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Ever refund a COD?

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Paul Burger

Freshman Member
Joined
Oct 23, 2002
In the last couple of months, I have received several orders from a national lender with the "loan amount", "owner's estimate of value", and "loan to value ratio" listed on the order form. Yeah, I know, they're telling me what they want me to come up with. Sometimes it works out in their favor. But lately, the "owner's estimate" is way above the actual market value. I mean, today I did one where the owner's value was $160,000 when the identical house across the street recently sold for $108,000! I did the inspection, collected the (full) fee, and left the property.

My question is this: I know good and well that my value will be in the $105,000-$110,000 range. Should I stop and alert the lender of the situation? And eventually refund all but my trip charge? Or should I complete the appraisal, send it in, and be done with it?
 

Frederick R. Ruffell

Senior Member
Joined
Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
Paul,
You have been paid to complete an appraisal. So complete the appraisal. If you accept an assignment contingent upon hitting a number then you are in violation of USPAP if you complete it or not. How long do you think you are going to be in business if you keep refunding money?
 
A

Anonymous

Guest
Paul,
The mortgage company doesn't care about the applicant and since the order came COD it costs them no money to order an appraisal. If you are like me you will call the mortgage company and tell them it's a no go situation, subtract a trip fee and refund the rest. You will sleep better this way.
 

xmrdfghap

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Florida
I know good and well that my value will be in the $105,000-$110,000 range. Should I stop and alert the lender of the situation? And eventually refund all but my trip charge? Or should I complete the appraisal, send it in, and be done with it?

Did you do the research necessary to determine where the appraised value will fall? Did you walk through the home, measuring it, looking at problems and amenities? Did you complete EVERYTHING except write the report? Do you have a file with your research and photos and MLS papers and maps etc prepared?

If so, you have performed what you have been paid to do. You have appraised the property. You may not have written a report, but if you communicate the value to the lender in a manner that is understandable and supportable, then the appraisal is completed. All that remains is writing the report......remember back in your first fundamentals class: THE WRITTEN REPORT IS NOT THE APPRAISAL!!! The apprisal was done when you felt comfortable about establishing a value, and when you say it is between $105,000 and $110,000 you have placed a value.....an appraised value.....a market value.....on the property.

Now tell me again, what part of the fee for your effort should you refund?
 

Michael Giampa

Freshman Member
Joined
Dec 14, 2002
Actually, tell the lender whats going on @ the actual value and depending on how good of an LO they are they might take them into a different program that they can still use. It only takes 5 minutes to make a call and if they can't use because the borrower was way off or the LO was a rookie just send it back minus an inspection fee. Its easier to look yourself in the mirror each morning!
 
B

Bemis Pownall

Guest
I refunded ONE COD
about 6 years ago.
Slimy X-client.

Trip Fees are good
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Okay, here we go. You did your job. Why do you want to work for free? And don't you think the homeowner probably knows the actual value of their house & just expected to find a rubber stamp for their inflated value? Too bad, they got caught and paid for a real appraisal.
 

Paul Burger

Freshman Member
Joined
Oct 23, 2002
David,

I always felt sorry for the homeowner. However, you make a great point. They'd have to be morons to think their house was worth $160k when they paid $98k for it two years ago. They were just looking for a rubber stamp appraisal. Screw 'em. I'm keeping the money.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
It's a business....... and it's my business decision that I do not give refunds when they get my opinon. Like Greg said, the work was already done, all that is left is 2+- hours of typing. I sell a service, and it doesn't matter if it is reported on the URAR, 2055, or toilet paper.
 
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