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Appraising expensive homes

Fernando

Thread Starter
Senior Member
Joined
Nov 7, 2016
Professional Status
Certified Residential Appraiser
State
California
When I have an order on an expensive home and the value is significantly over my E&O, I decline the assignment.
I could get a very good appraisal fee but it's not a good business decision to take such orders. Is that what most of you appraisers also do?
 

The Warrior Monk

Moderator
Staff member
Moderator
Joined
Mar 30, 2005
Professional Status
Certified General Appraiser
State
New York
I get the highest E&O coverage that is affordable. I appraise mainly 7-9 figure residential properties, but also have nearly three decades of experience doing so. I strongly recommend not taking these types of assignments if one does not have experience in doing so, and also recommend staying away from potential problem assignments.
 

A K

Elite Member
Joined
Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
My market does not go 9 figures. At least not yet. We got Chain Bridge Road that can support around mid-8 figures but that is about it.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
If you get sued what are the chances you'll be sued for the total value of the property? What is a reasonable limit? I don't do property over $3 million due to the extra fees the E & O charges, otherwise, i doubt I can be over $1mm off on a $1mm dollar property.
 

A K

Elite Member
Joined
Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
What kind of E&O coverage do you commercial appraiser have? The most I could get from LIA was $2 million each claim.
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
There's lots of stuff over $3Mil here lately. E&O only charges a little extra if you go over that, so I don't worry about it.
I did one in the flats of Beverly Hills last year, about 3700 SF on half an acre. Comps were decent not great, it was not all that hard. $8.5Mil. :shrug:

What I do watch for is weird stuff that lacks good comps. Some areas I usually reject.
If I got something up around 8 figures I would probably reject.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
For the last ten years I've carried $1M. I'm not that far off if I do a $2M house. No one has ever sued me or gone after E/O. I always have thought E/O was just to show the wooden cross to the vampires.
 

andrew81

Senior Member
Gold Supporting Member
Joined
Dec 5, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
i have $1m $1m and the highest sale price in my primary market is $450,000 with a median price of $80,000.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I still don't think you are liable for anymore than damages and the borrower is not an intended user. So how can a bank lose a $3mm on a $2mm house? They might lose $400,000 but unlikely.
 

Fernando

Thread Starter
Senior Member
Joined
Nov 7, 2016
Professional Status
Certified Residential Appraiser
State
California
I still don't think you are liable for anymore than damages and the borrower is not an intended user. So how can a bank lose a $3mm on a $2mm house? They might lose $400,000 but unlikely.
That's true but some jumbo loans over a million dollars are becoming more common here.
Sometimes the client let me know it's a jumbo loan but still don't know if over a million.
 
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