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Blame the Appraisers

Interesting story from Fox Business blaming appraisers for current challenges in the housing market.  We’re certain there’s a fact somewhere in this story but we couldn’t find it.

Comments
  1. Robert Walker

    Yes, I see the problem and it is loud and clear. I had a lender tell me that the appraisers are told to come in 10% below and on another appraisal with another transaction and agent, the agent was told by the appraiser that he was directed by the bank to find and use the lowest comps in the area (compared a house built in 2001 and at 2,032 sq ft to 1,700 sq ft homes built in the early 80′s). On VA appraisals, that appraiser’s word is of God. I attempted to challenge an appraiser’s appraisal of a home I was selling and ended up kicking the buyer because the appraisal was right in your face corrupt! I went to the bank and they said it would take like three weeks to challenge it. The appraiser used homes in bad spots in the tract and all were 400 sq ft smaller. He refused to use exact comps! The house was 2,447 sq ft and there were comps at 2,447 sq ft, EXACT MODELS, on three doors down from my listing, and he refused to use them.

    I could have ticked up the price but the seller wanted to sell faster. The appraiser came in $20K lower and we just dug in our heels because this guy was just plain corrupt! We put it back on the market and sold it at list price.

    You can report these appraisers to the state and I went to file a complaint with the state but the nice gentleman from the state said it could take a year to get to it.

    Can you imagine the damage this appraiser can do with just one bad appraisal? We allow ours to sale at this price and all the other pending homes will now have a comp showing a decline in the market.

    The problem is, these appraisers are use to doing appraisals on REOs and lowballing them. Hey, the buyer is excited and the bank is too overwhelmed to care.

    We all suffer from the cap that been placed and the restrictive growth in home equity. Just like we suffered from the appraisals that were over inflated, we now are suffering from them lowballing! We as tax payers are being slammed because as they lowball these homes, REOs are closing much lower than what they could close at. Which means the banks are a bigger hit and it ultimately rolls down to us.

  2. David

    What has happened is appraisers are now free to do their job without undue influence, threats and pressure from real estate agents and mortgage brokers etc and still get business. This woman is the typical manipulating mortgage broker and agent. She does not get to determine what values are and thats what this is really about. If she had legitimate comparables she would not have these problems as she calls them. The appraiser is the voice of reason the independent third party. She and people like her are the problem and part of the reason we are in this mess. I think we need to do is prosecute people like her. Thank you HVCC and Dodd Frank.

  3. I heard allegations, but no facts. I heard mis-information, the HVCC was not a law, it was an agreement between Cuomo and Fannie/Freddie. I heard a lot of accusations but no evidence. Pretty shoddy reporting, and appraisers get smeared, again.

  4. Deborah

    As a Certified Residential Appraiser and a Broker I have to disagree with several statements. We have successfully challenged appraisals when it was apparent the value was unreasonable and closed on time. Several times appraisers have received request for additional comparable sales, sales that they may not have had access to and they have modified the report based on the request to review additional sales. None issue. Her statements are misleading and generalize a broad spectrum.

    Also her statement: ” Appraiser should have to provide comparable sales”. Appraisers already do provide a report that details the comparable properties. There is a grid with an initial 3 sold properties and secondary market requires 2 active or pending listings in addition to the sold properties that have to have sold in the past 3 month or newer and no later than 6 months unless you have good explanation. The grid details sale date, concessions, site, design, age, square footage, lower level and numerous amenities. Again misleading. I would think fact checking would be order before you run something like this. Also I would like to state that it’s really important to remember one high sale does not make the market.

  5. Here’s a novel idea, instead of HVCC what if the buyer was ultimately responsible for picking the appraiser? They charge the buyer for the appraisal ultimately. Perhaps then these appraisal management companies would go away & the appraiser would have a fiduciary duty to their “real” client? I know it’ll never happen but nice to dream.

  6. Kris

    Are they sure this person is really in the business??? Sounds like she has never actually seen an appraisal! Where does she come up with the statement that appraisers should have to provide comparables – that is what the whole darn appraisal is about —– is she for real?

  7. Nice smear job on the part of FOX. Some un-intelligent rambling about the housing market being directed by Obama, blaming HVCC on the current administration, demonstrating a lack of knowledge in the basics and paying no attention to fact-getting. An interview with a broker…who is paid when a closing takes place. That puts her hat in the ring and shows some bias for her cause, doesn’t it? An appraiser is an unbiased party who gets paid (poorly) to produce a fair and factual appraisal, an estimate of value based on comparable sales and his/her expertise in reading and analyzing the market data that exists in the field. Some background, I’ve got over 20 years in the appraisal field…barely managed to survive when I told brokers and loan officers the “truth” about values. HVCC hasn’t killed me yet…I keep putting out the truth on market value. Just because an uninformed buyer is willing to pay the price, that doesn’t make it “market value”. An unusually high sale in a neighborhood should be avoided…the norm is what makes the market. We know what we’re doing, lady real estate broker…and we know what you are doing.

