Question about appraisers responsibility to include comments on conditions they observe

[Elliott]

I got three appraisals. The first one I did not tell the man anything at all except that it was for a divorce. I expected him to see all the issues and adjust the price accordingly. It was done in May 2020, so before values rose to the level they are now. I did not show him the $18,800 estimate for clean up or point out any drainage issues or walk the property with him to make sure he saw all the "pits and piles." After that I read up on appraisals, talked to a realtor friend and hired another guy. I gave him the clean up estimate and made sure he saw all the issues. The third one I was tricked into having done by my attorney who was, apparently, working for my husband. I just did not know it at the time. I also made sure that appraisers saw all the issues. I even gave her a list (she told me it was ok to provide that to her) of 84 things that needed to be repaired/cleaned up, the $18,800 clean-up estimate and a photo of drainage problem after rain and google overhead showing location of every hole, rut, trench and pile on property.

We paid $340,000 in Jan 2017. 1st appraisal $509,000 in May 2020; 2nd appraisal $386,000 in Jun; 3rd appraisal $525,000 in Sep. The 1st and 3rd said absolutely nothing about condition and comps were all better properties, even if ours had been in the same condition. The 2nd appraisal said the value was because of the "as is" condition.

I paid half for the 3rd appraisal because my husband's attorney wanted it and my attorney told me to do it. After that no one would involved in divorce would even act like the 2nd appraisal existed. So I had to pay him much more. The junk is gone now, but I have not fixed the pits and piles yet. I'm doing it a little at a time with the tractor I got in divorce. They knew they overvalued. They gave me 75 days to refinance or I had to sell it, but I got to keep the money. He would not sign the quitclaim deed and tried to run out clock on 75 days. I got it done in the end though.

The reason for my question is that I have filed a complaint with the state bar assn against my attorney. (The appraisal was just one minor issue, there were many more). I am thinking of filing a complaint against the 3rd appraiser. She called the pits that did not hold water, were dangerous and had to be filled back in "preliminary pond diggings" on her appraisal like they were a good thing and then failed to mention any of the other 84 things on the list that she had seen for herself in her appraisal. My husband's attorney replied back to her in the email she sent with the values,"Thank you, Xxxname!" with an exclamation mark.

TK,
Wow! Your attorney should have been in control of ordering appraisals. And all the negative aspects of the property should have been given the appraisers and addressed. I assume you got stuck with the two high appraisals which isn't how the dissolution process should work. Your attorney does need to have a complaint made against him.

 

[Tiffany Gibbons]

TK,
Wow! Your attorney should have been in control of ordering appraisals. And all the negative aspects of the property should have been given the appraisers and addressed. I assume you got stuck with the two high appraisals which isn't how the dissolution process should work. Your attorney does need to have a complaint made against him.

If your attorney was actually working for your husband and you have evidence of this, the attorney should be disbarred. My Mom and I went through a similar issue (in Mississippi) between her attorney and the other attorney being "friendly" with opposing side. This involved Probate, a life estate, and a Medicaid dispute. The opposing party had an offer to buy the property from the neighbor all along and we were stumbling around from another state, while trying to work. We had to pay for timber cruises, multiple appraisals, etc. just because the attorneys were making back alley deals. We paid for an appraisal. The other party paid nothing. I lost all the money I paid for appraisals when it could have been settled quickly if we had been informed of the offer. Small town issues. That attorney would mail checks to the wrong person, etc. I have never seen the appraisal I paid for to this day and it has been 10 years. There was only 1 other CG appraiser in this county, the Attorney's Mother, if you can believe it. Greed knows no bounds, especially where most attorneys are concerned. There must be some honest ones, just haven't experienced one in person, myself.

 

[Deleted member 142783]

So am I reading that the appraiser did not appraise it "AS IS"? If not, send the report to the state board. I never cease to be amazed at appraisers who treat a non-lender assignment like it is a lender assignment and make the value "subject to"....

If this was done for the divorce, it needs to be different than if made for a bank. So unless the report is listing "mortgage lending" as the purpose of the report, it should be strictly " as is" and at a minimum adjust for the cost to cure (clean up the junk.)

Ummmm what? Can a client not request a report subject to certain conditions? I need further clarification here. I am interested in learning more

 

[Terrel L. Shields]

Ummmm what? Can a client not request a report subject to certain conditions? I need further clarification here. I am interested in learning more

Not for legal purposes. The as is value is an absolute requirement. Try it sometime with the IRS.

