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When is an appraisal not an appraisal?

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Conrad

Thread Starter
Freshman Member
Joined
Feb 4, 2002
Got a request for an appraisal from a local bank. It was for a refi. Attached was a printout titled " a personal Home Market Evaluation". It is from a local RE agent. In small print was "powered by Housevalues.com.
It has some information about several homes that have sold in the area and a range of value with the statement, "Based on my knowledge of the area, my estimate of your home"s current value is: low of $zzz,zzz to a high of $zzz,zzz.

On the page that gives the info about 4 sales in the same master development is the statement," this is not an appraisal, only an estimate of the current market value of your home.

I checked, and just before blank space on almost all of the forms I use is the statement thart includes the words " estimated value". Isn't the estimated value of a property an appraisal? Do I need more training?
Conrad
 

Frederick R. Ruffell

Senior Member
Joined
Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
It is not an "appraisal" when performed by someone/thing other than a licensed appraiser?
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Concrad --

Lots of people don't know what a "real" appraisal is. They throw all the garbage on your desk which came to their desk when they were told to order an appraisal.

If you have a valid order to do an appraisal, do it and throw the leftovers in your workfile.

A bit simplicistic, I know -- but to the point.

Get on with your working life and make yourself some money. And let the slackers try to catch up to you!

There's nothing that makes newbies feel like grownups and part of the game of earning a living like getting out there and producing and getting praise and getting paid for it. Every day of the rest of your life will be exciting and you will learn something each and every day. Few occupations can say that in such a fundamental way.

Ever will it be thus.
 

Judy Whitehead (Florida)

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Florida
It sounds to me like a lender's "subtle" way of telling you what they hope the home will appraise for. Perhaps they think by sending you a printout that it doesn't appear like lender pressure.

I think it would be untruthful of all of us to say that the lenders still many times manage to throw in what they wish the appraisal value to be. When I am blindsided like that, I don't know what to say and had a hard time handling it, as well. Some of them don't know any better and some of them do, but are trying to be clever. I think if it were me, I would ignore it and if the question ever comes up, you must tell them that you couldn't consider the information, as it was implying that you were appraising the property with a pre-determined value in mind.

Perhaps I'm wrong about this, but I think that is how I would handle it. Anybody can do something called an appraisal or an estimate of market value, but only licensed, certifed, etc. appraisers can do an appraisal in a federally related transaction.
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
"I (we) estimate the market value to be........."

Folks, that's what we sign at the bottom of the URAR. If this isn't an appraisal, I don't know what is.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Conrad, ..... Coercion comes in many forms, often disguised and subtle and with smiley-faces drawn on the page. Soon, you will have a vast database of the many shapes and forms of these little devils. Your easiest move is to simply and totally ignore it all. If you are plenty busy these days you have a wonderful opportunity to play cat-and-mouse with these shenanigans. When it's bold and flagrant and horrendous and homeowner and L.O. guesstimates of value are all over the order then I instantly require c.o.d. If they accept those terms then I proceed and I feel no obligation to respond verbally to the $$-guesstimate and things proceed with my conclusion to value. Most often they stop you on the c.o.d. request because the h/o has been promised no-fee-to-them. The cunning client knows you caught them in their act of coercion.....so they may "cancel" the order and dish out some canned lines of excuses for that decision and move on to another more malleable appraiser. One of my favorite things to do while I am speaking on phone with client if discussing the c.o.d. option is to ask THAT person "to help me out please", and ask what THEY know about the subject and fire a string of questions about the house, the conditions, the updates, the neighborhood and the local market. Moments later we both know that the client is absolutely clueless about the value they puked out and now it seems obvious that one had better see that house. At best, 1 in 10 orders like this will see my value being near, or sometimes higher, than the guesstimate. (The client rarely learns from their past experiences)....And, "So, I'll suggest to the h/o that you prefer me to collect my fee at the time I visit the property, and I'll call them right away and set up that visit, o.k. ?"......Sometimes, some clients need to be taught how things work out here in the jungle.....I am only insistent on c.o.d. when they have forced that (only viable) option upon me. Give me a clean order with no off-the-wall guesstimate of value...and I'll gladly invoice them. Like Frank G. said in another recent posting,..."They just won't stop".
 

Frederick R. Ruffell

Senior Member
Joined
Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
Exactly what judy said, and if you were to to go back to the lender and ask why they don't use the "appraisal" they just sent you I am sure you will be told thay it is a "personal Home Market Evaluation" ant that it says " this is not an appraisal, only an estimate of the current market value of your home" and the person completing it is not licensed and the underwriter won't accept it.
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
In most states, the appraisal law states that providing a value or opinion or estimate of value by a real estate broker or salesperson to a potenital client is not an appraisal.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
From my experience, this is how I think most of the LOs get into "implying" how much the property ought to appraise for:

About the 3rd question out of the LO's mouth to the HO is 'what do you think the property is worth.' Then, if that number is high enough, they back all their numbers into it and base the rest of their conversation with the HO on that number, including a cash-out of course.

If the HO is wrong, so is the LO.

But one thing is for sure. The LO did make the decision to go ahead with the transaction based on the HO's number. And it's the appraiser's job to pull it out of the bag. That's a little more difficult when the HO's guess is $210,000 but the property appraisal opinion comes in around $85,000.
 
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