  8. Tami

    Jerome, I am disappointed. Lousy reporting. Interviewing a broker that has apparently never seen an appraisal, that is paid a commission on the sale price?? No wonder they are whining. Cajoling about appraisers like some annoyance? You have no comprehension of the appraisal industry or our role in protecting the public.

  9. Santa

    In response to the gentleman that wants buyers….the “true” clients….to choose the appraiser:

    Part of the problem is that buyers think they have a right to rely on the appraisal and also to use the appraisal as a guide to the value of the house- neither of which is true. No one but the client has a right to anything in the appraisal- and the appraisal, by law and by statement is only to be used for, and in the context of, its stated purpose which, in this case, is to assist the lender in making a lending decision.

    The appraisal is a tool for the lender- and the lender alone- i.e., the client- and is to be used as a risk management tool to allow the lender to make a decision concerning whether or not the appraised value of the property will allow them to make a loan that fits within their own internal risk criteria. The buyer is provided a copy only as a required courtesy. The buyer that relies upon it does so inappropriately and at their own peirl.

    If the buyer wants to use an appraisal to check the sale price, to negotiate the sale price, or for any other reason (s)he is free to independently retain an appraiser for that purpose.

    This misunderstanding, so seemingly prevalent today, is the basis for much frustration and of many frivolous suits….you used the appraisal and were not the client? Too bad- so sad.

  10. Jerome Nagy

    Just to be clear, the interview posted was not conducted by the National Association of REALTORS (NAR). The statements made in the interview do not reflect opinions or statements of policy held by NAR. We posted the interview here because it’s been gaining traction in appraiser circles and we thought our readers would like to share some opinions on the piece.

    Separately, we are glad to see that Santa does exist. We are hopeful he is still taking requests.

  11. Santa

    Santa does fraud investigations….no requests, but watch for plenty of coal in the stockings this year.

  12. David R

    The presentation from Fox was biased and poorly presented. The guest speaker underscores why an appraisal is need, she is too close to the deal to be objective and mistakenly feels that somehow the broker’s interest should be taken into account. As an appraiser I can talk to anybody involved in the deal I just cannot talk about “value” of the property being appraised. If there is a gap in the appraised value and the desired value let the purchaser pay the difference in cash.
    Overall a very poor an unobjective presentation.

  13. Bryan Parkhurst

    We have an interviewer who is not an appraiser, we have a guest who is not an appraiser, yet they are making judgements-comments and portraying like they know the appraisal business. If your going to have an segment on the appraisal business fox news try interviewing a licensed appraiser. You’ll find that our hands are tied behind our backs, the banks have full control of the appraisal industry, the banks are profiting off the appraisal industry and we are not an independent entity anymore with the banks dictating to us step A-Z. Lets get the whole truth out there. The consumer would love to know that when the bank asks for a $500 check for an appraisal fee that the licensed appraiser only gets maybe $200 of that fee. Guess who get the rest of the appraisal fee? the bank and their bank owned amc. Why are appraisers not allowed to send an invoice with their appraisals? Why are banks allowed to profit off the appraisal industry? How can an appraiser remain independent when the banks are making money off our industry?

    Fair and balanced – I think not.

  14. Rob Burkley

    Appraiser frustration with AMC. Appraiser requested reasonable fee for a FHA / REO, asset valuation assignment for lender considering a short sale. They reply……..

    Hello Rob,

    I am aware of the Federal Law regulating AMC’s. In reviewing the law, according to

    H.R.4173-814

    “(i) CUSTOMARY AND REASONABLE FEE.-

    “(1) IN GENERAL.-Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies.

    There is no such verbiage that states that an AMC must pay the prevailing fee. Please rest assured, when an active government fee schedule has been created and placed into effect PCV will gladly comply. However, at this time no such fee schedule has been implemented. Also according to

    H.R. 4173-813

    “(g) RULES AND INTERPRETIVE GUIDELINES.-

    “(1) IN GENERAL.-Except as provided under paragraph (2), the Board, the Comptroller, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau may jointly issue rules, interpretive guidelines, and general statements of policy with respect to acts or practices that violate appraisal independence in the provision of mortgage lending services for a consumer credit transaction secured by the principle dwelling of the consumer and mortgage brokerage services for such a transaction, within the meaning of subsections (a), (b), (c), (d), (e), (f), (h), and (i).

    “(2) INTERIM FINAL REFULATIONS.- The Board shall, for purposes of this section, prescribe interim final regulations no later than 90 days after the date of the enactment of this section defining the specificity acts or practices that violate.

    According to this section guidelines have not yet been established.

