Bad Appraisers ?

[Terrel L. Shields]

Elsewhere was an argument that basically asked if people thought there were no "bad" appraisers out there (as if a given that there are, and hence needed to be vetted). OK. I bite. What is a "bad" appraiser?

We have a myriad of regulatory mandates. We have folks who have been around at least 5 years and very few that have been around less than that. So "experience" doesn't seem to be an issue. What makes a "bad" appraiser?

When someone fails to comply with the mandates of an AMC - rules that have nothing to do with USPAP - is that a "bad" appraiser?
When someone fails to comply with fannie mae rules, (or FHA, whomever) but otherwise is USPAP compliant (ignoring that in itself is a USPAP violation) is that a "bad" appraiser?
Is lacking a degree and writing your reports on a Big Chief tablet make you a "bad" appraiser?
If you have a complex property which lacks comparable data, and you try to use innovative methods to arrive at a value, is that a "bad" appraisal?

So what is a "bad" appraiser? If it is someone who fails to follow USPAP, who gets to make that determination? Your "peers"? A reviewer? The board? What if you turn someone in and the board finds the report adequate? Doesn't that imply your judgment was bad thus, you are the "bad" appraiser?

Seems to me that there isn't exactly a bright line difference. To me, competence isn't and cannot be equalized. Deliberate actions can be legit or fraudulent but I can't make that determination - it's someone else's call. There are a lot of nuanced issues surrounding "bad" appraising vs. "good" appraising.

 

[glenn walker]

Don't get a headache thinking about this issue because a bad appraiser to the public is one who killed their deal by coming in lower than contract and a bad appraiser to the bank or AMC is one who did not provide 5 or 6 good comparables of similar age, size that required minimal net and gross adjustments. To the reviewer or the appraisers peers there is no such thing as a good appraiser or a good appraisal because appraisers by nature are non-objective and very critical because the report under review was not completed the same way they would have done it and therefore the only correct methodology is theirs.

In Summary: When all else fails Review Appraisers and State Boards fall back on the USPAP issue because there is no such thing as a 100% USPAP compliant report . The poor appraiser could have five USPAP instructors review the appraisal and it would get dinged for something because it's written and designed to be used by his prosecutors to prove he/she is a bad appraiser.

 

[J Grant]

We all may have an idea of a bad appraiser, but my idea is that of an unethical appraiser, who purposefully sets out to produce misleading assignment results. The second bad appraiser is an incompetent one so dense that they don't realize they are incompetent to do an assignment and need help. I hope I have not just described myself (a joke... I hope)

RE agents or the public may think a bad appraiser is one who does not make value and an AMC may think a bad appraiser is one that is slow for turn time or insists on higher fees. A state board might have a limited focus on USPAP violations without regard to value or other credibility issues that may be present (or absent) in a report. Is this thread about asking appraisers whom they consider to be a bad appraiser?

 

[Mike Kennedy]

Those who do not do what they say they do in a report. Those who have no understanding of, import of, nor the liability of the certifications they sign. Those who haven't met a contract price they haven't loved regardless of what the facts about a subject's property are OR what the truly competitive market clearly dictates. Those who blithely skip on with zero respect for, or consideration of, how clients and the public regard Appraisers as a group because they are enabled, and permitted to, by "clients" and other Appraisers.

 

[bnmappraisal]

I like the topic Terrel ... good question

 

[Terrel L. Shields]

Don't get a headache thinking about this issue ....
In Summary: When all else fails Review Appraisers and State Boards fall back on the USPAP issue because there is no such thing as a 100% USPAP compliant report . The poor appraiser could have five USPAP instructors review the appraisal and it would get dinged for something because it's written and designed to be used by his prosecutors to prove he/she is a bad appraiser.

Now that gives me a headache...

 

[gregb]

While there may be bad appraisers, either incompetent or unethical (or both), it's bad appraisal reports that should concern the review appraiser.

 

[J Grant]

While there may be bad appraisers, either incompetent or unethical (or both), it's bad appraisal reports that should concern the review appraiser.

Correct, the reviewer reviews the report. However, a bad appraisal report was written by an appraiser...even though the reviewer address the work and not the person..

A "good" appraiser can produce an occasional "bad" report...deficient in some area . But overall, good appraisers strive to do good work and produce it on a consistent basis. A bad appraiser can turn out some good or acceptable reports. But overall they produce more bad work than good, either because they don't spend the time, lack the knowledge, or have the knowledge but use it to manipulate assignment results rather than produce unbiased results.

 

[Terrel L. Shields]

To me a bad appraiser is someone who commits deliberate fraud or is so sloppy in their work they make serious errors. All of us miss something, and in doing so, we have some exposure to liability. Did we not notice the septic field surfacing. Did we not flag that slightly pink tinge to the water. Did you note the crack in the foundation. Did you see the leak stain in the closet and identify the source?

I no longer allow myself to be rushed, but back in the 2000s that was a huge issue with almost all the appraisers I knew working six days a week and long days at that. It is easy to miss something. And there are always a few folks whose judgment is suspect. They simply don't have good logical sense. That is something that is rarely correctable, and usually means that person should not take on the more complex assignments that lead them astray. I have a helper like that and learned to never send her out to do a complex job. She was good at inspecting it, but making judgments around comp selection and vetting the value, not so much. I had to step in at this moment.

 

[J Grant]

Agree...work has to be judged by the work. But what makes a bad appraiser is intent of the appraiser, as with a professional. A good doctor may make an occasional wrong diagnosis or miss something, but they try to get it right and spend the time needed on each case/patient. Whereas a bad doctor will take on huge volume with careless diagnosis, over prescribe or run a pill mill, or take on cases they are not qualified for in order to generate high billing.

A bad appraiser could so incompetent they don't know they are bad ( a small minority imo), or takes on too big a volume of work to devote personal time to, with a lot of delegation and outsourcing in hope nothing so awful is in a report to lose license over, or uses their knowledge to produce misleading or agenda driven assignment results that favor deals or client interests for the purpose of generating more work or higher fee work .