High end home appraisal

[Fernando]

I got this order and not sure if I should take it.
The value is $5 million. My E&O doesn't go that high. It's a super jumbo loan amount.
I forgot if there was a question during renewal asking appraising over certain amount.
I don't like to do high end but the appraisal fee is good about twice fee of my normal appraisal fee. Should I ask more or not take it?

 

[Terrel L. Shields]

i'll pass

 

[Fernando]

i'll pass

Really? I thought you do everything.
Still discussing with AMC. Seems like no one's taking it.

 

[The Warrior Monk]

I have piles of these sitting on my desk.

I specialize in the appraisal of very high value residential properties. My advice is to only appraise them only if you are competent to appraise them, and charge accordingly. Don't get involved in appraising properties where mistakes can cost the lender millions of dollars, because they're not going to ignore those mistakes.

 

[Fernando]

I have piles of these sitting on my desk.

I specialize in the appraisal of very high value residential properties. My advice is to only appraise them only if you are competent to appraise them, and charge accordingly. Don't get involved in appraising properties where mistakes can cost the lender millions of dollars, because they're not going to ignore those mistakes.

I'm asking lender how much is the loan amount.. It may determine my risk level in taking the assignment. Or ask for higher fee.

 

[The Warrior Monk]

I don't base fees on loan amounts. No all assignments are for lending.

 

[Fernando]

The loan amount is $3 million. With estimated value, could be near 70% LTV. That's too high for my comfort level.
When I was younger and less assets, I would have taken the assignment.

 

[KHS445]

Obviously, I am not a lawyer and I have never been involved in a lawsuit where an E&O policy was a factor. That said isn't the E&O policy there to protect you from loss/damages realized and proven by the opposing party? If that is the case, if you had a $1,000,000 E&O policy wouldn't you have to make a $1,000,000 or greater mistake for the claim to exceed your policy limits? So on a $5,000,000 property you would have to make a 20% or $1,000,000+ mistake in your valuation in order to exceed you policy limits.

Frankly if you are missing the market by more than 20% you shouldn't be appraising, especially higher value properties. Now if you are not comfortable valuing properties greater than a certain dollar amount, good for you and you should avoid them. As many people have pointed out in this forum, to make good money appraising property one either needs to turn and burn or specialize in a certain market segment and to charge accordingly.

 

[glenn walker]

I got this order and not sure if I should take it.
The value is $5 million. My E&O doesn't go that high. It's a super jumbo loan amount.
I forgot if there was a question during renewal asking appraising over certain amount.
I don't like to do high end but the appraisal fee is good about twice fee of my normal appraisal fee. Should I ask more or not take it?

The total amount on a E & O is way more than any damages would ever be awarded that would mean on a $5,000,000 loan if it defaulted the lender or others had suffersed a 100% loss. That doesn't happen in the real world the largest claim I have ever seen was upwards of $300,000-but on a $8,000,000 property and most are settled without going to court and usally very small. The biggest one I saw was in a fraud case - BUT- guess what E & O does not cover Fraud so the appraiser was hit with a few million dollars Judgement-he went to jail and filed bankruptcy : Fernando As Your Disbarred-Attorney I say you have no issues- Just don't tick of anyone because they have enough money to sue you in a civil court : ) LMAO

 

[glenn walker]

Actually It wouldnt scare me with $1,000,000 coverage, I would have to commit fraud to be off by a million Bucks and even though I am not as good as the Great Fernando probably a +/-$200,000 would be the biggest mess I could make JUST MAKE--BUT- Make sure the borrower is not a High Powered Attorney they love to sue little guys like us : )