This morning's Orlando Sentinel has a front page, above the fold article titled
"Did Appraisers Juice The Market?"
You can read the full article for yourself: http://www.orlandosentinel.com/business/realestate/orl-appraise1308apr13,0,7462240.story
A highlight to the story is a guy who purchased a condo and later checked the public records. He found out his new condo was over 200 sqft. smaller than the appraisal stated. Now I sympathize but I have to ask, "Why not verify the square footage before you close?"
The second situation mentioned is an appraisal done long-distance. Now this appraiser should be drawn and quartered. What he did was blatantly wrong and he knows it, yet he still has an excuse. He gives appraisers a bad name and hopefully he will be severely sanctioned and lose his license here in Florida.
But I also have an issue with these buyers. They didn't feel right about the appraisal but instead of raising a flag and saying something, they closed on the house. I understand they bought during the height of the real estate frenzy and yes, there were backup contracts, but does that mean you throw away a substantial sum of money?
NO! You ask questions and you get answers. If you can't get answers, then run as fast as you can away from this deal. Don't use that bank, mortgage broker, appraiser or Realtor anymore and start over. Because, really, it isn't worth the trouble this is going to cause you down the road.
We all know the appraiser has great power in the real estate transaction. This is the person who is the expert, he knows how much that golf-course frontage and swimming pool is really worth. According to this article, some of these experts can be easily swayed to bend to the wishes of the mortgage broker, builder or (GASP!) Realtor.
According to the article "90% of appraisers have felt pressure to adjust property values."
I am glad to know that most of that 90% did not break under pressure. There will always be a few unethical people in any profession. And those few people are the ones who make the splashy headlines. Let's face it somebody doing their job and doing their job professionally just doesn't scream interesting.
So, can we blame appraisers for "juicing the market?"
No.
They are just one part of the equation. A pretty powerful part, but still only one part.
I think blame can be spread to many different areas. Certain appraisers are to blame, as are the unethical mortgage brokers, real estate agents and builders. And I am going to go a step further and place some blame on the consumer.
That's right, I said the consumer deserves some of the blame too!
I am not speaking of every consumer, but you know who I am talking about. (And I truly hope I am not talking about you.) The consumer I am talking about is the consumer who wouldn't listen to the professional people they hired to guide them through the process. The consumer I am talking about only heard what they wanted to hear and were mostly blinded by the huge dollar signs in their eyes. I am talking about the consumer who didn't read what they signed.
That consumer is to be blamed.
They made a bad choice. I am sorry, but when you make bad choices there are consequences.
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