APPRAISALS......TRIED AND NOT TRUE!

I have to tell you ... I read a lot of stories like yours on AR, and I just can't understand how banks do business there.  Why is a bank waiting until the last week to send out an appraiser?  That would have been done here, immediately. 

Also, are they using appraisers who appraise properties in that area all the time, or are they using a commercial appraiser to the an appraisal on a townhouse? 

I've only had a problem with 1 appraisal in the last 10 years, and I supplied the bank with all the comparables, to make them see that the appraiser was out to lunch.  They actually discussed my comparables with the appraiser and he agreed that I was right.  He was too busy to do a thorough job, researching the TRUE comparables.

Even when we had a disagreement on the appraisal, there were still 2 months before closing, so we had plenty of time to do 10 more appraisals. 

Something has to change.  People shouldn't have to suffer because everyone, especially the banks there, are so relaxed.  This is people's lives they're playing with.  It's unacceptable.

Good luck.

You may want to post this blog to the REALTORS group too.  Someone from your side of the border may have some ideas/advice for you. 

I have seen my share of head-scratching appraisals but this one sounds like an episode of the twilight zone.

The only other comment was on 80 showings of different townhomes. The thought of that makes me weary.

Hope you get resolution and close this deal. Best of Luck

Dear Amanda;

I've been a real estate broker AND an appraiser for 39 years. I've written numerous articles, courses and seminars for my professional real estate appraisal education service that I've provided in many of the United States. I hold 2 professional designations from a well respected international appraisal organization, and I also hold a Certified General Real Estate Appraiser license in several states.

The reason I'm giving your some of my background, is to provide you with some assurance that I actually know what I'm talking about when it comes to the appraisal industry (as controversial as my comment will be, to some).

It is my opinion, based upon all of my many years of experience, that real estate appraisers who derive virtually 100% of their income from very few lenders, are defacto employees of those lenders. Naturally, neither the appraiser nor the lender will agree with my opinion, since they both would bear legal and financial consequences.

However, let's examine the reality of this situation. First, anyone who continually derives the overwhelming amount of their annual income from just 1 or 2 clients has got to "satisfy" that client, or they're out of business. Is that employment? In my opinion, it is.

Then, lenders provide appraisers with a request for a service: What's the value of this property? Then, they provide the appraiser with a copy of the contract. Why provide a copy of a contract, which can on serve the single purpose of influencing the outcome of the appraisal, when you (theoretically) want an unbiased, professional opinion of the value of anything?

I do not believe lenders are really interested in obtaining an unbiased opinion of the value of a parcel of real estate they are considering lending on; they only want the appraised value to fit within their pre-determined lending criteria. And, if appraiser A consistently does not provide the lender with their desired pre-determined value, that appraiser no longer gets business from that lender, ignoring whether or not the quality of that appraiser's work product was properly undertaken.

Did you know, that the bankers who are the one's who are supposed to be getting appraisals made in compliance with various "independently" created appraisal standards, are, in fact, a permanent member of the Appraisal Foundation, the group that creates and enforeces the Uniform Standards of Professional Appraisal Practice (USPAP)?

You may, or may not know, that the reason these standards were created, and the reason appraisers are required to be licensed, resulted from the Savings & Loan crisis of the late 1980's and early 1990's which resulted in a federal law known as the Financial Institutions Reform, Recovery Enforcement Act (FIRREA). This was to prevent banks from becoming the "victim" of both bad appraisal and appraisals submitted by appraisers selected by borrowers. Yet, the practice of allowing borrowers "accept" or "reject" or "refer" appraisers to lenders is as widespread today as it ever has been.

So, when you get a lender that does not believe the appraiser it selected, you can bet it's most likely because the appraised value does not fit the lender's pre-determined lending criteria, or does not want to make the loan. Getting significantly different values on the same property within weeks, where there's been no substantive market change and no substantive change in the property, probably means: 1) One of the appraisers blew it and did a bad job, or 2) One of the appraisers has been successfully intimidated by their "employer," the lender.

I'm certain you're going to see lots of criticsm of this comment from others who are appraisers. However, I've based my comments on both facts, and factual circumstances that I have personally observed and have been subjected to.

Visit my blog at http://KennethJJones.com

You may also wish to visit my appraisal site at http://GlobalValuations.com

Ken - Outstanding information. Amanda..these AMC's are actually (many of them) owned by the lenders!  So random as it may seem...Bottom line, who runs the country?  The people with the most money.  Who are they?  Banks and attorneys.  It stinks that you got caught up in such a mess.

Very interesting thread here and a very good post Amanda. I am lucky that I have not had any appraisal issues this year.