    Please be advised that $220 is reasonable and customary for this product type in this area as we have appraisers on PCV Murcor’s panel that do accept for our standard fee.

    Please advise if you are willing to complete this order as it is now delayed…

    All the Best,

    I believe most experienced and qualified appraisers ( who have the ability to defend / explain fair market value ) will turn this assignment down therefore the lesser experienced appraiser may accept this and be conservative with the value to avoid AMC / lender conflict.

  15. Rob Burkley

    Shopping for a cheap appraiser……….see below.

    “Hello, we have a property we need appraised at 17 Stimmel St Columbus, OH 43206. 1025 Multi-Family Conventional Refi. The property is zoned C4 Commercial, however, it was built prior to this zoning being in place. The property was grandfathered in and is now legal nonconforming. It is being used as residential and the Client is requesting it be appraised as Residential. Please advise what your fee and turn time would be to complete. Thank You. Brad”

    waiting for the lowest bidder.

  16. Jerome, I am disappointed. Lousy reporting. Interviewing a broker that has apparently never seen an appraisal, that is paid a commission on the sale price?? No wonder they are whining. Cajoling about appraisers like some annoyance? You have no comprehension of the appraisal industry or our role in protecting the public.

  17. Jack Wilcock

    As a 20 year retired Certified Residential Appraiser, I have never heard such lies passed off as news. The Fox political disinformation machine seems hell bent on “swift boating” anything from the Obama administration. Why don’t they just admit that they hate him for his color and politics and say something honest for a change. These programs are like infomercials — One person agreeing while pretending to interview another. Where is the reporter?

  18. Jack Wilcock

    As a 20 year retired Certified Residential Appraiser, I have never heard such bias passed off as news. The Fox political disinformation machine seems hell bent on “swift boating” anything from the Obama administration. Why don’t they just admit their political bias and say something honest for a change. These programs are like infomercials — One person agreeing while pretending to interview another. Where is the reporter?

  19. Ms. Dolly Lenz cleary does not understand appraisal methology. She and her sellers can list a house for whatever they want and damn the appraiser for not making it work. Not once did she discuss what actualy goes into the appraisal process such as, measuring the home which 90% of brokers don’t do allowing mislead square footage to the seller and buyer, making adjustments so as to not exceed net/gross percentages, taking into account the DOM (days on market) for comps, and the decline/increase rate that has taken place over the past 12+ months. (This would be reflected on the 1004MC form for those brokers who have never noticed this on an appraisal report.) The appraiser’s report will more than likely be reviewed by another appraiser or by FHA depending on the type of appraisal being done, which is another reason for an appraiser to be conservative. If the value appears off, the appraiser gets questioned, not any broker. Ms. Dolly Lenz and many other brokers don’t seem to realize that we shotty appraisers out here are also running out of comps! So where are the brokers getting their information for their sellers? The HVCC is officially dead and has been since 10/28/2010. Ms. Lenz and other brokers can talk to appraisers and quite frankley, I would prefer to talk to them to find out how they produced their CMA to list their homes. I think brokers haven’t been released from fantasy land and it’s time to come back to earth with, uh, the rest of us uselessl appraisers that screw everything up.

  20. Don Haynes

    There is no such thing as Legal non-conforming. It is either legal or not legal. Zoning area allows for grandfathering but is never called legal. . Grandfathering cannot never be legal. Look up the definiton of legal in Real Estate. It may be acceptable by zoning authorities, but never legal.

  21. Sandra

    I did not read all the comments but do agree with one that found the broker to be wrong about “the lender should have to provide comparables”. As a broker I have never seen an appraisal that did not have comparables. Also, I don’t understand her comment about the appraisal slowing things down. So her statements makes me question her credibility.

    Now I am not supporting appraisers. On a recent transaction which was a short sale with two lenders the primary lender received an appraisal of $530,000. The secondary lender received an appraisal of $390,000. The property was in terrible condition so my buyer had his own appraisal done which came in at $445,000. Without even discussing my opinion of value what does this tell you about our appraisal system?

  22. Larry Bauer

    I have never seen anything regarding the number of appraisers that have been convicted of collusion with the lender or agent. Everybody says that the appraisers even now are giving the lowest rates and using REO’s, short sales and foreclosures. When an appraiser is doing an appraisal and of the houses for sale in a neighborhood are outnumbered by the REO’s, etc., there is no choice but to use them as comparables. Its not fair to the buyer to go to another neighborhood that has a lesser number of REO’s. I agree this is hurting the market and the sellers that have been keeping up their payments; but until all of the REO’s are finally sold and taken off the markett there is nothing that I as an appraiser can do except report what is happening in that neighborhood.

