What do you do with a problem homeowner?

[Andrew Urbanek]

I inspected a property this weekend and it will end up being a very complex and time consuming appraisal report, which is no big deal as I am used to these types of assignments.

Here is my issue: The homeowner was very nice and friendly to me, but he was venting and complaining because he had just had an appraisal performed for the subject under another lender and the new lender (my client) would not accept the old report because the original appraiser was not on the new lender's approved list, which is why this baby landed in my lap.

The homeowner was telling me how bad the other appraiser was and how the old report was complete rubbish. The homeowner said, "Had that appraiser not made the value I needed I would have raised hell with that terrible report."

Well to make a long story short, the homeowner gave me a copy of the old appraisal and I completely agree with everything in the old report except for the comparables used and the final value estimate. In short, I completely agree with the original appraisers determination of a certain "living area" being non livable area due to lack of permits/construction quality etc, and I will probably come in at a value 20% less than the original report by using more suitable comparables.

Basically, I know the homeowner is going to be very upset with me for doing my job. I saw and heard the bashing that he was laying on the prior appraiser and I know I am going to get it worse because I am not going to "make value."

I know that he will complain to my client and I still have a few days until the report is due.

What do you all do in this situation? I usually take my time and turn the report in on the last due day and then in a day or two after that I will endure the homeowners wrath on my answering machine. Eventually, the homeower will shake enough branches and I will usually get a call from a vice president of some banking operations with my client that will call me with crazy stories that the homeowner will have concocted in order to discredit me because my appraisal is solid. Usually it goes along the lines of, "Andy you have a great track record with us but the homeonwer said your were drunk, cursing, rude, mean, high, angry, racist etc at the time of the inspection, can you please elaborate on what happened?"

Once this happens I usually ask my client when did the homeowner complain about me? Before or after you told them the appraised value? The client always responds, after we told them the value, to which I go uhhh huh...very interesting. Well let me ask you, if I was drunk, high, cursing, rude, mean, racist etc., why would they wait four days after the inspection to tell you this? Why would they not bring this up until the value is mentioned?

And that is usually the end of it. So there it is, I know this roller coaster ride is boarding again for me right now and I was interested in how you all deal with these situations!

 

[Terrel L. Shields]

I wouldn't deal with it. I would simply call the lender and tell them that I had a conflict of interest with the owner and would have to back out of completing the report. I would make no other statement. i simply would not do the report and avoid the grief. That, to me, is a business decision. I suspect I would be better off working on something else rather than deal with an unreasonable jerk who will waste hours upon hours of your time.
Most appraisers I know will hunker down, do it anyway, try to be as optimistic as possible, and in the end have a slightly inflated report (inflated because they are subconciously trying to avoid much more grief than they have to.) and hours wasted making both the bank and the borrower happy. In the end, it is unprofitable. I am old and tired. I take the easy way out.

 

[Mike Kennedy]

"The homeowner was very nice and friendly to me, but he was venting and complaining

Sorry Mr. Jones, I hate to cut you short but I reallllllly need to concentrate on the job at hand to make sure I adequately describe your property. Please allow me to do my job. Thanks...... I'm heading outside to measure and take photos..... should be there about a half hour or so.......then come back inside to photo and sketch .....
when that's all done.......I will review the info with you and request you supply me with pertinent info on any recent improvements you may have made since you purchased the property. Thanks !.......

proceed outdoors.......do the job.


"because he had just had an appraisal performed for the subject under another lender and the new lender (my client) would not accept the old report because the original appraiser was not on the new lender's approved list, which is why this baby landed in my lap. The homeowner was telling me how bad the other appraiser was and how the old report was complete rubbish. The homeowner said, "Had that appraiser not made the value I needed I would have raised hell with that terrible report."


doorbell ring...........Ok Mr. Jones, I'll start on the interior now.......please feel free to have a cup of coffee and relax should only take about half hour or so ......I'll meet you in the kitchen....... Thanks a Lot. Thwart ANY attempts by owner to shift discussion away from THE TASK AT HAND .......by sticking to "just the facts Jack"...... with a SMILE.


i.e. 1. NEVER accept a copy of a prior appraisal

2. NEVER discuss a prior appraisal or an appraiser

3. RECOGNIZE the owners' attempt to INFLUENCE your opinion - and do not succumb - but do so in a PROFESSIONAL and Friendly Manner

4. GET PAID.

 

[chicago guy]

I would complete the report and deal with these issues if/when they arise. If the homeowner is this way with you he is probably the same way with LO and most are pretty reasonable.
If we turn down every assignment that somebody didn't like our value, how much work would we have left?

