I turned in an appraisal today to an LO. The appraised value was $30,000 less than their "estimated" value which did not appear to be a real problem problem with him although he did question it. I think he knew it was out of line anyway but blamed it on the homeowner. When I told him to look at the market conditions section of the report where it said 49% of the transactions on MLS were bank owned and that it brings everyones values down he seemed to understand. He then called back a few hours later and left a message on my phone asking if I could remove the comment about the percentage of foreclosures because he's never seen an appraisal so detailed, it really wasn't necessary for me to make that comment, and his lender wouldn't do the loan because of it. I would like to tell this guy off but what I have in mind isn't very professional. Any suggestions?

Yeah, tell him that according to the new Georgia Appraisers Classification Act the analysis of foreclosures is required and that the appraiser is also required to note such discovery.

If they don't do the loan cause of that comment then you saved them 300k for $300.00. They should be in love with ya.

The truth is that if lenders really stopped doing loans because of the rate of foreclosures, there would be no more business in the Atlanta area.

Perhaps instead of a percentage, ask him if it would be better to say that nearly half of the sales were foreclosures. or maybe just say there was an abundance of foreclosures that appear to impacting the value.

OK Im kidding, Actually this was discussed before and I think the best comment I heard was that there was a high percentage of foreclosures and any impact on value was evident by the sales of the comparables...or something like that.

The truth is that they WANT YOU TO LIE and NOT tell the truth. The lender will not buy the loan because the area is CRAP.....NOT the appraisal.

You are all 100% correct. The LO/MtgC need for you to be misleading in the neighborhood section of the report if you are in a high foreclosure/high fraud area.

When the loan goes into foreclosure who files the complaint? As you go thru the process of either the investor wanting a repurchase or an investigation by the GREAB you, as the appraiser are left knowing there is no way you can defend your position. Recently on other threads people have posted they had been reviewed on properties in high fraud area's and were waiting for there day in court. Hopefully they covered the high foreclosure rates; levels of mortgage fraud and accruately reported the SF price range and the predominant value. If not,the prosecuting attorney will just harp on that issue.
If you did not realize the level of foreclosures your not competant; if you did your not credible.Your in a box.
Brian is in a tough situation. Tell it like it is and the deal is dead and you risk losing money. Lie and if the home goes into foreclosure that information will show up in the repurchase/complaint issue agaist you when filed.
Always keep in mind how you will defend what you do today in 2-3 years.

After reviewing some of the crap that has already gone through underwriting, I've come to believe that they dont actually read the words, just look at the numbers. So, if you were to actually type out "forty nine percent", they'd probably just skip right over it anyway- hehe.

Brian

In my 30+ years of doing this stuff I have found that the more detailed you are in your reports the more you are penalized by the lenders, with some exceptions of course.

Just last week I had a lender tell me I was just too slow. My response was, "No matter how long it takes me to do the appraisal it always takes longer to get paid".

I get to see a lot of other reports and I know why it takes me longer. The majority of the appraisals state that the legal description was not provided, the neighborhood data is generic and basically tells you nothing, lot dimensions usually states that the survey was not provided, sales histories are usually inaccurate and on and on. I dig all that up on my own. So hell yes it takes me longer.

I know I am not the best out there by a long shot but it chaps my ass to see my business going away when the playing field is not level. These are the same appraisers that can't do a report if you don't give them the sales price or loan amount to guide them. If you have two appraisals on a property it seems to be assumed by most everyone that the highest value is the correct one. How did we get to this point?

I have read it on this forum before but it is worth repeating: "If you are incompetent and unethical you will be rewarded in this business" (with exceptions of course). You say well for a short period of time they will be rewarded. Well I have seen some around for 10-15 years and they are still going at it. As those banker buddies of mine say, " We will take their reports as long as we don't keep the loans inhouse."

That is a hard statement to take when you are waiting for the phone to ring.

Thanks Burnt Out- "No matter how long it takes me to do the appraisal it always takes longer to get paid".
THats going on a t-shirt AND a hat!

What a great thread!!!!!

All of us should take to heart the information given by the above, ask questions and find out how to improve our work, and then improve or work. We have all lost clients because we don't accomodate them. Maybe we should think more of accomodating ourselves.

I try to keep in mind two statements when doing appraisals.

1. If it is worth doing, it is worth doing right.

2. Be above board and honest. Don't lie, cheat or steal.

Now I will have to add a third.

3. No matter how long it takes me to do the appraisal it always takes longer to get paid.

Thanks.

true, but should it take six months and still counting?

We're still trying to collect stuff from mid 2006.