What's Your Opinion? Who's wrong here?

I recently heard a case in which I personally believe an appraiser is being overly picky and troublesome. Here's the scenario, and I'd like to hear your opinion on this....

Purchase of townhome between two people that know each other in a FSBO transaction with FHA financing. In the initial appraisal, the appraiser marked the property type as detached, when in fact it was attached. (small technicality that must be corrected.)

The appraiser also noted some tile in the bathroom floor as cracked. While it was not coming up, it was cracked, located at the entry door to the bathroom. The buyer is ok with it as is and is not requesting the seller to fix the floor. However, the appraiser indicated that it should be fixed and estimated a cost to cure of $500. The notation of "cost to cure" could result in the requirement by an underwriter that this be fixed prior to closing, in which case the buyer and seller have to determine who does it and things get delayed until fixed. More of a mess than needed over something so small.

So upon review of the appraisal, the loan officer asked the appraiser to correct the property type and if they could remove the comment of the cost to cure since it is such a small amount and the buyer is ok with it. This is not anything that affects the safety, functionality or value of the home. The LO did not request they remove the comment of the cracked tile itself, nor hide it. But a "cost to cure" indicates a deficiency that must be addressed, which isn't really the case here. But in no way was the LO asking for some modification, inflation or change to the appraised value, nor requesting to remove anything of consequence.

The appriaser not only decided NOT to remove the cost to cure, but also added a note that the lender requested the note of the cost to sure be removed and provided further argument that in their opinion "a buyer would want this fixed before buying" it so the appraiser felt it should be mentioned and would not remove the cost to cure as requested.

In asking the appraiser this question, the LO did nothing wrong and a simple no would have sufficed. But to go further and make a note on the appraisal basically renders the appraisal potentially worthless! And the LO can't submit the original appraisal because the appraiser mismarked the property type. So now that the property type is corrected, this notation attached as well. Submitting an appraisal with this type of notation could raise red flags that cause all kinds of slow downs on this deal (and others to come.)

So my question is this... What is your opinion on how the appraiser handled this? Or do you feel the LO was wrong for even asking?


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Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Ed,  Never ran into this issue before.  Seems like the appraisor went a bit far and then didn't want to back off.  Take a deep breath and find a new appraisor.

Jun 05, 2008 05:29 AM #1
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

Sounds like an old school FHA appraiser, probably is the only one that misses the VC sheet! I know I have had more than one conversation with an appraiser about what is on an appraisal, I dont think it is a problem as long as it is not perceived as fraud.

Jun 05, 2008 05:39 AM #2
Charlotte Home Loans Your Charlotte Mortgage Lender
Charlotte, NC

LO can't simply go to a new appraiser. Since the deal is a FSBO, the lender requires the appraisal be ordered through a national vendor, which selects the appraiser randomly. This prevents the LO from requesting any particular appraiser or this might have been prevented.

New appraisal = more expenses

Jun 05, 2008 05:46 AM #3
Randall Schrader
Competitive Insurance of Dundee - Dundee, FL

My lenders don't require a RANDOM appraiser.  I'd dump this guy and pay for another.

The floor didn't detract from the price, but if it's looked at as "defered maintinance" (which it clearly isn't) then the deal is on hold.  A cracked floor tile is perfectly acceptable, it needs to "cover" the floor.  Basically, it's a cosmetic issue and if the appraiser wants to make a note, that's fine.

I would certainly ask an appraiser to reclassify this into something other than "cost to cure."  The problem is that in doing so, you are pointing out a second error and appraisers like any other pro isn't going to like that.

I see in no way any type of fraud or concealment.   Nobody is really wrong, sounds like an ego problem.

Jun 05, 2008 06:37 AM #4
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

I agree with the comments above. Find a new appraiser even if an additional cost is incurred. If ebverything is communicated clearly, I'll bet this deal can be saved. Good luck!



Jun 05, 2008 07:11 AM #5
Marko Vucurevic
VanDyk Mortgage - Matthews, NC

I'll agree that the appraiser didn't handle the situation reasonably but he did what he did.  My first question is has the LO seen the crack?  Is there perceived safety issue or strictly cosmetic?  Does it truly impact the value of the property as he implies?  If a new appriasal isn't an option, then ask the appraiser to include the pictures of the cracked tile.   Certainly if it was worthy of note and valued at $500 to repair he should have a picture.  That way, he gets asked to go back out and certify that the repairs are complete and satisfactory, right?

Jun 05, 2008 07:35 AM #6
Charlotte Home Loans Your Charlotte Mortgage Lender
Charlotte, NC

Thanks all. Interesting thoughts...

And yes Marko, the LO did look at the crack. The appraiser put it in the report. Seemed a nuisance at best, but I guess the appraiser saw it different.

Jun 06, 2008 07:14 AM #7
Shane Leady
Apella Business Solutions - Zolfo Springs, FL


Great question, has happened now and then here. 

I would Request the appraiser to note the item in need of repair and that the over all cost of the repair would not effect the value of the property therefore no cost to cure was noted. Also I would request a statement as to the effect of over all appeal lost for a typical buyer in the degree of minor/major etc.  This way the appraiser can note that he/she did not miss the item/issue and the underwiter will most likly accept the revised appraisal. 

If that does not work then you may need to see if the seller will put in a clause per the sales agreement.  Good luck with your appraisal.


Jun 06, 2008 09:21 AM #8
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