 

[Deleted member 142783]

Not for legal purposes. The as is value is an absolute requirement. Try it sometime with the IRS.

Irs makes complete sense to me, but for a divorce? What if the client says they are fixing x when x could have a major impact on value (finishing a pool, finishing a remodel, or filling in pits in the rear yard etc). This is forbidden ?

 

[Terrel L. Shields]

This is forbidden ?

Absolutely - the courts want to know what the value is as of a certain day. And if you haven't fixed "X" already, then X is not included. Things are frozen in time. A lawyer would rip your guts out on the stand if you inflated the value with repairs that were sometime in the future. Absolutely rip your guts out - in fact, might even evoke the Daubert Rule and have your testimony excluded...which would expose you to a lawsuit from your client.

 

[teakay77]

Almost certainly a flawed appraisal - and if no mortgage involved, it is wrong. May I assume that it was done on a form labeled as follows which makes it double wrong. Note that top line. This has nothing to do with lending. Again, send it to the state. I know others say no but the only way to weed out incompetence is to punish it.
View attachment 73197

Yes, the 1st and 3rd appraisers used this. The 2nd appraiser used a form called Residential Appraisal Report but had a USPAP Compliance Addendum and said N/A where it says borrower and N/A where it says Lender/Client.

 

[teakay77]

In post #10 you indicated that you were able to refinance the property within 75 days. What value was shown on the Bank’s appraisal? Did you provide that appraiser with the same information as you did the others?

Frankly without seeing the subject property, having an understanding of your local market and reviewing each of the appraisals in full it is next to impossible to give you any sound advise.

I would recommend that you find a local appraiser you are comfortable with and asking if they would take a little time to look over each of the appraisals to see if you have a good argument for any action. I know some on this forum will scream that any appraiser that looks over these reports and sits down and talks with you is performing a review appraisal. I would disagree and deal with it more as an educational process for you. I feel part of my role as an appraiser is to educate people on the appraisal process and in this case I would probably dedicate up to half a day at no charge. I would not be providing an opinion of value, just an overview of the reports and what they say about your property. Now if you wanted the reports reviewed and my opinion regarding the quality of the reports, I would definitely charge for that work.

The bank did not do an appraisal. I refinanced $304,000. The payoff was $249,000. I had to get more to pay the taxes on the money my husband took from my IRA without my knowledge. So I told the bank it had just been appraised. We had only paid $340,000 for this place.

I do not know anyone who does appraisals and at this point I trust absolutely no one. The fact that the 3rd appraiser labeled the 9 foot deep jagged pits as "preliminary pond diggings" seems to me to be extremely biased. I showed her the pits and she asked what they were supposed to be. I said I don't know, but they are dangerous. My husband walked up behind us and said "broken dreams, it was supposed to be a pond." I told her then that they do not hold water.

 

[teakay77]

TK,
Wow! Your attorney should have been in control of ordering appraisals. And all the negative aspects of the property should have been given the appraisers and addressed. I assume you got stuck with the two high appraisals which isn't how the dissolution process should work. Your attorney does need to have a complaint made against him.

I have filed a complaint against my attorney and the appraisal was only a very small part of it. Yes they would not even average the low and high appraisals.

 

[Terrel L. Shields]

I preach the use of narratives and when I see the obvious poor form filling skills of the current crop of appraisers, it's no wonder the banks want shed of us. We talk about a good game of "public trust" but looks to me like all 3 appraisals should go to the state...ALL OF THEM. If you are using an explicit lender form for a divorce assignment you need your *** handed to you by the state board.

I knew an appraiser who did this kind of work and got away with it over 20 years. She was hired by the husband. The wife hired an older appraiser who even taught classes at one time. He took an assistant. Afterwards the wife filed against all 3. The one I knew well had to surrender her license and owes the state $2200 still. The older guy had the temerity to die before his hearing and his assistant got reprimanded and fined...as well as sent back for more education.

The fine points of USPAP compliance is blown out of the water by grossly abusing the forms and certainly there are far better forms to use than the lender forms that secondary market and only secondary market requires. My BANK clients do not use those forms as a matter of course because they are not selling the paper into secondary market. They prefer something they can read and that isn't UAD codes and abbreviations. Appraisers, learn to write for God's sake.