Being Asked To Testify Regarding My Appraisal

[Mike Kennedy]

Hi Kelly;

Avoid ANY opinions not DIRECTLY related to statements of facts that you reported in your report!

INCLUDING an additional Opinion that "and the other sides appraisal is not."

UNLESS your new engagement includes Review of the other appraisal report - (obtain written confirmation in the client's engagement letter and include "Review Appraisal on prior appraisal by a different appraiser" - as a separate line item in your Invoice.

 

[hastalavista]

There has been some good (and not so good) advice here.

I'll give you mine, and you can judge it for what it is worth:

Signing the affidavit simply certifies that (a) you did the appraisal; (b) you are an appraiser and are experienced and competent to appraise the specific property; (c) the report's value is the value you concluded in that appraisal, and usually; (d) how experienced you are (in terms of total practice and how experienced you are in that particular market; many times the certificate will include how long you have appraised in that county and approximately how many appraisals you completed in that county).

Many times that is all that is required in these cases. The attorneys require these affidavits so they have a basis to enter the appraisal as evidence. Unless the case is being contested, there is nothing else that the appraiser is asked to do.
My personal business practice is to provide my client's legal counsel such an affidavit if the client requests it. I do state that if I need to testify as an expert, that's a different service with a new fee schedule.

The attorney is asking you to be more than a witness of fact. The attorney is asking you to testify to the credibility of your appraisal and to the differences between your appraisal and the other side's appraisal. That is expert witness testimony and if you are going to do it, you should figure out (a) if you are comfortable and competent (the "competent" part here is no dis on you; many appraisers have no desire to testify in court; it is a niche service which one either wants to develop or doesn't) and (b) how much you want to charge for your time & expertise.

I don't want to slice the baloney too thin here, but in my opinion, there is a difference between comparing and contrasting my report with another report, and completing a SR3 review. As an appraiser, I must always follow the USPAP when engaged as an appraiser; and if I'm going to form an opinion of the quality of another's report, then I must follow the procedure outlined in SR3. Comparing and contrasting two reports does not (IMO) rise to that level, but one must be very confident of where the line between the two exists; if uncertain and you want to proceed, then the best advice is to follow SR3 regarding the other report. However (and again, IMO) that has its problems because you will have to really keep the bar high on your impartiality: consider- you have done your report and (I assume) the other report has come to a different conclusion. Most would consider there is a level of bias inherent in the situation where your report and another's conflict, and then you are reviewing the other report (how can you not have some level of bias?). While this can be addressed, it isn't ideal.

You are under no compulsion to do anything but testify to the facts if called as a witness of fact (unless the judge orders you to expand your factual testimony to expert-opinion testimony). So just because the attorney is asking you to go beyond a witness of fact doesn't mean you have to oblige him or her. If you have any hesitations, tell that to the attorney and chances are good they will not engage you as an expert. They can always engage another appraiser to review the other report (or both) and make a decision on what they want to do with those results.

Good luck!

 

[Mike Kennedy]

"Appraisal Review in a Litigation Support Role" 2000

"While the appraiser who has prepared a report at the attorney’s request is often in an
excellent position to provide litigation support, that appraiser may be viewed as being so
supportive of his or her own report as to lack objectivity."

http://www.jurispro.com/uploadArticles/Friedman.pdf

 

[DiverMike]

Exactly, and yes, call your E & O too many times and like the boy that cried "Wolf", they may decide to ditch you.

Some lawyers are pretty "cute" about questions and when you see a question that is a little off, don't hesitate to ask they repeat it. I am also careful that when asked questions about the lender, the client, the borrower, whatever, I generally try to say that's not my job. Your experience shows that a savvy lawyer can trip you up and depositions are a serious matter. I think now I may want to see the transcript of those depositions after hearing your experience should I be called to testify again.

Nice post.

Thanks Terrell. I try hard to respond meaningfully to appraisal issues when asked. Usually no one person has the exact, always right, answer; but collectively one can usually get a pretty good idea of what's needed. Also, it took me awhile, but I try to limit my ad homonym 'attacks' to political forums now days. Why upset someone that just might have the answer to my next challenge?

 

[Mark K]

I've testified about a dozen times; usually for divorce or eminent domain issues. I've never once felt the need to contact E&O. Testifying is often simply part of the job.

Unless someone has notified you of a problem with the appraisal or the specter of a potential claim is apparent, leave E&O out of it, charge accordingly and testify. Study your report closely and review all data in it for accuracy prior to giving testimony. Take your time with your answers, be certain that you are answering the question being asked (per Terrell), and don't ramble. Just the facts ma'm, Joe Friday approach, works best. If they ask about another appraiser's report, how it compares to yours, tell them you can't answer accurately because you haven't reviewed it (assuming you haven't).

Its nerve-wracking the first time buy after a few times (if this happens again) you'll realize that this is just part of a huge business; they most likely are not out to get you. Its not like the courtroom drama you see on TV; its just business.

 

[Pat Butler]

I see a huge problem in using an appraisal prepared for mortgage purposes for BK litigation- not the least of which is the preprinted language in the Fannie forms which prohibits their use for anything other than lending purposes. And a high quality appraisal meant for litigation would probably not want to be constrained by Fannie's most-recent/proximity requirements.

All of these concerns should have been addressed when they first contacted you about the BK situation. I would have offered to do a brand new appraisal for them at that time, and certainly at a much higher fee.

 

[JRS at OBX]

I've been in the OP's situation a few times. You do an appraisal for preforeclosure or a troubled asset. The bank (or their attorney) calls because the borrower filed bankruptcy. The bank is basing their opinion of value for the collateral on your appraisal, which is why they hire appraisers in the first place.

In one of my cases, the borrower wanted to give a few properties back to the bank in exchange for reducing or eliminating the debt. They tried to convince the court that my appraisal was too low. They actually said under oath that one of my appraisals was one million dollars low!!! (WOW!) In this case, they did not have another appraisal to contest my value. They had an accountant, a few real estate agents, etc. The judge grew impatient after several hours of testimony and asked for their appraiser to testify. When it was revealed that they didn't have an appraiser, they took a short recess. After the recess, they agreed to work out the details based on my appraised value and I was allowed to go home without testifying.

Another case involved a borrower trying to keep their property. If they had equity in the properties, the court would make them sell. They testified under oath that they felt my appraisals were too high. They actually had an appraiser who was from several hours away and didn't even look at the properties. He did some kind of restricted desktop appraisals which looked more like a broker price opinion. My client's attorney burned him like a witch at Salem. His testimony was so bad, they took a short recess. When they returned from recess, they agreed to work out the details based on my appraised values and I was allowed to go home without testifying.

I made a good chunk of change testifying....or rather not testifying. I charge door to door and bankruptcy court is a few hours away from home.