  23. As a State Certified Residential Appraiser, I am appalled that the National Association of Realtors (NAR) included this on their website, update, newsletter. I am a member of NAR and would like to encourage them, and FOX and anyone else who wants to get to the root of an appraisal issue to put together an expert panel of experienced, qualified appraisers and address the issues based on actual facts, law and professionalism. The interviewers and interviewees should also have knowledge, experience and professionalism. This is a poor example of mis leading the public, Realtors and appraisers. I believe we all have one thing in common. We would like to eliminate the problems and design a solution which would benefit all parties to the transaction. This can be done, but must be spearheaded by competent, professionals who have a goal of coming up with a beneficial solution. Bring together an expert panel of appraisers and allow the Realtors to address the panel with concerns and questions. I have participated on many expert panels and typically offer solutions to assist Realtors in overcoming the appraisal hurdles during the appraisal process. When I share my knowledge and expertise with agents, they gain information which benefits them, their buyers & sellers in a smoother transaction. Knowledge is power. Unfortunately, as in most industries, a few bad apples may taint a profession. In addition I recommend hiring professional appraisers with knowledge, expertise and competency.

  24. Shelley

    If the lenders would take the time to read at least pages 1 and 2 of the URAR and the comment addendum, the information may be informative to them in making the loan.
    No one making the actual loan is taking the time to read and understand what the appraiser is saying about the property.
    In their hunger for money they are approving buyers that are marginal at best with no regard to residual income for everyday living.

  25. Ron

    Its official, everyone has lost their mind and FOX is there to present the spin. I urge all Realtors to take their complaints to the state review boards instead of making yourself look pathetic on a news cast with an agenda. Sounds like it came directly from the NAR and not some random email. Everyone gives the oppertunity for a counter point, where is the Appraisal Institue in this broadcast. Where is the explaination that the stated income loan and other creative financing were not made up by an appraiser. The guys blames collusion of the appraiser (and i am sure there was) and doesnt speak of anyone else? Then the host, in a round about about way, supports collusion to fix the current crisis.

    The appraisal doesnt set the market, the appraisal reports an unbiased opinion based on facts. This lady (lets call her Dr. Suess because of all the stories she makes up) gives a great idea, use sales to support the findings. What do you think EVERY residential appraisal provides? That discredits everything you have to say. Your telling me that there is an appraisal out there 40% below market value? To put that comment in perspective, your saying a house that you have sold for $300,000 you have an appraised value at $180,000. Sounds like a made up story.

    In regards to Robert Walker’s post, I urge you to send that appraisal to the board again, it wont change the value but will not allow things like that to happen again. I dont know what state that happened in but it wasnt NJ because our board would investigate your concerns and take action. I understand there is incompatant people in every profession, and yes I have met an incompantant Realtor in my travels.

  26. Joseph Russo

    Oh Please. What about the agents out there who were lowering prices every month, by racing to the bottom of the housing market for that area. No one is holding out the agents out there as a potential cause for the drop in the market. So Prudential please take a look at yourself in the mirror as some of your agents may have participated in the lowering of the market as well.

  27. William

    I have lost five deal because the appraser lowballed the numbers and the seller said no I will take my chances with a short sale to get more than the apprraser wanted the house to sell for. At this rate we will be british citizens again and have to start over if you get my drift.

  28. The “True” client is the Lender, so let’s let the Lender pay for the appraisal and if the deal doesn’t close then the Lender eats the appraisal fee…I would bet that Dolly Lenz has never sold a property in her life…I agree with Kelly Kellogg, a panel of ‘”in the trench Realtors and Appraisers” that work in the field Day in and Day out, should be assembled to address the AMC issue.

  29. I agree with all of the appraisers comments and they are all right. Hopefully on 04/01/2011 we can be able to make a halfway descent living when the “customary and reasonable fees” are supposed to go into effect.

    But it will most likely be an April Fools Day for the appraisers.

  30. Fed-Up!

    With respect to your opinions, I’m FED-UP with the law-makers including the Obama’s policy and the plans to save people homes, FED-Up with the appraisers, FED-UP with Real Estate Broker and R.E. Agents, FED-UP with FHA & HUD, FED-UP with mortgage brokers and FED-UP with all lenders…have I missed anyone!

    Yes, the news media and their guests (the experts)!
    Hey we don’t want to miss the Federal Reserve they are passing on the bucks for 0.00 ZERO interest to the lenders!

    Homeowners have been “ROBBED” of their home values and home equity, due to the fact that banks including HUD they come to your neighborhood and sell distress property for 10 cents on the dollar, day after day, month after month, year after year not one but 5 or 10 properties and in some neighborhoods as many as 50% was sold for 10 cents on the dollar, and we are discussing appraisers and appraisal reports, and the blame game continue on a national network, its a joke America!

    Walk-up America!

    I should say go to sleep America!
    its going to be a very long period of time before we can go back to normal…
    let say in 50 years!

    To keep selling properties for 10 cents on the dollar, well the new buyer can sell and make profit, and the second buyer for same home can sell and the thrid homebuyer for the same property can sell too…and homeowners are happy to see the value went up in their neighborhood…

    OOOOOOOOOOPS..HUD are back…and sold another property or two for 10 cents on the dollar and the value went back down….

    America, go to sleep!
    there’s no such Obama solution…not sure who will be the 55 President of USA then count on them to have your home value back to normal!

    Appraisers have 5% allowance to work out the number, so don’t count on 7% or 10% of more value of what your neighbors sold…

    Appraisers they fill-out the blanks its part of the transaction process….the experienced who will convince their client (the lender) to accept 5% higher value and that’s all folks, to keep your client happy I’m sure the lenders will be in control of the out-come!

    I’d like to bring attention to the general public
    Who created the bubble and who created the crash of the home value
    its the circle (Mortgage brokers/lenders, Agents, Appraisal) all are part of the transaction, so there’s no such an angel in the circle all have contributed to such mess to our Great Country for personal benefits and GREED.

    on 11/2005 I was at a brokers weekly meeting and agents were proud of how much they sold such proerty for $200, $300, and $400 per sq. ft. and i said: hey people any home sold over $160 per sq. ft. is over priced, they laughed at me its like when jay leno thru a joke at you…I said: you may laugh now but you will bite your nails soon…and in 4/2006 when the price of homes start coming down, while our expets are saying it NO…it start in 2008 guess what our experts they never worked in real estate, they never worked as an appraiser and they never worked for a lender or a builder, they have a MATH degree…and are making or drafting charts…with colors!

    If Obama listened to a small advise from the average citizens when I suggested to have all homes in USA evaluated under the rules of (basis)…or value properties before the bubble in my opinion that was year 2000 should be the basis and find out what was the value then, add 3% inflation to each home that will be the true value of each property, and the ones who bought in the high bubble 2003-2006 let the lender absorb the loss and modify the loan to the true value, now its too late to do anything…the value will keep going down …all what it take for HUD and FHA and the lender to sell one home in your neighborhood…and put the country back for months and years…

    Keep in mind homeowners have been “ROBBED” and they relied on their home equity to pay medical bills, send kids to college, buy a car, go for vacation, gamble, pay credit cards, pay IRS, open small business…etc. they kept the economy going…today we have no home equity, we have no loans available we have no credit cards…and Obama want to fix the economy…1 +1=2 mr. president not 1+1=3 and it will never be…unless modern colleges start teaching our kids hey 1 +1 = 3
    but i’m still from the old School…and 1 plus one is still 2-two!

    Merry Cristmas everyone, and go to sleep!

  31. The issue is the appraisers, brokers, buyers and sellers are pawns to the take over of the industry by the government regulators under the guise of protecting the consumer. I have sold real estate for 30 years and the definition of a real estate sale is two ready willing and able party’s coming together in an arms length transaction. If the money is tight buyers have to pay cash and prices go down. If banks want to lend money buyers can get loans and prices go up. Appraisers are merely a tool for what the banks want to accomplish. There have always been government backed loans in the form of FHA and VA from no money down to 3.5% down without more than a .5% foreclosure rate. The pendulum has swung too far and until the blame game stops and government loosens up it’s consumer protection (control) over all aspects of our life our economy will not change.

  32. Pete Burness

    Perhaps Dolly’s boss should receive some feedback on the ignorance of her employee who was sent to fox “news”.
    http://www.elliman.com/feedback

  33. seriously this is complete BS. I really wish the people that support fox news would stop. Thanks for reposting this crap? (I hope you catch the sarcasm there) This should be pulled from your site immediately the only response this story deserves is complete silence. Merry Christmas!

  34. CMAC

    As a RE broker, this interview was entertaining. Last appraisal I saw had comps on it. Not sure how they do things where “the expert” was from. Personally I have never had an appraisal come in “40% less” than the sales price and how can a typical 72 hour turn around “slow down the process”. STOP LIVING IN THE PAST. THERE NO SUCH THING AS A 2 WEEK “FINANCED” SETTLEMENT, ANYMORE. Just like in every industry you have good and bad. An appraisal is an opinion of value and opinions vary from one person to another. Appraisers are just doing their jobs. Everyone has to work harder to make a dollar, especially for appraisers when they now have someone else in their pockets. Greed created this problem and now we have to work thru the issues. Just stop complaining and blaming other people for your own problems.

