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Must This Be Disclosed?

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Lee SW IL

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Licensed Appraiser is also a REALTOR, with ABC Realty.
Listing and Selling Agent are also with ABC Realty? Must this be disclosed???? I know it should. What do you think would happen if the appraiser did not appraise the house for the contract price?

My bro in law is buying a house in a small town of 2500. His
appraisal was completed last week, guess what it was a $1,000 more than
his contract price. :unsure:

No where in the report does it state that the appraiser is also a REALTOR and
is with the same agency as the listing and selling agent.

My bro in law doesn't see the problem, he said everybody's happy. I said, for now! ;)

Other problems with the report were no explantions of comps to other towns, which are 10,000 in population and 10 miles, another comp 6 miles with a town of 6000, and effective age adjustments across the board. Not explained. (I'm not saying the comps are bad, but not explained, I haven't researched any other possible available comps. yet. Only three comps were used.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
If a complaint about this appraisal were made in California, the issue of failure to disclose the relationship would very much be grounds for discipline. I know, because someone I know had his license in limbo for almost 2 years over a related, but lesser allegation. Last I heard, the state board settled for a combination of some hefty fines, education and review.

I would even venture the opinion that a realtor who lists property in a small town of less than 50,000 people shouldn't be doing appraisals in that market. Even if the appraisal doesn't involve brokers from his/her office. There's no way they can assert that they have no interest in the transaction because their own listings can be affected, either now or in the future, by a sales transaction that occurs in their market area. Now if that broker deals only in SFR listings but appraises only non-residential properties (or vice-versa), that's a stronger position for them to argue. I still think they would be compelled to disclose this in any appraisal report.


George Hatch
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
That appraiser should not have touched that one.

I would think that the relationship must be disclosed to all parties.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
George,

PERFECT explanation of why any active real estate broker or agent should NOT be doing appraisals!!!

Thank you!

(BTW, Dee Dee and I have decided that if you looked and talked like Sam Elliott, you'd be the all time 'Perfect' man! LOL)
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I was doing a sale, realtor was griping because the appraiser in his office wasn't doing the appraisal. Well, DUH. Problem was, they were force-feeding this guy work by pushing him to the local mortgage companies in order to get their sales business.

Yes, there's a definite problem. If I can ever find out the guy's name, I'm reporting him.

Roger
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Wait a minuet Pam! My brokers license is active, but the only selling I do is to myself at Freddie/Fannie auctions. :mrgreen:

Jes' kiddin', I know what you mean. Yes, one must be very careful to not cross the line when actively selling and appraising in the same town. I seriouly doubt that the average sales agent/appraiser knows (or cares to know) where that line is.

As for me and my house, I do not chase after listings, I do not chase after buyers, just don't like it...... can't take enough baths after getting that sales person feeling. :D
 
W

walt kirk

Guest
Many years ago, before USPAP reared it's ugly head, A client of mine submitted an appraisal of his property which was prepared by the appraisal division of a large Philadelphia commercial real estate brokerage. The property was being condemed by the port authority and the condemnation commissioners ruled that since the brokerage had once listed the subject property for sale the possibility of a conflict of interest existed.

That was then, this is now. The very appearance of conflict should always be avoided.
 

Lee SW IL

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I thoought that I wasn't that crazy. I at times maybe to over cautious, but I'm glad I'm not the only one that thinks this is unethical.

I too have a REALTORS license, however, I have never sold or listed a house.
 
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