Ruth Potulin
Freshman Member
- Joined
- Jan 26, 2002
Hi,
I have been reading your posts with great interest and thought I would weigh in on this topic.
I have an appraiser friend who was taken off the approved appraiser list of Indy Mac's because she came in too high on her value of a high end home that was for sale. Why would she have intentionally come in too high unless the value was there, since she knew it would cause her trouble to be higher.
For my own curousity and to give my friend another opinion of her appraisal, I did a field review of the appraisal. Her value was right on the mark. It was very obvious what the value was and her comps were perfect. The sales price was just lower than the property was worth and, when I talked to the listing agent, it was obvious to me that this Realtor had no idea what the value of homes in that area were.
Since Indy Mac dropped her, she was having to turn down appraisal assignments from her regular clients when they were funding the loan through Indy Mac. I started doing her Indy Mac properties on a split fee basis so that she could continue to service her regular clients, and be able to get a percentage of the fee in the process.
What astonishes me is that instead of the lender or mortgage officers saying to themselves, "Well, the appraiser is the expert on market value and would know the value better than the listing agent, so the sales price must be too low." Instead, many of them immediately suspect the appraiser of wrong doing or incompetency.
I have been an appraiser for 10 years and many times during that period I've been told by appraisers I work for, "Never come in too much higher than the sales price or the appraisal will be thrown back at you or possibly loose the client. I have yet to understand what the problem is from the standpoint of the lender or the mortgage company when a value is higher than the sales price.
Regarding coming in at the contract price: I appraised a new construction vacant custom home and while I was at the subject property the buyer was there measuring for flooring. He was about 25 years old and he told me that his grandfather told him that all appraisers come in at the contract price, no matter what the value really is. He politely asked me to please appraise the property for what it was really worth, because he knew it was worth more than the sales price (which it was) and that he wanted to use the appraisal at the true higher value to reduce PMI and get funding for landscaping.
What bothered me the most about that conversation was that even an ordinary John Q. Public knew that many appraisers hit predetermined values instead of appraising the property for what it's really worth. It is my hope and, even my dream, that all appraisers will join together and all at the same time refuse to make values, refuse to be pressured and refuse to appraise another property for any value other than the true market value.
This website is so fantastic in allowing all appraisers to share thier information and learn from each other. I have posted a topic under the heading "Improving the Profession/Political Actions" called "We Appraisers Finally Have Our Own Union." Please stop by and read the posts under that topic when you have a chance to.
I truly want to be able to be free as an appraiser in order to appraise a parcel of real property by gathering all necessary information about the property and then utilizing that data to try to "zero in on" what the free market was trying to tell me. Appraising used to be an art and a science. That's why the word "opinion" is used in the definition of appraising. Appraisers are trained to develop an "expert opinon" and we should regain the respect appraisers once had as the "experts" in determining the market value of real estate. The word "market" being the key word here. Our job is to find out what the property is worth to the open, free market. Not what it is worth to the closing of loans or the loan structures.
In order to regain our profession, we appraisers are going to have to join together 100%, in conjunction with a powerful entity, so that we can take back our integrity and take back our place as professional "experts" of real estate valuation.
Sincerely,
Ruth Potulin
I have been reading your posts with great interest and thought I would weigh in on this topic.
I have an appraiser friend who was taken off the approved appraiser list of Indy Mac's because she came in too high on her value of a high end home that was for sale. Why would she have intentionally come in too high unless the value was there, since she knew it would cause her trouble to be higher.
For my own curousity and to give my friend another opinion of her appraisal, I did a field review of the appraisal. Her value was right on the mark. It was very obvious what the value was and her comps were perfect. The sales price was just lower than the property was worth and, when I talked to the listing agent, it was obvious to me that this Realtor had no idea what the value of homes in that area were.
Since Indy Mac dropped her, she was having to turn down appraisal assignments from her regular clients when they were funding the loan through Indy Mac. I started doing her Indy Mac properties on a split fee basis so that she could continue to service her regular clients, and be able to get a percentage of the fee in the process.
What astonishes me is that instead of the lender or mortgage officers saying to themselves, "Well, the appraiser is the expert on market value and would know the value better than the listing agent, so the sales price must be too low." Instead, many of them immediately suspect the appraiser of wrong doing or incompetency.
I have been an appraiser for 10 years and many times during that period I've been told by appraisers I work for, "Never come in too much higher than the sales price or the appraisal will be thrown back at you or possibly loose the client. I have yet to understand what the problem is from the standpoint of the lender or the mortgage company when a value is higher than the sales price.
Regarding coming in at the contract price: I appraised a new construction vacant custom home and while I was at the subject property the buyer was there measuring for flooring. He was about 25 years old and he told me that his grandfather told him that all appraisers come in at the contract price, no matter what the value really is. He politely asked me to please appraise the property for what it was really worth, because he knew it was worth more than the sales price (which it was) and that he wanted to use the appraisal at the true higher value to reduce PMI and get funding for landscaping.
What bothered me the most about that conversation was that even an ordinary John Q. Public knew that many appraisers hit predetermined values instead of appraising the property for what it's really worth. It is my hope and, even my dream, that all appraisers will join together and all at the same time refuse to make values, refuse to be pressured and refuse to appraise another property for any value other than the true market value.
This website is so fantastic in allowing all appraisers to share thier information and learn from each other. I have posted a topic under the heading "Improving the Profession/Political Actions" called "We Appraisers Finally Have Our Own Union." Please stop by and read the posts under that topic when you have a chance to.
I truly want to be able to be free as an appraiser in order to appraise a parcel of real property by gathering all necessary information about the property and then utilizing that data to try to "zero in on" what the free market was trying to tell me. Appraising used to be an art and a science. That's why the word "opinion" is used in the definition of appraising. Appraisers are trained to develop an "expert opinon" and we should regain the respect appraisers once had as the "experts" in determining the market value of real estate. The word "market" being the key word here. Our job is to find out what the property is worth to the open, free market. Not what it is worth to the closing of loans or the loan structures.
In order to regain our profession, we appraisers are going to have to join together 100%, in conjunction with a powerful entity, so that we can take back our integrity and take back our place as professional "experts" of real estate valuation.
Sincerely,
Ruth Potulin