Unethical home appraisor

[Meka]

I'm in the process of purchasing a new home. The asking prices is 585,000. We had it appraised last week and the appraiser came back with a value of 500,000. Which really causes some financing problems. I was surprised it came in at 500,000 because most the homes within half a mile are just under a million. Yesterday the seller called me and explained that the appraiser told her she could put it on the market for $650,000 and sale in in a week. He then told the seller her had wanted to purchase a home in this area for years but homes rarely come up for sale. Buy the time he left he had told the seller if I could not purchase it because of financing problems he would pay full price if she would carry a second for $65,000. Keep in mind my lender sent this guy out. Should I report this guy. Or just string him up by his neck?

[techweenie]

You have to report him to your lender, ASAP.

Your lender should be able to get another appraiser involved quickly.

Is the seller willing to sign a statement about what she was told? If so, the entire company your agent works for will likely drop the appraiser like a hot stone.

[Moses]

Appraisers in California are bonded and are required to sign a "fiduciary" commitment. I believe his tampering is criminal.

If you lose the house, get a lawyer.

[widebody911]

What is his motive? Is he trying to buy the house, and wants to sabotage your transaction?

[scottmandue]

I just refied my house, the lady at the bank pulled up an appraisal online in a few minutes. Probably not offical but gave us a ballpark figure to get started. Couldn't be too hard to do, the folks at this bank were not the brightest bulbs on the tree.

[RickM]

Originally posted by Meka
Yesterday the seller called me and explained that the appraiser told her she could put it on the market for $650,000 and *sell it* in a week.

But why this statement? The seller could take this advice and say adios to you and appraiser.

[Moses]

Originally posted by widebody911
What is his motive? Is he trying to buy the house, and wants to sabotage your transaction?

It's not unusual. One time over a few beers, a home inspector bragged that he would sometimes kill a home sale with a disastrous pre-sale inspection report; bad roof, drainage problems, cracked foundation, etc. Then his friend and business partner would buy the house cheap and flip it for a nice profit.

I hope he's in jail by now.

[vash]

meka, you two new shortterm goals should be:

1. buy that house
2. cause that unethical mofo, to lose his job.

[Dantilla]

[i] Should I report this guy. [/B]

Absolutely. Today.

[techweenie]

I had an appraiser give me a low appraisal once. He arrived and made a big deal about parking and securing his Targa (the house was totally secure -- behind a gate and up a driveway not visible from the street). At some point I opened the garage door and he saw my then-new and tricked-out 993 C2S sitting alongside my 928 cabriolet, and things went downhill fast.

[Moses]

Originally posted by techweenie
...and things went downhill fast.

It might have been the Carter-Mondale bumper sticker.

[techweenie]

Originally posted by Moses
It might have been the Carter-Mondale bumper sticker.

Or the large day-glo peace sign painted on the front of the house?

[Tishabet]

Definitely report the guy.
As for you appraisal woes, if the next appraisal still comes in under your agreed price, I would investigate some seller financing.

[pbs911]

I don't see anything wrong. So he gave you a low appraisal, so what. Appraisals for financing purposes are always lower than the actual value. That's just how banks further protect their investment. Just as appraisals for divorse proceedings are generally higher. No two appraisors will give you the same value. if you don't like it get another.

[JavaBrewer]

We encountered a shady appraiser last year when we refinanced. My wife calls me at work informing me that the appraiser is just a kid and seemed like he didn't know what he was doing. The appraisal came in $250K under what a couple neighbor houses recently sold for. Called the lender and complained. Turns out the appraiser was getting so much work that he was sending out his younger brother to take pictures and get measurements. When pressed the appraiser could not describe our house or neighborhood. Lender resolved with a new appraiser. With market conditions as they are/were there are a lot of folks looking to capitalize - fuch the fiduciary crap.

[Moses]

Originally posted by pbs911
I don't see anything wrong. So he gave you a low appraisal, so what.

That's not the problem. This is the problem;

"...he told the seller if I could not purchase it because of financing problems he would pay full price if she would carry a second for $65,000."

