Realtor Ethics

[Eli]

Maybe you live in an area where out of area appraisers never do appraisals. i live in real ville where it does happen. It has become so widespread that the state Realtor Association is looking into it.

I like the sound of that, although not hitting one of the roots of the problem (appraiser selection criteria), it may trim some thorns. I guess another big root is undue realtor pressure, however I am not naive enough to believe there are not people who don't even own a license doing most of the work(as much as 99.9% in some cases) on incompetent appraisals and it is not being disclosed as such most likely.

 

[Terrel L. Shields]

most lenders and AMC's have restrictions about assigning orders to appraisers from over X miles away

They have to ask where someone is from before they complain. I have had few Realtors ask my location. As for the clients...I routinely am asked to bid on jobs 30 to 60 miles away by banks. And in my specialty I travel 2 states. I know a poultry farm appraiser who has licenses from Delaware to Texas and most states in-between.

 

[J Grant]

the 30 mile seems about residential, not commercial as far as I know...and makes no sense for certain res areas of course .

 

[Don Clark]

I like the sound of that, although not hitting one of the roots of the problem (appraiser selection criteria), it may trim some thorns. I guess another big root is undue realtor pressure, however I am not naive enough to believe there are not people who don't even own a license doing most of the work(as much as 99.9% in some cases) on incompetent appraisals and it is not being disclosed as such most likely.

You are correct. The state of Virginia shut down such an operation a few years ago. The appraiser was acting as an AMC and had trainees all over the state doing appraisals and he signed off as supervisor. Problem was, he could not have been in 2-3 places at the same time. Had over 20 charges against him. he lost his appraisal certification.

 

[Terrel L. Shields]

One of the best instructors I ever had - took some 5 courses from him including the pre-test prep, Marshal & Swift, narrative writing, and a great 12C course - was, by all counts, an incompetent appraiser himself. He taught for NAMA for a while then set up his own school. He would take on trainees who attended his class and supervision was minimal. Reviewing even less so, apparently delegated to another trainee or his secretary. I think it was the lure of money as he had a huge residential appraisal business. At some point, so many of his trainee's reports ended up before the state board they were going to sanction him. He resigned his license. He had 2 separate state licenses and a second home in that state, so he moved back and set up shop there.

He asked another appraiser - now in his 80s - to help him generate some work. This Tulsa appraiser was a former president of NAIFA many years before, a dedicated life-long appraiser as is his son. He personally told me that " J. D. couldn't appraise his way out of a paper bag.." or some such language to that effect. He tried to help him but quickly severed the relationship. His judgment was simply not good. It is hard to understand when you took classes from what appeared to be a class act - absolutely the best instructor on the 12 C I've ever seen -

Another case was another NAIFIA past president and instructor that a CG trainee of mine worked with for a while. He said despite the old guy calling himself an appraiser, he was confident that this "pro" had not completed a URAR in 10 years or longer. He simply signed off on what others did, usually with little oversight. He, too, took on students as trainees to get their hours. Often the state was calling on him to review the applications of his own students....duh.

 

[Non Sequitur]

Realtor ethics and Bigfoot are one and the same; Many sightings, a lot of made up evidence, but in the end still nothing more than a fairy tail.

 

[J Grant]

The scrutiny and limits on # of trainees for appraisers is greater now than in the past, however the client ordering of fast/cheap is problematic. RE agents efforts at interference have had zero impact on that, it has resulted in certain clients imposing a 30 mile limit for appraisal ordering.

I certainly don't see RE agents as solving the problem, any positive impact their interference with appraisal matters will have a far greater negative impact. The stress and time wasting they wreak with their threats of filing complaints and sending poor data ROV is the final straw that has even more good appraisers exiting the field. RE agent/REALTOR forays into appraiser matters to date has been a disaster from the housing collapse followed when they controlled selection via mtge broker with rubber stamping of prices rampant, to their grabbing valuation business by doing BPO's for lenders on the REO and short sales that followed the collapse, to their winning the right to an ROV that is adding unpaid hours to appraisers obligations, to their covert arrangements with lenders for lists of go to number hitters to their bully tactics of refusing entry to appraisers to their media articles about how appraisers are slowing down the market by low balling, etc.

One only has to look at most MLS listings to see the ineptitude of agents regarding property. They list a condo as a townhouse if it has a townhouse design. They list above ground pool as it is is an in-ground pool. They call a corner of balcony sliver of view as a full ocean view. They add garages to living area sf. Same with guest houses. No negative feature of a property is ever mentioned, unless the property is a wreck and then it's called a fixer upper. Their comp choices on an ROV are a joke. Many of the listings are priced so badly they sit on MLS a year or more before finally reduced to a realistic price, or go into expired or cancelled. They add lot size to living area and divide that for a price per $sf of the dwelling. RE agents show such gross ineptitude regarding facts about properties it's incredulous to believe they are capable of determining appraiser competence ( besides the issue that it is outside their licence level, role as vested party and a lender allowing them to do has violated regulations)

I could see the lawsuits and restraint of trade complaints flying if appraisers took it upon themselves to vet RE agents for competence and blocking their efforts to list or sell property if we deem them incompetent or living too far from a listing .

 

[Ken B]

Back when, I knew a top-producing agent who always entered her split-foyer listings as two-story designs in the MLS. Every now and then, someone would complain and she would get a minor fine.

She said she sold more split-foyers by listing them as two-stories and considered the occasional fine as a cost of business.

That said, I'm thinking a $10,000 to $20,000 fine per instance of violating the TILA appraiser independence requirements might catch an agent's attention more than a $50 slap on the wrist...if you want to elevate a $50 fine to the "slap on the wrist" level. I'm not sure it even qualifies as a "stern look."

 

[J Grant]

I do understand RE agents manipulation of facts on their listings on MLS as appropriate for their purpose...to "sell" other agents on showing the property to buyers. It does show their mindset, however.

I just appraised an attached condo villa that unfortunately the MVO was below SC price . It was well maintained but had no real upgrades and every single other villa sale in same subdivision that sold at the CS price range had substantial upgrades. The listing agent and selling agent were there, and as I walked around taking photos and notes, they were literally "selling" each other the property...talking about what a nice patio it had, how clean it was, and the winner...it was on the nicest block in the community. I drove around taking comp photos...every block was virtually identical in the PUD community.

 

[J Grant]

A classic...I did a condo that backed up to a golf course. Agent was "selling " me the property, talking about how the view was the best one. I had done numerous condos in the building and they all backed up to same golf course with similar views. But I dont point out stuff like that at inspection. When she said it had the best view, I smiled and said, "yes, it has a lovely view" At which she got huffy and declared, "This unit has a MILLION DOLLAR view"....on a 100k price range unit.