 

[Mike Phillips]

You've received three opinions - good advice all.

I'll just toss out an option. Phone the client and let them know what you experienced during the inspection. Don't give them a specific value or indicate a direction in value in relation to the previous appraisal. Just let them know you are dealing with a potentially hostile borrower. Might be that someone on the client's side would appreciate the warning.

 

[Tom Eichholz]

I wouldn't deal with it. I would simply call the lender and tell them that I had a conflict of interest with the owner and would have to back out of completing the report. I would make no other statement. i simply would not do the report and avoid the grief. That, to me, is a business decision. I suspect I would be better off working on something else rather than deal with an unreasonable jerk who will waste hours upon hours of your time.
Most appraisers I know will hunker down, do it anyway, try to be as optimistic as possible, and in the end have a slightly inflated report (inflated because they are subconciously trying to avoid much more grief than they have to.) and hours wasted making both the bank and the borrower happy. In the end, it is unprofitable. I am old and tired. I take the easy way out.

Yep, I agree.

This guy was merely trying to intimidate you up front because he knows that he is probably in loan ratio (money) trouble unless he gets a really "puffed" appraisal.

Tell the lender you are going to take a pass because of "Miscommunication" or some such vague thing with this homeowner (no $ charge). Put the ball back in Mr. Homeowner's court with this lender. These type of appraisals always seem to come back to bite you in the ***, one way or another...no win stuation and lots of wasted time & lost sleep.

 

[Mztk1]

Years ago I used to have the same problem. I've changed my ways about 5 or 6 years ago.

I always answer the phone, if I can, when the owner calls. They usually just say they want to discuss the report. I say sure, I'd love to, we can discuss your house, but we cannot discuss the value because I am bound to my client to only speak with them about it. When they bring value up again, which they always do, I say, look, I'll gladly look at any data you have. If you have sales that are more recent than the ones I used, inside your project and as similar or more similar to your house then those used send them to your lender who will forward them to me and I will gladly look them over. If I am wrong, or you have better data, I will incorporate it.

I am always kind and polite, never agrumentative even when they are.

I never, and I mean never, hear back.

I used to always get the "I don't like how he was dressed, or how his hair was combed, or he's a racist, a sexist, a jerk, unprofessional, incompetent" thing. I think they just want to talk about it, they are frustrated, and when you put the ball in their court and they are forced to look at it from your perspective, it's over.

 

[DonRico]

You've done most of the work already. The writing of the report is the easy part. Did you get paid COD?? Or must you collect an invoice from the Lender??

You say that you "completely agree with everything in the old report except for the comparables used and the final value estimate" Well, that's the whole thing in a nutshell, isn't it?

If you got paid already, I would call the homeowner to verify the lack of permits. If the HO admits there are no permits, he probably knows how this is going to turn out. You probably have photos of quality of construction. Double check everything in the report and send it out.

If you haven't been paid yet.....better cut your losses. This sounds like one you'll never see a dollar on.

 

[Mike Boyd]

For me it is a non issue. The few times I have been called by an unhappy homeowner he or she has sounded frightened. No threats. They usually just want to ask a question...which I answer. Only agents and loan officers get hostile and I tell them to send me comps or data that show me to be wrong and I will reconsider. If it is FHA I tell them to send it to their lender's underwriter...which they can get from the LO, in the case of the borrower.

I take that back. I DID get a hostile homeowner once. It was a divorce situation and the wife had already moved out. She said she KNEW the house was larger than what I showed. I offered to re-measure provided she would pay me for my time if any of my measurements were wrong and that she had to be there. She declined and that was the last I heard about it.

 

[Bearslide]

Lots of good advice here, but I must agree with Mr. Kloss. I don't make a habit of walking away from assignments.

I also agree with whoever said perhaps a phone call to the client is in order - WITHOUT discussing value. I've had to do it twice, and in both cases, the client already knew they had a belligerant borrower on their hands.

Funny thing though - I used to receive a lot more of those type calls when the market was hot and skip was merrily inflating every appraisal. Unless someone is living under a rock, they KNOW the market isn't good.

It has also helped a great deal that we present the borrower a print out that states "no pre-determined values, USPAP compliance, client confidentiality, appraisal may not result in a loan" etc. After they read and sign it, I discuss it at length with them. I usually get them nodding and smiling and agreeing - we are talking the biggest investment of their lives and they deserve a thorough, honest appraisal, one which will allow them to make financial decisions. I also ask them then and there if they are aware of any neighborhood sales, any sales similar to their property. Kind of hard for them to come back and throw useless sales at you when you asked on-site.