# APPRAISALS ! What are you seeing ?



## katy (Feb 15, 2010)

We started a refinance effort, only to have a serious slap in th face, from the LOW appraisal, which is 30 % below the starting point. This is NOT an area that has been affected by mc-mansions. This has a very serious bearing on the cash-out, which we wanted for home improvements. Now the finance company says they will credit us at closing for the appraisal fee (which feels like used car tactics). 

Sooooo, I have spent a day or two researching. What I seem to see is that AMC's have been created as a go-between, functioning as a clearing center for appraisers and liason for finance companies. Much to-do about loan agents nor clients allowed to talk to appraisers. 

Having a bad time trying to decide whether to go forward with this or switch to another finance company, which eats up time, and they like to remind that interest rates are climbing.

Any experience to share ?


----------



## oregon woodsmok (Dec 19, 2010)

If you've found a company that will do a cash out refinance in this economic climate, you are doing better than the rest of us. I did a refinance to drop my interest rate. I am really happy with how that went, but they told me right up front, that they wouldn't do any cash out.

My son is doing a refinance right now and he has checked with several places. They are all saying that they don't do cash out refinancing. Most of them will not combine the first and second and will only refinance the first. Not one of them will do a refinance on a manufactured home.

Instead of starting over, you could run out and talk to several banks and see if they offer anything better. I wouldn't count on getting a higher appraisal. Foreclosure sales have ruined comps for everybody. If you can't find anyone promising better terms, then I suggest you stick with the bank that you are going through right now and get it finished.

Because, yes, interest rates have started back up.


----------



## Joshie (Dec 8, 2008)

I don't think McMansions have anything to do with lower appraisals. I think it'll take a long time for the market to improve. Our houses are only worth what somebody will pay for them. Appraisers base a house's worth upon what's sold in the last six months a certain distance from your house. That makes it especially difficult for those of us who live in the boonies.


----------



## SteveD(TX) (May 14, 2002)

I have no idea what McMansions have to do with anything either. Yes, cash-out financing is harder to obtain. You might want to consider a HELOC instead, esp. if the cost of new improvements can be paid off sooner.

How are you sure that the appraisal is too low? Do you have access to recent comparable sales and have you done your own analysis and comparison? If so, on what did you base your adjustments?


----------



## quietintheland (Jan 10, 2013)

Appraisals on my property (rural, located between two large cities in the lower midwest) have seen a steady decline over the past 5 years as well. When we refinanced a few months back, the house appraisal came back with the lowest dollar amount we have seen in five years (we've had 3 appraisals during that time - 1 for the original purchase and 2 for refinancing). CMA's from local real estate agents have even been consistently about 5% lower than those done by the professional appraisers. "They" say the real estate market is improving. And it may very well be in certain areas. But not around here, at least for improved property. Unimproved land seems to have held it's price pretty well, there have even been recent articles showing that farm land in parts of the midwest US is selling at a 10 year high.

Anyway, like the other posters, I don't believe "McMansions" have anything to do it. But the flood of foreclosures still on the market does.

QuietInTheLand


----------



## LittleRedHen (Apr 26, 2006)

You can get a home equity loan based on your equity

Anyways we looked into one and was approved for it but then we backed out :/ Anyways I just got the appraisal in the mail yesterday and it put our house at only 70K! 11 years ago when we built the house it was appraised at 105K. Since then we have put up extra buildings, concrete sidewalks, a type of barn (but not a barn... but hard to explain) put in a driveway with good gravel etc... planted an orchard.. In other words put in a lot of sweat equity. Then what we do get 11 years later? only 70K! it was hard on my poor heart lol. Anyways the brightside? i will take that appraisal with me when we have our township meeting for our property tax assessments and tell them to knock my property taxes down. They are taxing us as if our place was worth 90K so it should save us a few bucks and pay for the cost of the appraisal. I am thankful I am not trying to sell my house because I would be weeping. No way i'd sell at this price.


----------



## LittleRedHen (Apr 26, 2006)

btw the flood of foreclosures are a lot to do with my low values. I read the report- 3 out of the 4 comparisons were foreclosures. the 4th was a house that is being sold low as they are trying to get out before they foreclose. we live close to Lake Michigan but yet this area was hit hard in the job market so a lot of people lost their homes. My county doesn't have any industry so most people commute (its a lot of farm land) I don't expect my land values to go above 2001 values for perhaps another 10 yrs!!