  35. mel

    WOW! She has no idea what she is talking about. Please let her and her boss know how you feel!! http://www.elliman.com/feedback

  36. I have been in the real estate business either as a Realtor or Loan Officer since 1977. I recently had an appraisal done on my personal residence for the purposes of a cash-out refinance. The value came in somewhat lower than I expected, but was sufficient for the my loan request. When I reviewed the appraisal, one of the comps used by the appraiser was adjusted -$25,000 because the appraiser said it was on the golf course, and my home was not. In fact, the comp was not on the golf course which I pointed out to the lender. I didn’t make a big deal about it, but wanted them to know it was factually inaccurate. Actually a positive adjustment should have been made to the comp because my home has a superior mountain view. To my knowledge nothing was changed on the appraisal. The appraisals that I’ve seen since the new regulations went into effect, have been rife with errors. I had another where the appraiser used a comp that he/she said sold for $394,000 when it actually sold for $326,000. We attempted an appeal because it came in $5,000 low, even though I had superior comps the appraisal company made no adjustments, and I don’t know if they even saw my comps. In this case the error actually helped support the value they did come up with. I

  37. I have just had first hand experience on this matter and did close the transaction, however with a second appraiser and a Buyer who was able to understand that Appraisal is subjective to who is appraising the property.
    As an Agent, the Comps for your CMA should be near the listed price—duh!—Right? Ok, the new rule says “No contact with the Appraiser or ‘swaying them”. Ok makes sense, as it always had. But you as a listing Agent can be there at Appraiser walk through time and hand over your CMA to the appraiser and any other special or outstanding things such as 100,000 in hardscape and landscape needs to be pointed out. (Make sure they take a picture of whatever upgrade so they recall when it gets time to put a price on it.)
    That house I sold, was for full price instead of it being wacked 30k like the first appraiser suggested and the Lender agreed with my CMA as well as the pointed out upgrades–ordered the second appraiser which I then did hand over a CMA pointed out Palm trees and so to get to value. Another part of the job in slow times.
    Another reason experience gets the job done instead of giving the transaction to a “starting” Agent or Family member who gives you 2500 off your commission yet swacks 30K off the sale price because a 28 year old Renter who has an appraisal license says so.
    These Short-sales are not helping either, I realize this as the banks do not care if the house goes backwards 20k in a neighborhood as they want it off the books and they have bailout money to help circumvent that.
    Classic example I have a listing with a confirmed closed sale within 30 days for 300 and had Lenders toss their troubled property on the market for 35k less….. As a homeowner we just get jammed up for Borrowers who should have not been sold that much of a house on a “stated loan’ in the first place. Along with that issue it is important for an Agent to do a real good job on their B.P.O’s -Broker Price Opinions. That, after all is where the price starts from. Back to an appraiser trying to see value in a sea of short sales is a challenge as well as the threat of 20 hours of more schooling if their appraisal gets challenged. And of course there is the U/G’s boss who looks over the file and would like to be in a file with better LTV then what the last sold was for. We as Agents must police our fellow agents if you have the communication with them and remember to educate your Appraiser with substantial information as well as point things out to the appraiser no matter how good they say they are. Just tell them you have had some files you had wished you pointed all things out to the Appraiser as once they get turned in they are hard to challenge or get a thrifty Buyer to think up after they get a wiff of a under-valued property. This ‘tact’ of making sure the Appraiser saw everything and was made aware of certain properties that may have been in pre-short-sale or eminent foreclosure as neighbors do know things of this nature or know it was on the horizon.
    As a like comp in the stack could really have an influence on the file, especially if information like that is not known as the U/G’s boss asks about Why the higher value or how did you get there? The Appraiser needs to know this information to then notice deferred maintenance on that “slam-dunk” comp etc….or to state to the Lender that, yes there is a like property for less yet it was about to ‘sink in foreclosure’ this way someone has all the info before stamping the approval or denial on it.
    Hope this helps for those wrestling with this huge challenge which really makes a 12 year veteran such as myself wonder if I should stay in the business all together.
    Banks dumping properties and bellying up to the bail-out window with appraisers running scared because of the threat of 20 hours more of school if that U/G’s boss does not agree with value, even though that Underwriters boss is NOT an appraiser in the first place. Usually a guy with an ivy league accounting degree who knows someone who has that decision making authority! So hit them with substantial facts to get the pessimist away.
    Simon Faris
    http://www.visitsimonsays.com

  38. W. Patrick

    The appraisers are once again blocking access to that brand new Audi the Mortgage Brokers and Real estate agents have their eyes on. And this message is coming from the folks that are telling me to ‘Buy Gold!’ and food storage….

    The fact is, an appraisal is an opinion of value which is supposed to be based on an objective analysis of current market data. Real estate agents and mortgage brokers get paid when they close a deal, and the paycheck is a percentage of the sale price-The higher the sales price, the bigger the check. Appraisers get paid paid per appraisal, regardless of whether the deal closes or not. They have no financial incentive to inflate or deflate values, if they are honest. The appraisers that have been working the longest are the appraisers that are unbiased.

    And by the way, appraisal fees haven’t gone up in 15 years. During the last real estate boom when a mortgage broker would ask me why the appraisla didn’t ‘come in’, and I responded with a talk about how values can’t increase three-fold in ten years if salaries haven’t increased three-fold in ten years, they would often tell me how much more money they were making in the current market…..

    Greed. Simple greed is doing us in. The ‘smart’ people complain about those that are attempting to regulate their earnings, while you and I (the tax payers) sit by and pick up the pieces when it all comes crashing down.

    When you don’t like the message, shoot the messenger.

  39. KEITH

    Why would Fox go to someone who obviously does not have a clue as to how appraisals are performed, as evedenced by her comments. Go to appraisal professionals for appraisal advise and information, you might get closer to the truth. The real truth will not be popular. So called Real Estate professionals are the problem. Not willing to do the work and stay the course, allowing properties to sell well below value and then they become comps and thus the snow ball effect. A sales contract does not carry the weight it once did because people are often misled into thinking that the internet has armed them with the information they need, and the Real Estate professional has convinced the buyer that they are looking out for their best interest and thus buyers often are attempting to purchase a home where there are equal or better homes available for less money, in the same neighborhood. The Appraiser then is the bad guy when this fact is made known.
    I have been in the Real Estate and Appraisal profession a long time and I have never had a lender or any banker tell me to come in low. I have however had many Real Estate professionals ask, tell and threaten if I did not come in higher. I have even experienced a bank representitive that was successful in having my company removed from an approved list because he did not agree with my value findings. I wish appraisers had the protection an under writer gets. Oh and there is nothing that says an interested party to an appraisal cannot have itelligent conversation about a report. If the report is not clear as to the data used to reach a value, there should be conversation. And I have never done a single family residential report that did not include comparable data, I cannot however assure that the lender would release all the data to a third party. Come on Fox, lets get real professional information before you start pointing fingers………

  40. Ruben

    This lady is a retard. I don’t know where this is happening but it certainly isn’t the case in CA. Us appraisers use comps already, what the heck is she talking about! I’ve never felt so free to evaluate a property with absolute no influence. I’m not scared of lowballing or bringing the value too high. I love the HVCC and Frank Dodd, we just have to get paid now!!!!!

  41. I have just had first hand experience on this matter and did close the transaction, however with a second appraiser and a Buyer who was able to understand that Appraisal is subjective to who is appraising the property. As an Agent, the Comps for your CMA should be near the listed price—duh!—Right? Ok, the new rule says “No contact with the Appraiser or ‘swaying them”. Ok makes sense, as it always had. But you as a listing Agent can be there at Appraiser walk through time and hand over your CMA to the appraiser and any other special or outstanding things such as 100,000 in hardscape and landscape needs to be pointed out. (Make sure they take a picture of whatever upgrade so they recall when it gets time to put a price on it.) That house I sold, was for full price instead of it being wacked 30k like the first appraiser suggested and the Lender agreed with my CMA as well as the pointed out upgrades–ordered the second appraiser which I then did hand over a CMA pointed out Palm trees and so to get to value. Another part of the job in slow times. Another reason experience gets the job done instead of giving the transaction to a “starting” Agent or Family member who gives you 2500 off your commission yet swacks 30K off the sale price because a 28 year old Renter who has an appraisal license says so. These Short-sales are not helping either, I realize this as the banks do not care if the house goes backwards 20k in a neighborhood as they want it off the books and they have bailout money to help circumvent that. Classic example I have a listing with a confirmed closed sale within 30 days for 300 and had Lenders toss their troubled property on the market for 35k less….. As a homeowner we just get jammed up for Borrowers who should have not been sold that much of a house on a “stated loan’ in the first place. Along with that issue it is important for an Agent to do a real good job on their B.P.O’s -Broker Price Opinions. That, after all is where the price starts from. Back to an appraiser trying to see value in a sea of short sales is a challenge as well as the threat of 20 hours of more schooling if their appraisal gets challenged. And of course there is the U/G’s boss who looks over the file and would like to be in a file with better LTV then what the last sold was for. We as Agents must police our fellow agents if you have the communication with them and remember to educate your Appraiser with substantial information as well as point things out to the appraiser no matter how good they say they are. Just tell them you have had some files you had wished you pointed all things out to the Appraiser as once they get turned in they are hard to challenge or get a thrifty Buyer to think up after they get a wiff of a under-valued property. This ‘tact’ of making sure the Appraiser saw everything and was made aware of certain properties that may have been in pre-short-sale or eminent foreclosure as neighbors do know things of this nature or know it was on the horizon. As a like comp in the stack could really have an influence on the file, especially if information like that is not known as the U/G’s boss asks about Why the higher value or how did you get there? The Appraiser needs to know this information to then notice deferred maintenance on that “slam-dunk” comp etc….or to state to the Lender that, yes there is a like property for less yet it was about to ‘sink in foreclosure’ this way someone has all the info before stamping the approval or denial on it. Hope this helps for those wrestling with this huge challenge which really makes a 12 year veteran such as myself wonder if I should stay in the business all together. Banks dumping properties and bellying up to the bail-out window with appraisers running scared because of the threat of 20 hours more of school if that U/G’s boss does not agree with value, even though that Underwriters boss is NOT an appraiser in the first place. Usually a guy with an ivy league accounting degree who knows someone who has that decision making authority! So hit them with substantial facts to get the pessimist away. Simon Faris http://www.visitsimonsays.com

