Comments on: 8 Tips for Raising Your Home Appraisal

By: letsort

letsort — Tue, 02 Oct 2012 17:36:41 +0000

I have been an appraiser for over 27 years and this article sounds like it was written by a realtor not someone associated with an appraisal consulting firm. None of the 8 points are valid in regards to appraising; how on earth did this garbage of an article like this get printed?????

By: NY Appraiser

NY Appraiser — Wed, 26 Sep 2012 16:56:48 +0000

To Mr. Customhomebuilder…… Just cause someone bids on your property, it does not make that property worth that amount, unless they are paying cash and that’s rare. Your clients(buyers) can bid all day any amount they want….it means nothing if you have to get a loan. The bank could care less about your sales price. Banks know you work on comission and it’s in your best interest to get the most you can for the property. This is why appraisals are ordered. It’s kind of foolish to think the home your selling is worth said amount just cause someone bid on it, yet they have to get a loan. The buyer is not the owner, the bank is…..and the bank wants an unbias opinion…

By: Charles Malley

Charles Malley — Wed, 26 Sep 2012 16:44:57 +0000

Yes I did get the loan. That is NOT the point. The point is that an unqualified appraiser is out their and will be causing problems for future unsuspecting home owners. I would like to improve upon the process, not just use it.

By: thats enough

thats enough — Wed, 26 Sep 2012 16:28:06 +0000

You got your loan, didn’t you Charles Malley? Yet you are crying like a Packers fan.

By: Charles Malley

Charles Malley — Wed, 26 Sep 2012 15:57:14 +0000

In the aftermath of the housing bubble, much was documented reflecting how the actions of mortgage brokers and appraisers fueled the problem. No major indictments or arrests have been made, and the only significant procedural change was adoption of The Home Valuation Code of Conduct which bans lenders and brokers from pressuring appraisers on loans eligible for purchase by Fannie and Freddie. So does that mean the Real Estate Appraisal Process now stands on solid ground worthy of the trust of average homeowners? If my recent experience in refinancing my home mortgage is an indicator, the answer is a solid NO!
It turns out that the appraisal done for that refinancing came back very low based upon my reading of recent neighborhood sales and other factors. I appealed to the lender with a list of specific issues, including for example the use of a comparable sale that was actually a sheriff sale, and not making any adjustments. In the end, the appraiser came back standing their ground and not adjusting. I therefore shopped around with other lenders and had two more appraisals performed. The two subsequent appraisals came in less than one per-cent apart from each other, and almost a third higher than the appraisal in dispute!
So I filed a complaint with the Licensing Board in the Pennsylvania State AG’s office. They “reviewed for compliance with the Uniform Standards of Professional Appraisal Practice” (USPAP) and found “that the circumstances in this case do not permit formal prosecution” and closed the matter.
So I reviewed the USPAP. I found at least two rules that were violated:
Rule 1-1 (c) – not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results.
This USPAP Rule was violated because of the grossly inconsistent valuation relative to two other appraisals as well as other valuations, and was driven by the multiple issues I raised.
and
Rule 2-1 Each written or oral real property appraisal report must: (a) clearly and accurately set forth the appraisal in a manner that will not be misleading; (b) contain sufficient information to enable the intended users of the appraisal to understand the report properly; and (c) clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.
This USPAP Rule was violated because the appraisal did not clearly and accurately provide sufficient information to reconcile its’ comparable sales range of a price from $376,000 to $490,000 and the appraisals own finding that “PREDOMINANT MARKET VALUES FOR SINGLE FAMILY HOMES IN THE SUBJECT’S GENERAL MARKETING AREA RANGE BETWEEN $546,000 AND $556,000!
My next step was to get support for my understanding of these USPAP Rules by going to the source, the Appraisal Foundation – Authorized by Congress as the Source of Appraisal Standards and Appraiser Qualifications. Their response was “We’re sorry, but we are prohibited from evaluating an appraisal for USPAP compliance; that is the exclusive purview of the state appraiser regulatory agencies. However, if you believe your state appraiser regulatory did not adequately address your complaint, you may consider contacting the Appraisal Subcommittee (ASC), which is the federal agency responsible for the oversight of the various state appraiser regulatory agencies.”
So, on to the Appraisal Subcommittee I went. I was told that the ASC does not have responsibility for the decisions of the PA Licensing Board of Appraisers on a case by case basis, but rather only its’ overall program performance. However, they did provide me the contacts within the Pennsylvania system who may be able to address the specifics of the case that I described, given the licensing board’s decision not to take action without addressing any of the specific issues I raised.

So what are the primary findings about residential appraisals?

