• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

We Must Start Policing Our Own!

Status
Not open for further replies.

David M. Swaim

Thread Starter
Freshman Member
Joined
Jan 28, 2002
I have been getting a large number of field reviews since the first of the year and after reviewing these appraisals I can see why. 95% of every single one of them was literally crap. Still coming in with the numbers way over market. Appraisers are just not learning. Got one in today that the appraiser came right in with the sales price of $220,000 and the house was in less than average condition. He ignored a sale only 3 doors down that closed less than a month ago at $200,000 which was in better condition and had a superior location. I found others in the neighborhood that substantiaed my opinion of the property and no sales over $210,000 which were larger and in better condition. I am urging and even begging lenders to turn these people in to the state. We need to do this to get rid of these people once and for all. I am hearing the same thing from other appraisers I know. Its not an isolated appraisal. Its out of control.
 

Francois K. Gregoire

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Florida
He ignored a sale only 3 doors down that closed less than a month ago at $200,000 which was in better condition and had a superior location.
Quark,

Thanks for the post and expression of concern. The comment above has really aroused my curiosity. How is it a house three doors down has a superior location?
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
I honestly don't think this will end until the end users of appraisals put their foot down....and that is not likely to happen anytime soon. Why the hell should the lender care? Sure, they are going to have to eat a few bad loans, but overall, default rates are not that bad. Plus, these guys really aren't held accountable by the Feds. Look what we did when the S&L's blew up...we (taxpaying public) bailed them out! I was doing an appraisal inspection this past Tuesday in a not so nice area. A house across the street is pending. The list price in the MLS is $52,000. The agent told me (paraphrasing) "...well, thru some kind of magic, the sales price is $62,000" The "magic" he's talking about is a little creative financing when your buyer doesn't have enough cash. The only thing you need is a compliant appraiser and ....BINGO!
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Has eveybody started seein more Field Reviews in there areas? I wonder if a lot of these Field Reviews are "Ammunition" against ourseleves ?? Well I believe there are a lot of Field Reviews that MAY BE going a little overboard & this might turn around & bite us. Some people seem to be getting extremly picky on some inmaterial things.
 

David Mullen

Junior Member
Joined
Jan 17, 2002
USPAP needs to be amended to allow and require a reviewer to turn in poor appraisals to the state.

We cannot rely on the lenders to police this because that is not in their best interest. As is, they can make these fraudulent loans and when they default, the taxpayer picks up the tab. They have nothing to lose and everything to gain under the present conditions.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Quark --

We'll know they're really interested in the reviews when the reviews are ordered before the transactions close!
 
B

Bemis Pownall

Guest
Couple months ago I did a drive-by. missed contract price. it was upgraded to interior, so I throw in 3 more comps, comment that Realtors office is in differeent town-doesnt know market-doesnt know Fannie and Freddie guidelines. Look at deed for prop today..low and behold deal closed at purchase price, my appraisals were $25k less. This happens at least once a month. So why dont we go to the new homeowners nd explain that a good appraisal missed value...could these homeowners get together and sue the lenders? class action?
shouldnt the buyers be told that the first appraisal missed value??
Lets turn the tables on these greed mongers.
 

KD247

Senior Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Quark,

We've been seeing value increases like this for the last two years. Just out of curiosity, what makes you think that $220,000 isn't the most probable sales price?

How do values increase if sales prices must always be at the same level as the previous sales?

When you select your comparable sales do you filter out all the comparables that were sold at prices above their predecessors?

I agree that there are lots of poorly done appraisals out there and I too am worried that the pressuring of appraisers and 100% financing has lead to irresponsible buying and lending.

But, I find your generalizations and rash response just as scary. Our job is to interpret the market, not control it. When I see a property sell in two days at 20% over the latest comparable sales and I see, firsthand, four mostly-cash backup offers at similar amounts, what do you propose I do? Go turn myself in to the local marshal because I'm witnessing a heretical event that shouldn't exist in this universe that you've imagined?

If you tell me that your $220,000 offer included concessions, was made by a buyer who would pay anything for the lucky address, or was made in spite of superior properties currently available for less, then you'll easily persuade me that $220,000 isn't the most probable sales price. But you paint a picture of a rapidly rising market and then want to criminalize the act of recognizing it.

Prices are out of control. We both remember what happened at the end of 1989. But our job is to form an opinion of the most probable sales price, not to try and shake some sense into the market.
 

bradellis

Member
Joined
Jan 16, 2002
DaveM,

USPAP already allows you to turn in the appraiser to the state. State boards are considered to be peer review committees and are also bound by confidentiality.

So, go ahead and turn them in. You are already covered. This has been in place for years, and there is even a FAQ on it. Of course, FAQs are "other communications" and not a part of USPAP, but no matter. It is already in USPAP.

Brad Ellis, IFA, RAA
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Koert,
I partially agree with what you said.
A good appraiser will thoroughly analyze not only prior sales in a given neighborhood, but also the active and under contract listings to get a feel for what the current value might be.
I'm doing an inspection on a home today that the lender/homeowner thinks should come in at about $275,000. There are prior sales within the last year that could justify this, but low and behold there are active listings on the same street, very similar homes, that have had price drops and are still on the market in the $250,000 range. Added to the problem is a previous appraisal (exterior only 2055) done two years ago that has a value estimate of $255,000 which is being rubbed in my face. The appraisal was bogus, the appraiser chose three comps that all back to open space (which the subject does not), and adjustments for the difference were minimal at best. In a phone conversation to the homeowner I found that there are no special improvments that would make it any better than the other homes on the block that are still active listings.
In this situation I could throw in three sales that would justify the $275,000, but I know that the house probably would never sell for that if it were put on the market tomorrow.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks