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To turn in the appraiser or to not turn in the appraiser?

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kim grant

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Junior Member
Joined
Nov 21, 2002
Professional Status
Certified Residential Appraiser
State
California
First, to ally anyone's curiousity -- I have been appraising for 25+ yrs, reviewing for 15+.

When do you all think a review appraiser should file a compliant on an appraiser who's work is under their review and proven otherwise shoddy, substandard or fraudulent?

I personally go through phases where I think to myself "not my job" then swing over to "my duty to my profession" I won't sit here and tell you all that I have never turned in an appraiser -- I have, many times in fact, but generally speaking I close the file jacket, file it in the cabinet after report delivery and forget about it. I could tell you I tons of war stories, but let's face it -- we all have them and maybe that is exactly the problem.

Personally, I do not think an appraiser with less than 10 years experience should be completing comprehensive review work. I know many of you will disagree with me but until your standing with over 20 years experience, you really can't say anything that would change my mind about that. It's not an ego thing, it's that I compare my skills now to my skills 10-15 years ago and I know there is a world of difference in both skill and maturity as an appraiser. It's a shame the clients don't see it that way.

But back to my point, I cannot tell you how many times I have had to defend my review of an appraisal against another reviewer's opinion of the report, the original appraiser being completely out of the picture. Yes folks, lenders do get more than one review on a single report in many forms and most are not concerned with the quality of the report in question as much as the validity of the bottom line. This makes me wonder if the reason I consistently and persistently see really crappy appraisals is because nobody is turning these really crappy appraisers into their state boards. I have come to believe that lender's don't care how bad the quality of the work is, they have built the review or several review fees into the cost of doing business and call it a day. And I'm not talking about fraud per sey, I'm referring to a breed of appraisers that are truly just incompetent, that really don't get it, have no analytical skills and the principle of substitution is way beyond them -- they need some training. I don't think it's intentional on their part but rather a product of substandard training and/or lack of enforcement from state boards because sad to say, I see a fair amount of this from appraiser's with many years behind them in the business as much as the appraisers with less than 5 years.

What does that say of us? Is our profession corrupted by a lack of enforcement and/or concern on the part of the users?

There are, of course, varying degrees of crappy when reviewing an appraisal report but after years of looking at hundreds of reports and styles and analysis methods and cost estimation methods and industry trends --an experienced reviewer can usually get inside what the original appraiser was thinking/doing with their subject. I have not filed any complaints in the last 2 years but the last 3 reviews I conducted have pushed me over the line to losing some sleep over them. My thoughts on these are:

1. "ok, this person has no fricking clue what he/she is doing, this assignment is way, way out of his/her league and ah ha... an AL in the 30,000's number in CA licensing system on a 2 million+ property in a declining market using sales from 2006 with only 1% in negative time adjustment --- what can I expect from his/her level of experience? I'm thinking that turning this one in could be a real learning experience for the appraiser.

2. "hum, an appraiser with a low license number but only AL, I recognize the name --this appraiser is in my market area and using trustee deed foreclosure transfers as market sales in an REO purchase appraisal that is so sloppy I am tempted to pick the phone and call him/her to say "what the h-ll? Turning this one in would be elimination of some minor competition -- I have seen this appraiser's work many times and would be surprised if my complaint were the first-- my complaint could do him/her in.

3. And most disturbing: I review an appraisal completed by a peer, and I say a peer because the license number and level plus designation are indicative of many years experience, this report is completed on a property that I completed a report on less than 1 month before the appraisal in question. The subject gained $150k in market value (in a relatively stable, leaning to soft market) between my appraisal and the appraisal I was sent for review. Get this-- both appraisals were completed for purchase transaction -- different sellers on each transacation. The sale transaction I appraised the month before closed escrow the day before the new appraisal and of course, nothing about that transaction is mentioned in the new report. What were the odds of the funding lender being the same on both transactions? I tried to wiggle out of the review assignment to no avail --they were looking for a value cut and comprehensive reivew from me so they could get on with business. They could care less the quality, just basic bottom line here.

This is the one that is making me re-think my policy of "not my job" to turn in these appraisals. What do you think? I'd like a consensus. Please state your years of experience in any reply, public or private, I really want to hear from some seasoned appraisers but welcome newbies and less experienced opinions also.

