Appears the property value was badly inflated anyway....in my state you have to jump thru hoops to be able to sell a property for $60,000 unless that is at least 2/3rds the appraised value. Someone must have appraised it for far less.
There are a slew of mistakes. One obvious to the as is value, to me, is a hypothetical condition that appears to walk hand in hand with the value. Namely, is it going to take $50 k to convert / restore to a Bed & Breakfast. The appraiser is then appraising the income stream as a Bed & Breakfast. "As is" the property has no income potential as a bed & Breakfast. "Subject to" would be a hypothetical condition that could have been an out for the appraiser.
I cannot, however, but think that the judge merely used logic. He appraised it for $400,000, and it sold for $60,000. His appraisal cannot be right. And I agree.
When you are asked to appraise a property "as is" that has defects, you need comps with similar defects or make an appropriate deduction. It does not hurt to explain which is which. I see this adjustment in the effective age box too often. Short term functional obsolescence, to me, should be adjusted under condition.
Almost all the complaints that I have seen filed against appraisers have come from third parties - very few are filed by clients. The Courts have upheld the doctrine of third party reliance on appraisals time and again.
You would be supprised by the number of appraisers that don't get it or recognize their liability to parties other than their clients.
we're going to go in the opposite direction on this one, just for the sake of conversation;
First off; both Seller & Buyer need to be brought into court to disclose the contents of the "Sales Agreement";
Secondly; we have the Seller holding a $330,650 purchase money mortgage, after the sale closes, the Seller hires the appraiser, who specializes in appraising Hospitality Properties. Truly appears to be a set up by the Seller/Buyer for negligent misrepresentation, are the Seller & Buyer in colusion :?:
Thirdly; Now we have Private Mortgage & Investment Services Inc., Buy the $330,650 mortgage at a discount of $200,00 (approx. a 60% discount :?: ) can you tell me the "Seller" is stupid 8O almost an investment wizard :wink: plus the Seller pays a $12,000 brokerage commission (an additional 4% +/-) :lol: This also means to me that the PMIS - believes there is $200,00 in value at a minimum (did they check the value or just Buy on a whim :?: )
Some one quickly git me this idiots TELE or Address - I need money badly. Add PMIS # to that, this way we can make up value for some Investment idiot that doesn't even check if the value is there.
Fourth - the Lender (PMIS) sells the property for $60,000 - now I've heard it all, this is a "scam" to find a scapegoat and you got a Judge to buy this whole scenerio :roll: , this is from a college edumacated, previous attorney who, what, doesn't know whats going on 8O :?:
Conclusion; PMIS buys out original mortgage of $200,000 and after a year of non-payment, sells the property for $60,000 and has a write off of $140,000 against earnings, appears there's more to this than meets the eye, hey where's the IRS while this scam is being perpetrated :?:
Now whoever presented this case for the Appraiser - should be taken out back and shot and then hit with a suit for being tooooo stupid to be an attorney.
This is just another example of where the Appraiser is not functioning in an independent capacity as he should. It's quite obvious, as in most cases, that the Appraiser is being directed by other parties involved in this process to get a certain value, but it's the Appraiser who ultimately end up taking all the heat, and the individuals who will benefit the most goes scott-free.