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Following a bad report

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JayByers

Thread Starter
Freshman Member
Joined
Aug 11, 2006
Professional Status
Certified Residential Appraiser
State
Wyoming
So I look at a house today for a refi and the home owner indicates this is his second appraisal in 6 months because of health reasons, wife just died and so on and so on. Any way the owner says the last appraisal was 195,000 and was curious what the market was doing. Well after 20 minutes of talking with the HO and smelling all the dog and cat smells this place has and looking at all the deferred maintenance I finally get out of there in time to take my allergy medicine.

well long story short, this place was over valued by at least 40,000 based on location, size and condition and the highest sale in the last 2 years has only been $189,000. So my question in this mess is what to do. Finish the report and put the file away. the HO is a retiree and his first mortgage is already over what the house is worth. Do any of you ever call the Ho and talk with them after doing the report and give them some advice on how to pursue fixing there problem, call the state board and let them know about the over valueing appraiser, or collect the fee and move on.

Oh well just venting i guess, its frustrating to see this type of thing.

thanks
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
So my question in this mess is what to do. Finish the report and put the file away.


You finish the report, making sure that you tell the HO to ask for a copy of the report. This way he will have a better understanding of reality.

Do you talk to him before finishing the report? No. Read Certification 17 which says that you have no personal interest or bias with anybody involved in the transaction. Sympathy for someone involved in the loan is a form of bias.

Staying out of the borrowers problems is one of the hardest things for an appraiser to learn to do. You feel sorry for them or think they are being taken. But it is not our concern. If it is, then we loose our independent status.

Just do the best job you can so the HO will have a real opinion of value upon which he can act if he chooses. It is sort of a backhand way of helping but it works.
 

Mike Plumlee

Junior Member
Joined
Feb 21, 2007
Professional Status
Certified Residential Appraiser
State
Texas
What Richard said, in spades.

I have empathy for hopeless situations, but there is nothing you can do to right the situation. Remind yourself to do what is right in your job and not what is right based on conscience.

Funny. But I tell my wife an appraiser is just like an umpire behind home plate. I don't care if Mickey Mantle were batting, that pitch got the outside corner and that, sir, is strike three. That would bother me to ring up the Mick, but the pitch is what it is.
 

Ken B

Elite Member
Joined
Feb 18, 2004
Professional Status
Certified General Appraiser
State
Florida
Life's hard. You weren't retained to make it easier. Do the appraisal and be prepared to answer the phone calls.

I had a similar job a couple of years ago. It was a difficult decision standing in the guy's kitchen, listening to his sob story, knowing there was no way that the value would be anywhere near what he was telling me he thought it should be.

Of course, the lender could not make the deal work. Of course, the guy went to a different lender. Of course, the different lender wanted me to reassign the report. Of course, the different lender wanted me to do another appraisal when I told them I could not reassign. Of course, I turned down the assignment. I couldn't take any more of the guy's money. If he wanted to spend it, they had to find someone else to take it. End of story for me.
 

Hamlet

Elite Member
Joined
Aug 14, 2006
Professional Status
Certified Residential Appraiser
State
Ohio
I understand where you are coming from, but you must not communicate with the homeowner. They are not your client and you cannot advise them in this matter.
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Complete the appraisal and send it in. That is all you can do. No more, no less.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Just complete the appraisal and do the best job you can. Make it understandable to the client so when the HO gets their copy they will be able to understand it.

I hope when you were doing the inspection you made darn sure to tell the HO that your client is not the HO but the lender. I make sure to let them know that I cannot and will not get into the middle of an argument concerning their value and their lender. My allegiance is to the client, no matter who pays!

I tell the HO to make sure they ask for a copy of the appraisal if they want one, the lender is typically required to supply one.
 

JayByers

Thread Starter
Freshman Member
Joined
Aug 11, 2006
Professional Status
Certified Residential Appraiser
State
Wyoming
thanks for the replys, guess its been one of those days that everything has been getting to me, I guess i better have a beer and contemplate where to go snowmobiling this weekend, 250 hp at wideopen will always make a person feel better.

thanks
 

ROBERT JONES

Junior Member
Joined
Feb 12, 2002
Professional Status
Certified Residential Appraiser
State
New Jersey
As stated, having empathy for the borrower is one of the hardest things to get over. In 21 years I have given one fee back and that was on a deal where the appraisal was a non-issue. It was Christmas time, a super sad story, sick wife, husband just back to work, babies running around with runny noses... - it struck a chord with me. I sent the check back a with a personal note, they sent a nice christmas card to my office with a personal note as well.

Anyway, my credo for most of the time has been - If they are that stupid to think their house is worth XYZ, then I am smart enough to take the fee and educate them-

Like Lt Mike Metcalf says - "That's our job"
 
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