Thanks in advance,

Kim
:)
 

Tom Woolford

Elite Member
Gold Supporting Member
Joined
Nov 20, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Kim,

I did not complete reviews for many years, but have increased my review assignments in the last 2 years because it IS our responsibility. In my 20+ years I have seen all range of appraisers from bad to excellent, and all of them, including me, have made mistakes. But there is a BIG difference between making a mistake and fudging the numbers. On a review with minor mistakes I suggest the appraiser rework the report and make the corrections as there usually is no change in value as the methodology and data were sound. But for the number hitter, I blast with both barrels. Part of being a peer, in my opinion, is recognizing the difference between being human, and being an (expletive deleted).

If you are convinced, and have the data to prove it, that the report under review is seriously flawed to the point of incompetence, NAIL THE SUCKER.

JMHO.
 

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
Personally, I do not think an appraiser with less than 10 years experience should be completing comprehensive review work. I know many of you will disagree with me but until your standing with over 20 years experience, you really can't say anything that would change my mind about that. It's not an ego thing, it's that I compare my skills now to my skills 10-15 years ago and I know there is a world of difference in both skill and maturity as an appraiser. It's a shame the clients don't see it that way.

With all that experience and maturity you have in review work, you still have to ask if you should turn in an appraiser for "shoddy, substandard or fraudulent appraisals? Looks to me that lack you still the maturity to do the right thing.:unsure:

I'd like a consensus.

A consensus from a bunch of appraisers?:rof:
 
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kim grant

Thread Starter
Junior Member
Joined
Nov 21, 2002
Professional Status
Certified Residential Appraiser
State
California
With all that experience and maturity you have in review work, you still have to ask if you should turn in an appraiser for "shoddy, substandard or fraudulent appraisals? Looks to me that lack you still the maturity to do the right thing.:unsure:



A consensus from a bunch of appraisers?:rof:

In all honesty Ron, you are the epitome of why I don't participate in the this forum to it's fullest extent. Where is your professionalism? Is critizing or demeaning the poster in a forum the best you can do as an appraiser/person? Seriously, I would like to know why you waste your time with this type of comment? If you have nothing of substance to add I suggest you add nothing.
 

icisic7

Senior Member
Joined
Jul 10, 2005
Professional Status
Licensed Appraiser
State
California
The USPAP Preamble states "The appraiser's responsibility is to protect the overall public trust..."

Personally, I think it is an obligation on the reviewer's part to report such transgressions to the state regulatory agency (in this case OREA).

FTR, I've been in the business about 3 1/2 years, just upgraded to AL. My mentor recently sent me an appraisal she was reviewing. She wanted me to see what I could find wrong (if anything), saying it would be a good learning experience for me. Frankly, I was horrified by what I saw. I won't use the word "fraud" - that is for someone else to determine. But the degree of incompetence was truly frightening. There was a huge laundry list of inaccuracies (these are just a few):

  1. The house is undergoing renovations (flooring, counters torn out), with no mention of it in the report.
  2. One comp was by an award-winning designer with very high-end features (Viking, Sub-Zero, etc.). All comps clearly superior, with no explanation or adjustment.
  3. Two of the comp photos don't match any of the previous listings for the comps used.
  4. "None noted" for all 6 comp sales concessions.Comp sales from almost a year ago with no time adjustment.
  5. Subject lot 6,300 s.f. - comps with up to 16,800 s.f. and no adjustment.
  6. Subject has bay/city lights view - 3 comps with no view and no adjustment.
  7. Cost Approach has $325/s.f., citing Building-cost.net as the source. I plugged in the numbers at b-c.net, using the highest ratings possible, and came up with $102.62/s.f.
  8. No description of the subject property, no explanation of how the conclusions on market data were derived (Stable, In Balance, 3-6 mths checked).
  9. No Scope of Work, no 2006 USPAP compliance addendum.
  10. Appraiser located 500 miles away from subject.
  11. Appraiser is an AL, property valued at well over $1M.
And that was just a small sample of what I, as a newbie, noticed. :(
 

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
What's scary Timothy is that you are general certified appraiser with this knowledge and rather than turn it into the State boards as you should be you are blasting and probably forewarning this appraiser in the forums --- file a complaint -- quit complaining about it.
:fiddle:

http://appraisersforum.com/showthread.php?p=1366870#post1366870

Remember your answer from a couple of months ago to another appraiser on filing a complaint on appraiser. Why don't you take your own advice and quit complaining about it?

In all honesty Ron, you are the epitome of why I don't participate in the this forum to it's fullest extent. Where is your professionalism? Is critizing or demeaning the poster in a forum the best you can do as an appraiser/person? Seriously, I would like to know why you waste your time with this type of comment? If you have nothing of substance to add I suggest you add nothing.