  42. As an appraiser for 25 years, I do not feel that this was even remotely protrayed as accurate. This agent clearly has never seen an appraisal or even done a CMA herself and does not know what is in an appraisal. But I have a solution for all of you realtors who think that any appraiser low balled the apparaisal . Come work with me for a day and for the same fee and see if you still think we do not know what we are doing. Good Appraisers can not do their job with out good Realtor’s. In most cases we use mls data which is supplied by agents on their sales listings, we verifiy them with a party that is involved in the transaction and if it is not correct we are going to provide incorrect data. Garbage in garbage out.

  43. Steve

    As both a Mortgage and RE Broker, I see this on a daily basis. Is the story enhanced for the public…sure. Is it the appraisers fault..No. Can you get it resolved…sure, eventually, but at the cost of time (which is money) to the RE Agent. Whose fault is it? It is the greedy banks who created the AMC companies as a way to profit from and to comply with the HVCC agreement. The AMC’s hire the cheapest appraiser often using a “bid” system with no regard for the appraiser’s qualification or location. The Appraiser gets a fraction of what they use to get and therefore, does not feel like doing any follow up work (and I can’t blame them), how would you feel if the Gov’t stepped in and told you that after years of building up your small business you now need to sell it to a Bank and make 1/3 of what you use to? The bottom line is the the appraisers who didn’t take the pay cut are out of business because they didn’t act fast enough to get on the AMC lists. I have a friend who is a Certified Appraiser in my area with 10 years of experience and she cannot get added to any of the AMC lists, yet the appraisers assigned to my deals are from two counties away and don’t know the area. The odd part about all of this is that it was created to protect the Consumer, yet it is the CONSUMER that suffers the most.
    1) They get delayed in their transaction which further puts the buyers and sellers life on hold.
    2) The buyer may have to pay for two appraisals if a new lender is obtained in an attempt to close the deal under the agreed upon terms.
    3)The Seller (also a consumer) gets less than an agreed upon price in some instances which may effect his credit if the transaction becomes a short sale.
    4) The neighbor’s home value may be effected if the sales price is reduced to reflect the lower appraised value (if the RE agent opts not to fight for the value and gets the seller to accept the lower sales price).

    It is a very poor system for all involved….except the Banks who gain control over values and collect additional fees.

  44. Tim In Fla

    FOX…….I think that says it all in regards to the reporting/video. There are facts then there is FOX.

    Lenders dictate the the nature of assignment and scope of work in the letter of engagement. The appraiser has little sway in the assignment. Sales people need to be aware of what constitutes a valid appraisal in the lenders eyes. Its most likely not the comparables that support the contract price but more likely the most similar given the nature of assignment. You cannot argue or blame the appraiser for completing a valuation assignment under the conditions set by the lender. You can take up your issue with the lender or use the other acceptable option which is to PAY CASH. The definition of “market value” is typically located in the “Statement of Limiting Conditions” page of the FNMA/FHLMC appraisal report, form 1004. Market Value is described as in “cash” or “cash equivalent” terms.

    FYI….lenders do not typically use anything “living” as collateral for a 30 year mortgage note. Landscaping will die off, trees get hit by lightening, shrubs freeze, etc.

    Everyone want a healthy real estaste market back but the reality is we didn’t get here overnight and the problems were so overwhelming that it nearing took our whole financial system down. It took a decade to recover from the Great Depression and homes values saw a 25% decline before recovery. We have already surpassed that so its pretty easy to do the math here. Its gonna be awhile folks, a long while.

  45. harvey marco

    heh truth hurts i guess.

  46. Mille

    Don Haynes doesn’t know what he’s talking about. There most certainly IS such a thing as “Legal Non-Conforming” — (please God, tell me Don’s not out there representing himself as an appraiser). Don’t take my word for it; google “URAR” appraisal form and see it for yourself under the “Site” section of the FANNIE MAE standard appraisal form.

  47. One of the biggest problems is what the Realtors place in the MLS. So much information is incorrect or exaggerated! Not all the problems are with the appraisers!

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