1. Responsibility for the Rules defining the Appraisal Process, oversight of the effectiveness of the rules, interpretation of the rules and fact gathering about specific appraisal cases are spread across several government and quasi government bureaucracies.
2. Although being responsible for program oversight, the ASC seems to lack basic understanding of the specific processes or the appropriate contacts within their supervision.
3. Despite being initiated by my action (a refinance) and pertaining solely to my property, the findings of the State Prosecutor’s Office are shrouded in a veil of secrecy with no responsibility to respond to specific questions or issues, apparently in direct opposition to PA’s Right to Know Act.
4. “Judgement Calls” are allowed to be made, but are not required to be substantiated even if those “Judgements” affect the ultimate rights of the citizen.
5. None of the players appear concerned that ultimately they are supporting a process that allowed for a Licensed Appraiser to prepare an appraisal that was one-third below two other Licensed Appraisals, as well as other valuations (assessment data, on-line valuation sites, construction value, etc.).
6. When faced with an appeal including specific allegations, Reviewer’s can point to regulations (USPAP) to support their findings, but are not obligated to defend those decisions even in the face of specific apparent conflicts or misinterpretations.

Given that traditional financing has a twenty per cent equity buffer, an understatement of valuation by an appraisal by another thirty per cent results in homeowner needing fifty per cent equity in the worse case, to finance their home. Don’t homeowners deserve better?

By: Terri Davidson

Terri Davidson — Wed, 26 Sep 2012 15:53:06 +0000

Can I just say I could respond to this article till I couldn’t type anymore as a Certified Appraiser for 15 years I see one and only one comment that was remotely relevant to this industry. Make sure things work. Yes I do take off or require you to fix it if your faucet falls off in my hand or leaks when I go to check your water for an inspection, I am not watching TV with you, it isn’t Real Estate and I could care less and if you think I am calling your kitchen remodeled because you put in a new faucet with your green and gold appliances from 1965 you will be mighty upset at the end of the day.

By: 32yrs appr

32yrs appr — Wed, 26 Sep 2012 15:02:20 +0000

glad to see many others feel the same as i do. will abc world news give equal time to appraisers that actually know what they are talking about? all the years and thousands of reports i have completed, not once “hacked” a value.

By: BayAppraiser

BayAppraiser — Wed, 26 Sep 2012 04:16:09 +0000

What a grossly irresponsible news segment. Two appraisers have a difference of opinion and some reporter thinks they are Colombo and solved one of the world’s greatest mysteries. . . . .

Let me say that a >10% variance between two appraisers is on the high side for a simple property – that is until you understand that most banks hire the least costly (read: least competent) appraiser available to fatten up their bottom line (gouge the borrower for $400-500 and pay the appraiser $200-250). If the lender were to hire competent and qualified professionals, the gap would be narrower. Not that all appraisers who do lender work aren’t qualified professional but if you do, by chance get one it was because of the personal integrity of that individual, not because of the lender’s vetting process . . . And finally, in response to the ‘news’ segment, no, the personal possessions of the owner should never play a role in a real property appraisal.

By: John Shanley

John Shanley — Wed, 26 Sep 2012 04:01:00 +0000

I have been appraising for 28 years. It is hard to believe that Ms. Palmisano is affiliated with an appraisal office; I assume she is not a licensed appraiser since she sounds more like an interior decorator. I would also like to know if the appraiser at the end of the story was from her office, which would be a bit of a conflict, or if he knew what role he was playing in this story. We also don’t know if the first appraiser knew what he was doing, he may have been incompetent. With the changes in the lending industry over the past five years, you stand a much better chance of having an appraiser sent to your home by an appraisal management company who has never even been to your town before. At least once a week I have a conversation with someone from a management company who does not care if the job they are trying to assign to an appraiser (ANY appraiser) is going to be handled with an appropriate level of expertise.
The items in this story were by and large not appraisal issues, but decorating issues. An untrimmed bush might put off a potential buyer, but they have zero impact on value. Replacing a faucet in a dated kitchen is not considered an update. A competent appraiser should be able to see past household clutter. No one cares what kind of tv you have; it is personal property that is most likely moving out with the seller. We look in your closets, we don’t need signs pointing out your favorite closet.
The difference in these appraisals was not due to these “helpful hints”, it was due to one or both of these appraisers not being very good at their job.
And finally, the only accurate part of this piece was the assumption on the part of the reporter and homeowners was that if there are two appraisals with different values, that the one that comes in higher is the correct one. Because I never get a call from someone complaining that there is a problem with an appraisal I did because it is higher than the other appraisal that was done before, I only seem to be wrong if my number is lower than what they were hoping for.
It was nice that you worked Barbara Corcoaran in so that you could have a free promo for Shark Tank, but maybe she needs to stick to investing in cookie companies and arguing with Mr. Wonderful.
This piece was misleading. You want your house value to increase? Move it to a better neighborhood.

By: NJ Certified

NJ Certified — Wed, 26 Sep 2012 03:50:53 +0000

I see my fellow qualified appraisers have pointed out the absurd statements in this piece. It should probably have been done with a real estate salesperson as the expert pointing out why the house was getting no offers – obviously more of a showing condition than a value issue. In regard to the change in appraised value well we were never given the time span between the two appraisals.