Blew a deal - LO is ticked

[LadybugLover]

Well, got a couple more emails from the MB last night and this morning. I "think" I have adequately explained the entire appraisal process to him that he understands now and has calmed down a bit.

It does amaze me that someone can live in a neighborhood with properties listed for sale all around them, flyers posted under the for sale sign, and they still don't get it that values have tanked? This borrower is in the construction business for pity sake - surely if anyone should know values are tanking, he should?

His last concern was that the borrower said his lot was bigger than I said it was - I used the dimensions from the Assessor's Parcel Map - I told him I am not a land surveyor and that if the borrower wanted to hire a surveyor and comes up with something other than what I have, I would be happy to review it. Not that a 1000sf difference in parcel size makes any difference in the value anyhow, but if he wants to split hairs, I can split them with the best of them.

I do feel bad for the borrower - he's stuck in an ARM that is adjusting and has a new wife and new baby and now he's probably going to have to figure out how to make the strokes on the adjusted mortgage. But is that MY fault? NO. He told me when I was at the property to do the appraisal that he intended to flip the house when he bought it, but things didn't work out that way. He KNOWS that the values have tanked, he was just hoping he had a dumb blonde appraiser and he could sweet talk me into anything. Uh, NOPE, not happening.

I just don't understand how anyone in this day and market cannot know what's going on in their neighborhood. Heck, we're in a new subdivision, built 4 years ago - we walk the neighborhood every few days and check out what's for sale and how much - now, of course, we're appraisers so we're curious - but don't "normal" people do that too?

Okay, vent over, I think the MB is calmed down and is not going to sent me to appraiser jail - I did tell him I had all of his emails printed out and in the workfile and that there were laws regarding Mortgage Brokers pressuring appraisers for values. That's when he changed his tune a bit!

Mary

 

[CANative]

Web,

Why am I not surprised that you are disturbed (again)? I see no reason for you to be disturbed as I have not suggested anything that would compromise the national security, cause a civil war or other unrest, or even advocate for gay marriage. We're just discussing appraisal practice in general and business decisions specifically.

I've been participating in this forum for a long time now and it can be a great venue for learning and networking but sometimes it just goes too far in insisting that everything must be dealt with in black and white terms when there are thousands of shades of gray and millions of colors. Sometimes the discussions are just silly.

Refunding a fee is just a business decision and I think a state board (the only one that matters) would have a hard time proving a contingent fee arragement even if for some strange reason someone brought it to their attention via the compaint process and then they bothered to run it down.

There are times when it is just better to consult with a prospective client and discuss a problem assignment. What's wrong with telling them that someone is stoned if they think market value is anywhere near their estimate? Sometimes it's just better to be a little naughty than it is to work all day on some report you know will end in grief for everyone and will make you look greedy and unethical?

 

[Webbed Feet]

<.... snip... >There are times when it is just better to consult with a prospective client and discuss a problem assignment. What's wrong with telling them that someone is stoned if they think market value is anywhere near their estimate? Sometimes it's just better to be a little naughty than it is to work all day on some report you know will end in grief for everyone and will make you look greedy and unethical?

Mr. Boyd,

Great questions! The problems are that technically that is arriving at a less than value conclusion and so doing a real estate appraisal that the appraiser is now liable for. Next, where do you suggest the cut off line for being naughty in order to avoid looking greedy and unethical should be drawn? $1,000,000? .. $100,000? .. $50,000? .. $25,000?... $10,000? ... How about $2,000 or $1,500 short of the wanted number? Here is the problem with that concept. You may say $100,000 ... but some client then is sure to say it should have been $50,000. If you agree to $50,000 .. the next client will demand it should have been $10,000. And so it goes until the ONLY non-greedy and ethical appraisal left would only be the ones that hit the needed number each and every time.

In the span of ten years, our industry has gone from a requirement to complete an assignment and turn it in regardless of the outcome so that a bank could deny a loan if needed, to appraisers being greedy and unethical if they dare to complete an assignment and turn it in if it doesn't hit the needed number for a mortgage broker. What is even worse is, obviously, too many appraisers have bought into this denigrating of our services so much so that it is now self-denigration. Our own rank and file now believe completing an appraisal when a loan can't be obtained, is something we should not dare to expect to be paid for. And that it is "good business" to expect and agree to not be paid when a loan can't be obtained. With some of our own rank and file actually starting to suggest to other appraisers that expecting to get paid is a greedy and unethical act.

The above overlooks the fact all these clients could try hiring us for desktop services first if they are in doubt. No, they want the full enchilada only and want it free if it doesn't come in the flavor they ordered. Only they ignore the fact that our enchiladas are supposed to only come in one flavor, the unbiased one. If they don't want them that way, they shouldn't order them.

Webbed.

 

[Amy Perkins]

Have you read up on the new laws regarding attempting to influence an appraiser in CA?

 

[Amy Perkins]

Number one, you work for the lender not the borrower and if it is too risky you need to do your job and say so. We should really be paid by the bank, it makes it confusing for everyone.

 

[CANative]

In the span of ten years, our industry has gone from a requirement to complete an assignment and turn it in regardless of the outcome

That's still the way it's supposed to be done but that's not how it is always done... now or 10 years ago.

The problems are that technically that is arriving at a less than value conclusion and so doing a real estate appraisal that the appraiser is now liable for.

So what and who's going to catch who for what? I've never heard of an appraiser being sanctioned by a state board for asking if someone is stoned. I don't even believe that any person would be taken seriously if they claimed that an appraiser telling a broker on the phone that their expectations are not reasonable is "technically an appraisal" even if "technically" it is.

I'm not saying that routinely doing comp checks, telling someone their out of the mind, or stopping and calling when a value can't be met is good appraisal practice or even good business. But there are times when offering some free information in a casual conversation is appropriate and results in less harm than more harm to everyone concerned.

 

[MARK JOLLIFF]

I would send them a new report with the value they want. Of course I would make the report "subject to" them adding a 100k in value!

 

[Webbed Feet]

Mr. Boyd,

Fine, then offer them raw neighborhood sales data, recommend they select their own comparable and look at the sales prices. Just don't offer an opinion or later renogicate a fee because the number they wanted wasn't hit when they did look over the raw sales data and wanted to proceed anyway.

Webbed.

 

[CANative]

Mr. Boyd,

Fine, then offer them raw neighborhood sales data, recommend they select their own comparable and look at the sales prices. Just don't offer an opinion or later renogicate a fee because the number they wanted wasn't hit when they did look over the raw sales data and wanted to proceed anyway.

Webbed.

Fine, then offer them raw neighborhood sales data

"Dude! $600,000!? What have you guys been smoking. Nothing's ever sold in this neighborhood or any other neighborhood in the county for more than $400,000 or so. Do you still want me to do an appraisal?"

 

[Mike Boyd]

hit the needed number or don't do the assignment, or if you do and can't hit it give us the money back[/COLOR]" ploy. Our industry members have constantly, and for years now, tried to suggest possible solutions to this issue. It's the mortgage side that will not accept any of them because they are not all free of charge and instantaneous.

Webbed.

I was just going to congratulate Greg on having some compassion for the mortgage broker. I think you missed the point. This is a very competitive business (the mortgage biz) and the loan agent probably doesn't have the money to return the fee. It doesn't hurt one bit to be nice, believe it or not. Just because YOU can walk on water with your webbed feet, some of us must be more diplomatic when dealing with clients.