[Meka]

Originally posted by pbs911
I don't see anything wrong. So he gave you a low appraisal, so what. Appraisals for financing purposes are always lower than the actual value. That's just how banks further protect their investment. Just as appraisals for divorse proceedings are generally higher. No two appraisors will give you the same value. if you don't like it get another.

The low appraisal really is not the problem. The problem is the seller before talking with MY appraiser would have probably been willing to meet me in the middle in the event of a low appraisal. Now that she was told she could get $70,000 more no problem in the event I did not purchase the house and that the appraiser would pay full asking price is a problem. Honestly, you see no problem with this situation?

[RANDY P]

Originally posted by Meka
I'm in the process of purchasing a new home. The asking prices is 585,000. We had it appraised last week and the appraiser came back with a value of 500,000. Which really causes some financing problems. I was surprised it came in at 500,000 because most the homes within half a mile are just under a million. Yesterday the seller called me and explained that the appraiser told her she could put it on the market for $650,000 and sale in in a week. He then told the seller her had wanted to purchase a home in this area for years but homes rarely come up for sale. Buy the time he left he had told the seller if I could not purchase it because of financing problems he would pay full price if she would carry a second for $65,000. Keep in mind my lender sent this guy out. Should I report this guy. Or just string him up by his neck?

Call and write a letter to the State Department of Financial Institutions. (DFI) Make sure to correctly identify the appraiser. You can verify this through the State website.


CC a copy of the complaint to the appraiser

What he is doing is illegal - he has a vested interest in the property- this is something akin to blockbusting and manipulation of value which is a big time no no.

1 - extend the purchase and sale (if the seller is receptive) to give yourself some time. Make sure the Listing agent as well as your own are aware of the situation. YOU DO NOT NEED TO CHANGE THE VALUE OF THE SALE. REAPPRAISE AND GET THE VALUE YOU NEED WITH A NEW APPRAISER. IF YOU CAN MAKE THE CLOSING DATE THEN THE SELLER CANNOT BREAK THE AGREEMENT. A good appraiser can get this ripped out in 48 hours.

2- Get a new appraiser and reappraise. Save the old one for the DFI to review.

Good Luck.


rjp

[Moneyguy1]

What he alledgedly said to the homeowner is "hearsay". May or may not have been an accurate quote. In fact, I would posit that it is possible the owner made this up to jack the price.In many areas, three appraisals are required; high and low tossed out. Like the good Doctor said, no two appraisers will give you the same number.

The real question is whether a buyer is willing to purchase a property that may be priced above actual market value. In this volatile market, it is difficult to keep up with the market value. I would be hesitant to appraise a property nowadays although I once did in New York State (yeah, licensed there, not here in the Wild West).

When was the last time the house was assessed for tax purposes? If the assessment is low, how will that affect the new owners?(many areas reassess upon sale) What is the square footage? What is the going rate in the area per square foot? Are there amenities that would affect the price, either making it more or less desirable? Things like pools are, by many appraisers, looked upon as an "atttactive nuseance" since it attracts some buyers and puts off others (I once had a listing where the owners had an in-ground Gunnite pool filled with dirt and turned into a garden). New owners restored the pool. Condition of the property? Repairs needed? Age of furnace/AC/water heater?

[RANDY P]

Here's a little excerpt out of a current CA property appraisal.

Yes, this is boiler plated into the FNMA 1004 form. Pretty much says it all..

"I certify that, to the best of my belief:
The statements of fact contained in this report are true and correct.
The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal,
impartial, and unbiased professional analyses, opinions and conclusions.
I have no present or prospective interest in the property that is the subject of this report or the parties involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting predetermined results.
My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value of direction in
value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
My analyses, opinions and conclusions were developed and this report has been prepared, in conformity with the Uniform Standards of
Professional Appraisal Practice.
I have made a personal inspection of the property that is the subject of this report."

Now granted, no two appraisers are going to derive the same value, but if they're following the rules they should be close. Value is determined by numerous factors, most notably what similar dwellings in the area are selling for (this is a personal residence - and comps should be abundant)

$500k down from $585k represents over a 10% adjustment. A hole that big in value can be proven fairly easily assuming that the original listing price is reasonable.

We could all be wrong, maybe the seller and listing agent are on crack. But, assuming it is in fact provable as a reasonable selling price I think there's a case to be made here.