Owner/Borrower/Listing Agent requesting desired valuation and AIR

[itmustbeme77]

Ok, the situation just happened yesterday. I met the Owner/Borrower/Listing Agent at the property for an appraisal inspection. It is currently vacant and the Owner/Borrower/Listing Agent is doing an investment property refinance and stated that they would be taking it off the market and not selling the property. The Owner/Borrower/Listing Agent stated that they would like me to come in at $430,000 for the appraisal, I told them they should not be saying that to me. I do not come into a requested value, I perform an impartial valuation based on market data, not the Owner/Borrower/Listing Agent requested value. The Owner/Borrower/Listing Agent then went on to explain to me why they wanted it valued at $430,000. Smh.

From my reading of Fannie Mae AIR:

"No employee, director, officer, or agent of the Seller, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the Seller, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner including but not limited to:"

and

"Requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an appraiser provide estimated values or comparable sales at any time prior to the appraiser’s completion of an appraisal report;"

While the Owner/Borrower/Listing Agent requested that the Appraiser provide a desired valuation, the Owner/Borrower/Listing Agent is not an employee, director, officer, or agent of the Seller, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the Seller. The Seller being the lender who is selling the loan to Fannie Mae, by my understanding of AIR.

1st question: Can somebody please confirm that I am looking at this correctly and that AIR has not been violated?

2nd question: How does putting the following statement into the report sound? "The Owner/Borrower/Listing Agent requested that the Appraiser come into a valuation of $430,000, the Appraiser did not consider this request when arriving at the market value determination for the subject property."

Thank you all in advance.

 

[KHS445]

How far apart are your opinion of value and the borrower’s requested value?

If you are an appraiser you have two choices; grow a pair and let the chips fall where they may or decline the assignment based on undue influence/pressure received from the borrower.

If you chose the first option you need to make sure you have a strongly supported opinion of value and a well written report as it will most likely be questioned and if someone is upset enough it may get turned into the State Board. With the second option you can move on to your next assignment and not look back.

If you decide to complete the assignment, since the borrower is involved in the real estate business, I would request they provide you with documentation regarding recent sales of properties they believe are comparable. They may provide you comparable sales you are unaware of, if the comparables are not reasonable it will give you documentation that the borrower had unreasonable expectations in the event your report is questioned.

 

[J Grant]

The borrower is not bound by any code or standard and can apply pressure.

It is up to the appraiser to resist that pressure, If you feel that you can do the appraisal with an unbiased opinion then ignore what the owner said and finish the appraisal. If you feel that you are too affected by it and can not now do an impartial job then give it back.
I look at AIR as being violated by a RE professional or from the lender. But again, it is THEIR problem if THEY are in violation

It is your problem as an appraiser only if it affected your judgment or you go to the dark side and number hit to please them.

 

[J Grant]

Ok, the situation just happened yesterday. I met the Owner/Borrower/Listing Agent at the property for an appraisal inspection. It is currently vacant and the Owner/Borrower/Listing Agent is doing an investment property refinance and stated that they would be taking it off the market and not selling the property. The Owner/Borrower/Listing Agent stated that they would like me to come in at $430,000 for the appraisal, I told them they should not be saying that to me. I do not come into a requested value, I perform an impartial valuation based on market data, not the Owner/Borrower/Listing Agent requested value. The Owner/Borrower/Listing Agent then went on to explain to me why they wanted it valued at $430,000. Smh.

From my reading of Fannie Mae AIR:

"No employee, director, officer, or agent of the Seller, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the Seller, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner including but not limited to:"

and

"Requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an appraiser provide estimated values or comparable sales at any time prior to the appraiser’s completion of an appraisal report;"

While the Owner/Borrower/Listing Agent requested that the Appraiser provide a desired valuation, the Owner/Borrower/Listing Agent is not an employee, director, officer, or agent of the Seller, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the Seller. The Seller being the lender who is selling the loan to Fannie Mae, by my understanding of AIR.

1st question: Can somebody please confirm that I am looking at this correctly and that AIR has not been violated?

2nd question: How does putting the following statement into the report sound? "The Owner/Borrower/Listing Agent requested that the Appraiser come into a valuation of $430,000, the Appraiser did not consider this request when arriving at the market value determination for the subject property."

Thank you all in advance.

Imo, AIR has not been violated since the owner is not a party or agent of the seller - who is the seller when there is no sale? Regardless of my opinion on that , I would not write that statement about the owner/borrower requesting you value it at $430,000 in the apprasial. The lender would probably not be able to use the appraisal if you write that or the owner could sue you and deny saying it.

Either you can do the appraisal unbiased or you can not. I've had people pressure me and I never wrote they did in the appraisal, I just ignored them and appraised the property. There were several times though when the encounter was so aggressive or manipulative that I gave the assignment back after the inspection at no charge and told the client why.

 

[Zoe]

NAR would not like that. The State real estate commissioner would not like it on the agent.

 

[Zoe]

If the agent said we would probably ask $X if we were going to put it back on the market and here is some information we would like you to consider. That is fine.

No way you can go in with a predetermined value by pressure from anybody, certainly not a real estate agent/owner.

 

[Zoe]

I would plow on. Get all the info the agent can give you. Forget the statement on the agent/owner. Your only other recourse options are to report them to like state agency or NAR or another regulatory body. I would be careful on the appraisal and make notes of all that has occurred in your workfile.

I have a feeling if you put that statement in the report, it is going to throw big red flags on your independence and probably get owner/agent in trouble.

 

[Zoe]

Which brings me to another point. New thread.

 

[Zoe]

"The Owner/Borrower/Listing Agent then went on to explain to me why they wanted it valued at $430,000. Smh."

Can you expand on how they explained? I don't really see this being a big deal. What did they explain?

Did they say we have to get $430,000 to get the loan or here is some information that we think supports this value.

Did they say I am going to kill you if you don't come in at $430,000?

You always have see yourself as a professional appraiser as being an independent party and that benefits the owner/agent and the bank if a bank is involved.

You can be biased in certain situations like on consulting assignments. Your definition of value is huge in the equation. You don't need value in many consulting assignments.

 

[J Grant]

If the agent said we would probably ask $X if we were going to put it back on the market and here is some information we would like you to consider. That is fine.

No way you can go in with a predetermined value by pressure from anybody, certainly not a real estate agent/owner.

I don't agree. If that were the case, appraisers would have turn back multiple orders.

I;ve had people tell me over the years they need X $ or it "should appraiser out for X$, no problem " and similar statements. I inform each and every one of them that I will be doing an independent valuation and do not appraise to a pre determined number. Most of them shut up after that, if they make another repeat statement, then I simply repeat my statement and then they shut up. I stay calm and polite and nonargumentative. I'll often walk away to take a photo to give them the message this conversation is over.

I have never had a problem ignoring what they said and doing my appraisal with my independent opinion.

The few times these encounters were overly aggressive or manipulative and I felt comprised were the times when I did return an order to the client because of it.