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UNBELIEVABLE REVIEW-CONSIDERING CONTACTING APPRAISER DIRECT

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Robert L. Ripp SRA

Freshman Member
Joined
Oct 11, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I really dislike reviews and have essentially been refusing requests to do them for some time now. Usually just by quoting a fee I consider appropriate for doing them. However, work was slow last week so I accepted an assignment for a field review. Here we go.

Property is a small ranch duplex, 1300 square feet. 2 beds, 1 ba each side, no garage. Sold for $189,000 just a few months ago in October. I was familiar with the property as I considered it for a comp on an appraisal I prepared in Dec. No unusual circumstances, arm's length transaction. Appraiser's estimated value as of Dec 20, 2002 is, get this,
$250,000.

The local market is stable at best. No discussion of extensive renovations, additions, etc are made nor are apparent. The effort to reach this inflated value is extremely transparent. Dissimilar rental comps, dissimilar sales comps, outrageous cost figures, usual stuff. Appraiser estimates market rent of $1000 per unit when it was sold renting at approximately $700 per side and an abundance of data on similar rentals exists indicating market rent at around the $700 figure. Sales comps are substantially larger, with garages, and the appraiser MAKES NO ADJUSTMENTS FOR SIZE!!!. The explanation being that "square footage adjusments are not made due to the lack of recent sales in the immediate area that bracket the subject property". HUH?? How about reproduction cost estimate of $130 square foot for averege quality, frame construction. Good comparables are of course avialable, which are highly similar in size, style, quality, # of beds, baths, etc. They are conveniently overlooked.

This stuff infuriates me. I am considering contacting this appraiser directly to either scold them and/or offer them some friendly advice on techniques and ethics. Have any of you experienced people out there ever done this? Would any of you recommend this? Unlawful?

I should report this to real estate commission. Have read so many dicouraging reports that any actions seldom result from such fraudulent work that I am hesitant.

Your comments and suggesions are sought.

Thank You
Robert L. Ripp, SRA
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Robert,

What state are you in?

I would make sure my USPAP compliant Standard 3 Review was was very USPAP compliant and send my review along with the appraisal under review to your state board with a signed complaint. I'm in Florida and know it would be handled properly though. It seems I'm lucky to have that.

There is no way I would allow one like that to slide through without filing a complaint no matter what my state board is like. If I were located in the State of North Carolina, I might even forward a copy of my complaint to both the State Attorney General and the ASC. Since this is a closed sale, I might even go for a complaint against the loan officer and mortgage company that originated it as a fraudulent loan.

There are so many that have never read the 2 page Statement of Limiting Conditions and Appraiser's Certification that is signed and attached to residential reports. Any of you that haven't read it lately, please do so soon.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Do the standard 3 review, send it to YOUR client. I wouldn't be discussing my report with anyone other than my client. Then send the report with your complaint to the state, but do NOT contact the appraiser. That could bring on other legal ramifications that would not be fun.

Picture this: You call, no answer and leave a message. You call, he doesn't answer....but sees that you called on caller ID. You call, he answers, both of you get into an over the phone pissing fight. An hour later, the sheriff comes knocking on your door to see about the stalking charge. 8O Once you post bail, you get home to hear a message from your client. Get the E&O ready, breaking client/appraiser confidentiality is a no-no. 8O :cry:

I say, do you job, turn it in.... then turn him in. Let the state do the calling. Go out in the yard and yell about what an idiot he is, but keep your nose clean.
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Not to mention that the client who asked you to do the review would be really, really hacked.

When I first started doing FHA appraisals, I received a call, left on my answering machine, from a nice man who said he was reviewing one of mine. He gave me great compliments and said that the report was really good, but there were a few things that I needed to put on the report to satisfy FHA, such as completing the estimated market rent section on the back page, etc. Mind you, the underwriter had not ever called me and asked me to complete that portion.

So I called a friend (appraiser) who I knew had done hundreds of FHA appraisals and asked him. He said that some of the things the reviewer told me were not necessary - he didn't even do. He suggested I call a certain guy at the HUD Tampa field office (I had taken a training course there) and ask him. So I did so.

That afternoon someone from the Atlanta office called me and asked me who it was (the reviewer) that called me, that it was expressly against the rules for any reviewer to contact an appraiser and that the reviewer's A.. was Gr... for doing so (actually he didn't cuss.) Anyway, the reviewer had not given his name (I actually played it back for the Atlanta office to be sure I wouldn't get in trouble for lying) and I didn't have caller ID.

So the moral to this long story is.......most of the people who order a review would be highly incensed if you contacted the appraiser direct.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
ASIDE Form client confidentiality issues: check out that USPAP 8O sir:

:( Unfortunately I believe that if the appraiser was any good a call would not have to be made. Usually when you get a report like that, the appraiser knew exactly what they were doing, and would not thank you for your opinion.

If the appraiser is simply inexperienced, he or she might take constructive comments and go forth a changed person, but this is highly unlikely.

I generally write up the most super compliant Std 3 review I can construct, and deliver it to my client. If the rpoert reeks that badly I take twice or treble the effort to insure that the picture is very, very clear and precise as to the faults in the original analysis. If the occasion warrents I include address, phone and fax numbers for the state appraisal board, and a strongly worded reccomendation that the report be submitted for further analysis and possible action against the appraiser.

There is a local (atypical) property on which I have performed this type analysis several times, never seen any action :( but probably stopped the loan from closing. :roll: the client doesnt always want to know...
 
A

Anonymous

Guest
Review the report carefully and submit it to your client. Ask your client's permission to submit the report to the state.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Review the report carefully and submit it to your client. Ask your client's permission to submit the report to the state.

Walt,

If that is your personal opinion, I respect your for it. However, client permission is NOT requireto filea complaint with your state board or any govenmental agency. They are specific exceptions to the confidentiality rule.
 
B

Bemis Pownall

Guest
Had one like that last week
report soo bad i declined the review assignment
sold 12/01 $71
Appraised 11/02 $300 no mention of prior sale.

My comps showed $125+/-
I took pictures of sales used in report and subject. Printed off dozens of MORE comparable sales and sent it off to the state. I was ill after inspecting exterior of subject and comparables used...

Sent 2 others along with it both same story $100k over valued..

Its ashame what is going on out there.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Bob:
While I agree that no appraiser need client permission to turn in a bad report...

In my state and I suspect many others: a report filed by a client lender carries about 200% the weight of a submission by 'another appraiser'... :roll: Unfortuante perception being that even with a well-crafted review that there may be some professional sniping going on :evil:

Hence my preference for client submission of the report: but do note that I put a stamped addressed to state envelope into the mail with MY findings, on the same day the cleint gets the review. :!:
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
If its that bad that it approaches fraud, be sure you are right, then file a complaint with the state after completing the review. Just be sure you are right because a complaint that the state considers improper (appraiser hassling another), then they can come after you in many states.

Roger Strahan, SRA
 
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