ERC....Strange Questions

[Charlotte Dixon]

Completed an ERC appraisal last week and it was, I'll admit a piece of work. It's a unique property along a branch of water and I found two current comps within the market area, only on a much nicer body of water, and adjusted accordingly. I used them, along with another current comp having a location in a water community, but no water frontage. They were the best I could find, similar in style and sq.ft.living area, and stated all of that in the report. The "reviewer" of the relo company called and asked?
Why didn't you use the comps the other appraiser used? I'll send you the MLS numbers, you look at those comps, and see if they will be of HELP to you. By this time I was getting tired of being strong armed. I went out there today, measured exactly to the inch and came in 16sf less than I had the first time.
1) I'm not taking any more work from this company
2) I reconsidered and made a forecasting adjustment, which lowered the anticipated sale price, some
3) I'm sending them an invoice for this extra trip

Have any of you dealt with ERC companies this unprofessional? I haven't.

 

[Restrain]

The issue comes when the two appraisers are more than 10% apart. I have had that happen a time or two, generally in a unique property, like yours, or where there is a difference in how much loss a 6 month old home will experience where the builder is still in the market. However, the attitude of the person from the Relo company was extreme from my experience with them.

 

[Jo Ann Meyer Stratton]

I have received similar calls from relo companies, but they had much better manners. The other appraiser is also receiving the same phone calls. I explain to the reviewer, usually only verbally, sometimes I have to put my explanation in writing, of why I didn't use the other comparables and why they were not in my opinion appropriate comparables or why my square footage is differant. I haven't ever had to go back and remeasure because either a county record or a MLS listing or it is the third time I have appraised the property and there are two or more verifications of my square footage as compared to the other appraiser. Or it is obvious by looking at the sketch and photos that the other appraiser squared a section instead of showing that bump out or counted the same GLA on the second floor when there are two story height rooms that are obvious in the photo, etc. So the consolation to you is the other appraiser is getting the same treatment.

 

[jtrotta]

Never had an ERC company ever not question something; it's the nature of the industry, it does do one thing for you - it keeps you on your toes, the Fee's are good and they pay promptly.

Charlotte, take it with a grain of salt; don't be so defensive; and always ask for the other appraiser's work - they've already asked for yours 8O


8)

 

[Blue1]

Charlotte,

No, I have not dealt with ERC companies but have dealt with realtors and lenders just as bad if not worse. My suggestion is that you "stick to your guns" sounds like your value is "golden" and the other appraiser's value is just "fools gold." If this company can't see that, then they are not worthy of your professional and ethical expertise. Cull them out. There'll be other BETTER clients. Hang in there......

 

[Charlotte Dixon]

I've done ERC's for a number of years and, find that this particular client trys to "beat" each appraiser down on the anticipated sales price (more than most). After a good night's sleep, and after reading your comments I can view my experience a little more objectively. I think it boils down to this particular reviewer, who was blunt and rude. Yes, the fees are good and I'm getting ready to raise them again because we know how time consuming this work is. This particular company pays in about 8 weeks. One thing I keep forgetting is that most of the processors, reviewers and background people go home at 5 p.m., have a life, get a good night's sleep, get sick days, vacation days and are fresh as a daisy when they start their day. On the other hand ....... :roll: ......I'm waiting for that snow storm that will shut things down for 3-4 days! Of couse, with EDI, there's no excuse anymore, is there? Thanks!

 

[Richard Carlsen]

Fourth Rule of Appraisals

When two or more appraisers appraise the same property, the appraiser who came in with the lower value, the smallest square footage, the most functional depreciation, or whose findings are furthermost away from the desired value obviously made a mistake and will be required to revisit the property and find the errors of their ways and make appropriate corrections.

In like manner, when only one appraiser appraises a property and the value is less than what the owner thinks the property is worth or less than what the owner needs for his loan, that appraiser has obviously made a mistake and will be required to make all corrections necessary to meet the owners expectations, needs and wants.

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The Underwriters Handbook to Getting What you Need Out of Appraisers, pg 16, 2001 edition

 

[Charlotte Dixon]

Thanks Richard! :lol: I had the highest value, and the least sq.ft.living area because the other appraiser counted the basement. We both had to re-measure. This was a case of night and day. As stated, I re-evaluated days on market (over 120 days) time of year, and market area. I see now I should have applied a forecasting adjustment, which I now have, along with a market change adjustment. This was a real can of worms! My anticipated sale price is almost $80,000 under the list price (270K) and the other appraiser is $100,000 less. I'm tired of this job and want to move on to more simple ones! :lol:

 

[Steve Owen]

I love doing re-lo's for one reason. The main thing they really care about in the end is whether you were close to the actual selling price they got. Their representative may come off as rude now, but if you are the one who is within 3% of par, you'll be the heroine and you'll also be the one they call for their next job. What she is probably trying to do is keep from having to order a third appraisal. Also, even though you are high, she is probably calling the other appraiser to try and get them to raise a little (just not with as much pressure as she is applying to you).

About the measurement issue: I always take about 50% more time with these than the typical job. I check and recheck everything. Funny story: Re-lo company calls and says "you put the stairway in a different location than the other appraiser." Subtext: you must be wrong because you were the high appraiser. My reply: "The stairway happens to be in my photo of the basement den; compare that to the floor plan and call the other appraiser."

Sometimes it's kind of hard to rearrange our thinking. We are so used to getting pressure from the LO to raise our opinion of value; with these guys, your always getting pressure to lower it. It just goes with the territory. However, another nice thing about re-lo work is that they usually supply you with information about why they think you should lower the value. I usually review all their info carefully, and then tell them exactly why I'm sticking to my original opinion of anticipated sale price! lol.

 

[Verne Hebert]

I have quite a few calls similar over the years with regard to relo's. I have done them for PHH and Cendant for twenty years. Recently, a new firm in Jersey? took over the relo work from Stars for Cendant. I had a good relationship with the Stars people, who were appraisers. This new firm has clerks.

And y'all know how I feel about clerks.

My first experience with them was recently on the most complicated relo assignment I have ever done, actually in Glacier National Park.

But don't forget, they are doing their jobs; in this case they are clerks however and not qualified appraisers.

When any disparities exist, they must call and clarify. It really blows their minds when comps vary. And if you are the low appraiser, and the owner is not happy, they have a grievance procedure.

Not too long ago, I receive the longest list to respond to that I have ever had. I was "really low" and four appraisals were done. I courtesy called the REO rep and told him I would have a complete response to him in 7 days- $ 200.00, and I had no intention of educating the homeowner on the appraisal process, but would only address market and property specifics--this property sold $ 2,000 lower than my value in 170 days.

My wife is an appraiser also, and also takes these calls very personally. I don't. My comment to them is " the proof is in the pudding". When it sells we'll all know, until then, you have paid me to to a job and I have done that.

I have always found them willing to compensate me for any additional work.