Must appraisal GLA be based on city records GLA?

[KD247]

... This is why the industry has no credibility because everyone thinks appraisers are hookers on street corner to be paid to please the client.

And those who aren't hookers spend all of their energy worrying that they might look like a hooker.

Couldn't resist the generalization. But, we have to remember that bias goes in both directions.

 

[mark hurlock]

And those who aren't hookers spend all of their energy worrying that they might look like a hooker.

Couldn't resist the generalization. But, we have to remember that bias goes in both directions.

I would argue those who are not hookers spend more time defending their unbiased opinions and less time worrying what it looks like.

Possibly evidenced by this thread. I wouldn't know because I'm not biased which is why I suggested a review.

 

[23Degrees]

To summarize, the appraisal had no effect on what the market thought the property was worth, did not "distort" the perceived value. I think the best test of value is determined by what price a group of people are willing to spend.
Gavin

Some would argue that it is not that cut and dry when those people are using other people's money in large part or entirety to place their bids and then need an appraiser's signature to make it happen. In that case an appraiser that despite SF planning indicating a specific requirement for permits in cases like this included the area as GLA along with some half sentence disclaimer somewhere in the report, compared it to properties without this issue, and then checked off "legal" and "as is" so the loan would slide on through. This is arguably highly misleading but it seems that appraiser is off the hook regardless.

I hope things go well for you on the next refi attempt but realize that the next appraiser is going to notice the discrepancy as well and might handle it exactly the same way as Mr. Tosh. It is far less likely now that an appraiser will show up and handle it the way the appraiser did four years ago. But you might get lucky.

Putting a value on bootleg construction in situations like this will inevitably lead to arguments in areas that are not rich in irrefutable data.

The real question of interest (and probably the only one that can be answered definitively) could end up being what would it cost you to get the area retro permitted. If building and safety comes in and finds that the entire lower level needs to be gutted and redone in order to comply with code then you might develop a different set of feelings toward the appraiser that made that loan happen for you at purchase time. I do hope that if this ends up being the ultimate solution for you it is more like a $100 (or less) permit filing fee that ends this headache for you.

Good Luck

 

[KD247]

I would argue those who are not hookers spend more time defending their unbiased opinions and less time worrying what it looks like.

Sorry, couldn't help but have a laugh at your statement regarding how "everyone" thinks. and Mike's implication that it professionally irresponsible to ever have the opinion of value at the purchase price. Both statements (in my opinion) show a high degree of bias.

Just as there used to be many appraisers who knew, before getting started, that the estimated value would be the same as the purchase price, there are just as many appraisers around today who know, before taking a look at any data, that their opinion of value is going to be slightly below the purchase price.

Not saying that either of you fell into, or fall into, either of these generalizations just because you have a certain way of forming an opinion of value. It'd be nice if you guys would extend the same respect to others.

 

[Mike Kennedy]

Mike's implication that it professionally irresponsible to ever have the opinion of value at the purchase price.

Musings in reply:
1. kindly post any assertion I have ever made that supports your erroneous conclusion above:icon_question: Don't bother using "search" - you will not find one.

2. if the 2008 appraisal opinion matched the 2008 contract price of $1,499,999. would you hold the same opinion? :icon_idea:

3. one has to wonder, on a million dollar property, exactly what feature warranted the $5,000.?

4. perhaps that appraiser proudly wears "I am that good" t-shirts? woohoo

 

[mark hurlock]

Sorry, couldn't help but have a laugh at your statement regarding how "everyone" thinks.

Answer me truthfully.

Have you ever had any member of the public tell you that they believe appraisers give independent and unbiased opinions and that they trust appraisers?

Be honest.

I have never heard such a comment so if you consider my comment to be biased based on my personal experience with the public, I guess you got me on that one.

By the way, why is so much effort being spent to attempt to legislate honesty and integrity in the appraisal industry? Is it because my comment was biased?

 

[KD247]

Musings in reply:...
3. one has to wonder, on a million dollar property, exactly what feature warranted the $5,000.?

4. perhaps that appraiser proudly wears "I am that good" t-shirts? woohoo

... The appraisal was then done, and showed a value of ... (wait for it) ... $1,005,000 - exactly the purchase price! Remember those days?"

The Leprechauns cannot imagine HOW that happened.......

That's what I was referring to, your implication that any appraisal coming in exactly at the purchase price could only be a result of coercion or bias. We've thoroughly examined that question in the past and we disagree on the issue of whether concluding exactly at the purchase price is a legitimate type of rounding or whether it implies undue precision.

Answer me truthfully.

Have you ever had any member of the public tell you that they believe appraisers give independent and unbiased opinions and that they trust appraisers?

Be honest. ...

Ok, I'll be honest. Yes, I have on occasion. And it's a problem with current sales when both the buyer and seller come to the unfounded realization that they were both off in their opinions of value and then agree to adjust the sales price to the appraiser's "calculation of actual value".

There are too many different types of people who become appraisers, and too many different types of people relying on appraisers, to support any kind of gross generalization that can be then be applied to individuals. Approaching any type of analysis with a chip on your shoulder is a form of bias.

 

[Terrel L. Shields]

wouldn't know because I'm not biased which is why I suggested a review.

The bias of no bias is a bias....we are all biased whether we see it or not.

We rely upon the heuristic of appraising - judgment, skill, experience, intuition, rule of thumb, common sense, whatever you want to call it. That is the basis of our whole career. If we did not need a bias, then a computer could do this job better than we could...and 4000x faster. We are selling our bias - and failing to realize and exploit our own biases makes for an inept appraiser. Bias should not be mistaken for either poor judgment nor deliberate fraud, and visa versa.

 

[mark hurlock]

The bias of no bias is a bias....we are all biased whether we see it or not.

We rely upon the heuristic of appraising - judgment, skill, experience, intuition, rule of thumb, common sense, whatever you want to call it. That is the basis of our whole career. If we did not need a bias, then a computer could do this job better than we could...and 4000x faster. We are selling our bias - and failing to realize and exploit our own biases makes for an inept appraiser. Bias should not be mistaken for either poor judgment nor deliberate fraud, and visa versa.

We are NOT talking philosophy here. Unbiased in the context of my comment was to recommend an independent third party opinion. How can you possibly consider that biased? Would you suggest we ask another engineer his opinion of an appraisal?

You need to look up the definition.

 

[KD247]

The bias of no bias is a bias.....

That's getting pretty esoteric and probably will make more sense after a beer.

The problem I have with some appraisers is that they don't strive to be good scientists. A good scientist is willing to change their mind when confronted with new and better data, looks forward to the perspective of others, and is never embarrassed to admit that they now see things differently than they used to. And good scientists don't abandon scientific or logical principles when faced with the frustration of conflicting evidence.

I have trouble thinking of any other profession where skilled analysts get so defensive when presented with alternative solutions to a problem they are working on.