A little sensistive are we?

Never mind that you just cut down every appraiser because they have less experience or maturity then you! Maybe you can learn something from them. That comment is real profesional on your part.:Emoticon_hug:

After all your years of review work how many appraiser have you turned in for "shoddy, substandard or fraudulent" appraisals? Why don't you just do the ethical thing and turn them in?
 
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kim grant

Thread Starter
Junior Member
Joined
Nov 21, 2002
Professional Status
Certified Residential Appraiser
State
California
The USPAP Preamble states "The appraiser's responsibility is to protect the overall public trust..."

Personally, I think it is an obligation on the reviewer's part to report such transgressions to the state regulatory agency (in this case OREA).

FTR, I've been in the business about 3 1/2 years, just upgraded to AL. My mentor recently sent me an appraisal she was reviewing. She wanted me to see what I could find wrong (if anything), saying it would be a good learning experience for me. Frankly, I was horrified by what I saw. I won't use the word "fraud" - that is for someone else to determine. But the degree of incompetence was truly frightening. There was a huge laundry list of inaccuracies (these are just a few):
  1. The house is undergoing renovations (flooring, counters torn out), with no mention of it in the report.
  2. One comp was by an award-winning designer with very high-end features (Viking, Sub-Zero, etc.). All comps clearly superior, with no explanation or adjustment.
  3. Two of the comp photos don't match any of the previous listings for the comps used.
  4. "None noted" for all 6 comp sales concessions.Comp sales from almost a year ago with no time adjustment.
  5. Subject lot 6,300 s.f. - comps with up to 16,800 s.f. and no adjustment.
  6. Subject has bay/city lights view - 3 comps with no view and no adjustment.
  7. Cost Approach has $325/s.f., citing Building-cost.net as the source. I plugged in the numbers at b-c.net, using the highest ratings possible, and came up with $102.62/s.f.
  8. No description of the subject property, no explanation of how the conclusions on market data were derived (Stable, In Balance, 3-6 mths checked).
  9. No Scope of Work, no 2006 USPAP compliance addendum.
  10. Appraiser located 500 miles away from subject.
  11. Appraiser is an AL, property valued at well over $1M.
And that was just a small sample of what I, as a newbie, noticed. :(


Hi Cindy and welcome to my world -- only 11 deficiences -- that's pretty good :)

I appreciate your comments on the preamble, I had not applied the wording exactly that way but I get your meaning. Here is a cut and past of the preamble:

"The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading."

I am not sure I take this to literally mean that it is the responsibility of the review appraiser to turn in suspect appraisal reports but it's a good thought and something to consider. Thanks and good luck in your career.

--Kim
 

Michigan CG

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Certified General Appraiser
State
Michigan
Ron, are you always an a-hole or just on days that end in Y?
 
Joined
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Professional Status
Certified General Appraiser
State
Montana
Turn In

My simple advice is to turn in a report in which you are a stake holder. A review does not make you a stakeholder. There is nothing in USPAP that requires an appraiser to turn in a report. Do not underestimate the ability of the person you turn in to do you harm no matter how well you feel protected by an anonymous filing. I don't recommend taking advice of this forum from a bunch of shrill lug nuts who want to hang every appraiser in sight. At the very least, ask your attorney's advice about your exposure and carefully read your E&O insurance policy.

By turning someone in, you have the power to seriously alter someone's life, to effect everything that will ever happen to them. If the client does not come forward and you shoulder this responsibility yourself for whatever reason you choose, you must consider living with all the consequences. I would also seek counsel from those who might remind you about casting the first stone and doing unto others.

Good Luck
 
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kim grant

Thread Starter
Junior Member
Joined
Nov 21, 2002
Professional Status
Certified Residential Appraiser
State
California
Thank you Doug for telling us about this. It does give one pause to consider. While reading your post I thought about the ones I have turned in and recall that I have never provided a copy of my review report with any complaint -- only the original report, a list of my concerns and with copies of public records and MLS records for the state to use in their own investigation. I was asked to provide a copy of a review I performed on one complaint and I declined to do so and they did not push it. I felt that it was the state's responsiblity to investigate not mine.

Perhaps I was lucky or perhaps you were unlucky but I think the foundation and the state boards need to consider a way for reviewers to bring problematic reports to light without risk because if don't do it, who will and how will we ever clean up our profession?

I wish you well and pray for you to prevail at your trial. If you feel you can please share your outcome as I would be keenly interested in knowing the outcome.


Regards, Kim
 
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