the appraisal. (If there is an appraisal contingency in the contract, re-emphasize that point and report on the effect of the appraisal contingency.)
Clearly state that the borrower's right to a copy of the appraisal does not change the intended user(s) or intended use of the appraisal. Perhaps even re-iterate the appraisal appeal process, whereby there is no communication between the appraiser and the borrower or their agent but that new or additional data provided by the lender, in writing, will be fully considered and reasonably addressed in a written response to the lender.
..........and hang up the phone.
