Questions and answers on hiring an appraiser

Bighorn is making a really large "blanket statement," one which at which, as a real estate professional, I am amazed! Real Estate Brokers and their agents, (like the fox guarding the hen house) will often be a source of inflating values because, they directly inherit the profits of the sale! Additionally, they do not always look at "historical prices obtained from sales," but tout what is being asked for, on the market. I know, I was a victim of one such. And know others victims as well. And to make the statement about bank appraisers running scared and "discounting values to protect the lender from the downside!" Where did this genius get this thin information as fact. Caveat Emptor

Bighorn is making a really large "blanket statement," one which at which, as a real estate professional, I am amazed! Real Estate Brokers and their agents, (like the fox guarding the hen house) will often be a source of inflating values because, they directly inherit the profits of the sale! Additionally, they do not always look at "historical prices obtained from sales," but tout what is being asked for, on the market. I know, I was a victim of one such. And know others victims as well. And to make the statement about bank appraisers running scared and "discounting values to protect the lender from the downside!" Where did this genius get this thin information as fact. These were irresponsible statements that Bighorn made. Caveat Emptor

ANSWERS GIVRN IN "WHAT TO LOOK FOR IN AN APPRAISER" NOT NECESSARILY CORRECT. FOR EXAMPLE: IS THE HOMEOWNER FILING A COMPLAINT ABOUT THE ESTIMATION OF VALUE OR THE APPRAISERS CONDUCT/ETHICS. ENTIRELY SEPARATE PROTOCOL. ANOTHER EXAMPLE OF POOR ANSWER: OWNERS ARE NOT ALLOWED TO SELECT THEIR APPRAISERS....MOST LENDERS NOW USE APPRAISAL MANAGEMENT COMPANYS..... NOW THERE IS A WHOLE NEW DIFFERENT CAN OF WORMS. MANAGEMENT COMPANIES CHOOSE THE APPRAISER. I HAVE PERFORMED DESK AND FIELD REVIEWS ON SOME APPRAISALS WHICH CLEARLY INVOLVED APPRAISERS PERFORMING WORK IN AREAS WHERE THEY HAVE NO EXPERTISE.

SOMEONE SHOULD HAVE CONSULTED WITH ME BEFORE WRITING THESE ARTICLES. lol MY OPINION IS THAT THE APPRAISERS ARE NOT CLEARLY OR SHOULD I SAY FAIRLY REPRESENTED IN THESE ARTICLES.

After retiring as an appraiser (27 years), I would go to a neighborhood broker for a reliable value estimate before I'd go to an appraiser. The broker usually works in and is consequently more familiar with a smaller area, and is more knowledgeable of the current market conditions (appraisers work largely from comparable sales, which are historical in nature). Still, I would drive all the comparable sales with the broker or appraiser and have them comment as to why your property would be worth more or less than the comparable. If you employ the appraiser, ask for six sale comparables, three of which are inferior (in value) to your house and three of which are superior. Your house should logically fit in the middle of the field.

As for the problem with appraisals, it's going to be very difficult to fix. The people overseeing the process usually tolerated a very wide margin of "error."

Once again an AP story which is inaccurate. A homeowner can NOT order their own appraisal for a home loan. Federal law prohibits a homeowner from doing this. Complaints about appraisals are usually its too low when its a purchase, but when the homeowner doesn't pay his bills the appraisal was to high. I agree there is some fraud that goes on in the appraisal industry. But lets put the blame where it should be placed.....the government and wall street. The government because of the dum mentality that EVERYONE should be able to own a home..No they shouldn't and Wall Street greed which created programs which allowed anyone get a home loan. Mortgage Brokers and Appraisers are required to follow the rules and when they are broken should be punished but zero in on the problem. I notice the author did not put their name other than AP I know why the article was written by some with just enough knowledge to be dangerous.

Bighorn must be a realtor. God help you if you rely on one for an estimate of value for your home. I can't tell you how many times they have insisted on "helping" me, by providing me with "good" comps. Like when I appraised a 65 year old house and she gave me new construction sales. Or the time - just prior to the "boom" when my appraisal "killed" his deal (on an overpriced property) and he argued that I should have used "better" comps - which were over a year old - instead of the sales that I used- which had sold in the past 3 months. I could go on and on.
In 15 years of appraising I have run across so many unscrupulous, greedy, and dare I say stupid, realtors it makes me sick. THEY are one of the big reasons for the situation many homewoners are in today.
Another reason is that as Paul noted, homeowners do not typically order an appraisal. I think that they should ask for referrals from people they trust, or call different appraisers and ask questions. They can then request that the lender use an appraiser of their choice, however, now that the powers that be are trying to lay this mess on the appraisers, that choice is pretty much out of their hands.

Bighorn, here is a question for you. How many CMA's have you seen that actually used all comparable sales within the subject neighborhood?

Generally, appraisers use sales within the same neighborhood when they are available. I personally have seen numerous CMAs that were done by ambitious (greedy) agents, that were grossly over valued.

I am a broker and a certified residential appraiser, and I can tell you that I have missed several listings, because I tell the truth. The average homeowner does not want the truth. They want to hear that they can get $50,000 more for their home. On another side, when homeowners have applied for a refi, many times they are asking for cash out for varying reasons, and the "estimated value" (pre determined value) on the order is too high. When an appraiser obliges the "estimated value", and the lender makes the loan, much of the homeowners equity has now gone into the loan. Sometimes, it may take 5 years to realize equity when this done. No one wins.

Just my thoughts.