We have all experienced the geographically ignorant real estate appraiser who comes to do our appraisal and has no idea about our town or neighborhood values.  The $250,000 sales price appraises at $175,000 because the appraiser used "comps" that were not comps.  These are appraisers who are doing $400 appraisals for $200.  How does this happen when the borrower was charged $400.00 for the appraisal?

The appraisal management company, many who are owned by the lenders, charges the borrower the $400 for the appraisal.  They pay the "appraiser" $200 and pocket the rest.  There are cases where the lender keeps $100, the appraisal management company keeps $100 and the wanabe appraiser pockets the $200.

April 1 (how appropriate a day for this to go into effect) brings us the long awaited appraisal reform bill that was part of the Dodd-Frank (talk about mental midgets) took effect.  This was supposed to pay appraisers "customary and reasonable" fees.  It would be the $400 in the previous example.  This way the pool of qualified appraisers would be increased.  The public would not be subjected to appraisers who prostitute themselves.  Sounds like the government might have got it right this time.  Not so quick Sparky because the law has been perverted.  How?

The objective third party information surveyed includes government agency (VA, FHA, etc) fee schedules, independent private sector fees, etc.  Guess who is included in the survey?  You got it - the appraisal management compnay.  The fox guarding the hen house.  Wonderful.  The HUD statement shows a $400 "appraisal fee" but that doesn't count.  It is what the appraiser is paid.  What a bunch of governmental crap.

Where is NAR on these obvious issues that have a negative impact on our incomes?  Why are they not using "our" lobbyists to push congress to get it right?  We the largest "union" (I know we are not a union but it feels like one) in the United States.  NAR should be pushing their considerable weight around.  We could be the 800 pound gorilla if NAR played it right.

Where are you NAR?

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Posted by Webster, Ma Conrad Allen, Realtor on 04/17/2011 11:10 AM   Comments (7)  
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7 Comments on REAL ESTATE APPRAISERS CANNOT CATCH A BREAK

APR
17
2011
115,768 Points 4 Featured Posts

I often wonder where I money goes with NAR....I don't think they do enough for all of us in real estate.
11:21am • #1

That was an education. I had no idea the way the monies payed were payed out. Lol! Still laughing at the mental midgets comment. NAR does not do enough for us. I agree with Diana and her comment. The whole appraisal thing is VER frustrating. I could go into stories about that.
11:27am • #2
555,452 Points 31 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Appraisals have been horrible recently. I knew about this, and can't wait to get it fixed. Banks use two broker opinions and one appraisal before putting any REO on the market. They give most weight to the appraisal. They are wrong as often as right. I have to spend 2 or 3 months proving that my price is the right price, when it finally sells at what I said in the first place.

Phil
11:48am • #3
307,503 Points 103 Featured Posts Outside Blog Called Shot Master

Right on the money! I wish I had the power of those words in my hands when Chase sent a little, smarmy gut to appraise my investment property 3 years ago---this guy didn't know sh-- from Shinola and yet here he is in the Hamptons using Long Island Prices to comp my house with. I even handed him a list of recent sales right around my property and he said "No thanks; I can't use a clients information"! I said to him: "These are public records---they are more accurate than anything else you might come up with because they just happened this month"....he refused and "reported" me to the bank!! I know this is off topic but you get the point---I still had to pay him a hunk of money and he did not do his job!
1:25pm • #4
646,560 Points 68 Featured Posts Outside Blog Attended Rain Camp

Diane - Me too!

Michelle - It is very frustrating.

Phil - How sad.

Paula - What a moron.
3:20pm • #5
285,465 Points Called Shot Master

You are right the politicial action committee of the Realtors should be involved,

should provide their analysis and make their (our collective ) voice heard.

cheers

Nor
5:11pm • #6
APR
18
2011
646,560 Points 68 Featured Posts Outside Blog Attended Rain Camp

Nor you are so right but how do we get them involved?
7:12am • #7


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