----------



## wharton (Oct 9, 2011)

LittleRedHen said:


> btw the flood of foreclosures are a lot to do with my low values. I read the report- 3 out of the 4 comparisons were foreclosures. the 4th was a house that is being sold low as they are trying to get out before they foreclose. we live close to Lake Michigan but yet this area was hit hard in the job market so a lot of people lost their homes. My county doesn't have any industry so most people commute (its a lot of farm land) I don't expect my land values to go above 2001 values for perhaps another 10 yrs!!


I could be wrong, but several times lately I have heard from local R.E pros about this issue, and how it is NOT acceptable to use distressed properties for comps. It's pretty sound logic. Using forclosures, REOs, and short sales for comps. in a hard hit area, can start a death spiral in local values.

I live in a rural area, 100 miles from NYC, and the retreat of the "super-commuter" has basically destroyed values here. There is zero demand for land, and homes are worth a fraction of their peak values. The banks are working quietly here to delay foreclosures as long as possible to avoid the death spiral. After you stop paying, they pretty much ignore you for at least two to three years, as long as you pay the taxes and insurance. Then they start a very slow process of forclosure and eviction. A family living across the street got into trouble early in the crash. They paid their last regular payment on 4/08. they abandoned the property in september of 2011. The bank recently secured the doors and winterized the place. It's almost five years now, and the bank still does not show it to be a distressed property.

In your case, I would think that your tax authorities may be quite unwilling to accept a value on your home based on local foreclosures. Not only is it a bad move for the banks and Fannie and Freddie to head down that road. Local taxing juristictions are getting hammered already, and lowering values to reflect distressed sale prices would be a disaster. 

You might want to get a local realtor to do a CMA based on recently sold properties that were not distressed sales. It may not be a genuine appraisal, but at least you can be a little more comfortable knowing that your home hasn't lost value as you put all of your cash and hard work into it? Good luck.


----------



## SteveD(TX) (May 14, 2002)

wharton said:


> I could be wrong, but several times lately I have heard from local R.E pros about this issue, and how it is NOT acceptable to use distressed properties for comps. It's pretty sound logic. Using forclosures, REOs, and short sales for comps. in a hard hit area, can start a death spiral in local values.
> 
> ...


You heard wrong, unless foreclosures are the exception to the rule and they haven't measurably impacted market values. Appraisals don't start the death spiral, the market does. And the lender pays good money to find out exactly what the market is telling them, and not for the appraiser to paint a rosy picture.


----------



## wharton (Oct 9, 2011)

SteveD(TX) said:


> You heard wrong, unless foreclosures are the exception to the rule and they haven't measurably impacted market values. Appraisals don't start the death spiral, the market does. And the lender pays good money to find out exactly what the market is telling them, and not for the appraiser to paint a rosy picture.


Sorry, but I live in one of the foreclosure hotspots of the US, and foreclosures can, and will collapse a market, if allowed to. you are incorrect that appraisals "don't start a death spiral". one of the severe issues that our local market had to address was the change in the appraisal model to the "arm's length" relationship currently employed. Appraisers started showing up from outside the region with no local knowledge, and occasionally no idea how to even get to the property they were assigned to. This lead to huge problems in the market and months were significant percentages of deals fell through due to sale prices not meeting the appraisal. It took the effort of a lot of local agencies contacting lenders and getting appraisers to do their job.That being, locating non-distressed comps, inside the market area, and properly pricing the product. 

Obviously, the bank is not interested in anything but current market value. Any competent player in the market is also aware that comping a property using nothing but distressed properties is not only going to not provide a true market value, bit it will also do needless damage to the seller and the marketplace. 

BTW, I build and sell spec. homes in a very distressed market. In moving millions of dollars worth of homes since the collapse, I have never had an issue with an appraisal, and NEVER had a distressed comp. show up on an appraisal of one of my properties. Given that the local market has hundreds of distressed properties available for use as comps. I think it's pretty fair to say that it isn't standard practice in this region. As for any appraiser "painting a rosy picture", I only faintly remember those good old days, here in the trenches, that's no longer an issue.


----------



## Dutchie (Mar 14, 2003)

wharton said:


> Sorry, but I live in one of the foreclosure hotspots of the US, and foreclosures can, and will collapse a market, if allowed to. you are incorrect that appraisals "don't start a death spiral". one of the severe issues that our local market had to address was the change in the appraisal model to the "arm's length" relationship currently employed. Appraisers started showing up from outside the region with no local knowledge, and occasionally no idea how to even get to the property they were assigned to. This lead to huge problems in the market and months were significant percentages of deals fell through due to sale prices not meeting the appraisal. It took the effort of a lot of local agencies contacting lenders and getting appraisers to do their job.That being, locating non-distressed comps, inside the market area, and properly pricing the product.
> 
> Obviously, the bank is not interested in anything but current market value. Any competent player in the market is also aware that comping a property using nothing but distressed properties is not only going to not provide a true market value, bit it will also do needless damage to the seller and the marketplace.
> 
> BTW, I build and sell spec. homes in a very distressed market. In moving millions of dollars worth of homes since the collapse, I have never had an issue with an appraisal, and NEVER had a distressed comp. show up on an appraisal of one of my properties. Given that the local market has hundreds of distressed properties available for use as comps. I think it's pretty fair to say that it isn't standard practice in this region. As for any appraiser "painting a rosy picture", I only faintly remember those good old days, here in the trenches, that's no longer an issue.


You are mixing two issues.

The use of foreclosures as Comparable Sales already was addressed by Steve who, like myself, is a real estate appraiser (he with many more years experience than I do).

The issue of appraisers coming from outside the immediate areas is another issue.

Location of the property vs the appraiser has nothing to do with the appraiser's knowledge of the local market and everything to do with competence. 

By law, if an appraiser is not geographically competent, he/she either must advise his/her client and explain HOW he/she plans to become geographically competent OR decline the assignment.
It is not difficult to become familiar with a particular market. All it takes is time and a desire/ability to do extra research, talk to local realtors and, for example, to the Chamber of Commerce.

Chances are that an appraiser who doesn't take the time to do that won't do it in his/her own neck of the woods either.


----------



## Evons hubby (Oct 3, 2005)

quietintheland said:


> Anyway, like the other posters, I don't believe "McMansions" have anything to do it. But the flood of foreclosures still on the market does.
> 
> QuietInTheLand


Naw, the foreclosures still on the market have no impact whatsoever on an appraisal.... only those that have sold can affect appraisals. Thats coz appraisers only use recent sales for their comps.

A CMA (competitive market analysis) on the other hand, created by real estate brokers and agents, do use unsold foreclosures as well as recent sales in their figures when guesstimating potential sales prices. CMAs and appraisals are two entirely separate animals.


----------



## katheh (Jul 21, 2012)

A cash-out refinance is a terrible financial move. I am also disturbed by your use of the term "finance company." In any case, the only reason anyone should be refinancing in this economy is to obtain a lower interest rate. Home improvements should be saved for and done as can be afforded. Rolled into a "finance," the cost of improvements will almost never be realized upon resale. With a low appraisal, your "finance company" is telling you they don't consider any improvements you might make are worth betting their money on.

That said, a very common misconception is that people think their house should appraise for what they owe on it, or what they "need" to get for it, or what they paid for it, or some combo of the 3. None of those factors have anything to do with it.

People want high appraisals to cash out their equity, and low assessed values for the tax man. The dichotomy of man, LOL.

Appraisal mills are what helped the bubble along its death spiral - the standards of their industry have changed. Lenders are looking to limit their exposure and there is no law against an appraiser being conservative.


----------



## katheh (Jul 21, 2012)

Yvonne's hubby said:


> Naw, the foreclosures still on the market have no impact whatsoever on an appraisal.... only those that have sold can affect appraisals. Thats coz appraisers only use recent sales for their comps.




I can assure you if your subdivision is half empty or better, that will be reflected on the appraisal. Bank inventory or foreclosures in process aren't taken as comps, but empty homes (especially long-term empty) are a detraction.

Our neighborhood is more than 1/2 unoccupied and "values," such as they are, have been in a predictable, steady decline for 5-6 years.


----------



## wharton (Oct 9, 2011)

Dutchie said:


> You are mixing two issues.
> 
> The use of foreclosures as Comparable Sales already was addressed by Steve who, like myself, is a real estate appraiser (he with many more years experience than I do).
> 
> ...


Not mixing anything here. The issues is with garbage appraisals and the damage they cause. 

I seee no evidence of "Steve" addressing anything, other than making claims that directly contradict the reality of the market in my area. Since you are both professionals, how about a straight answer to the question. would it be acceptable for you to value a property based on three of your four chosen comps. being distressed properties? I can assure you that if you did that for me you wouldn't be getting paid. 

As for the claim that it all the fault of a few "geographically incompetent" appraisers, sorry but no. Another poster hit it dead on, it's called appraisal mills. Drop the fees drastically. Blame the issue on hard working, local, independent appraisers who were guilty of manipulating the market (total bull, but it makes a good sound bite if you are a lender, and lying your butt off to calm the stockholders) Then turn the work over to out of town appraisal mills, and make it quite clear that you are watching them, and they better not screw up. A recipe for disaster. At one point in our local market, it got so bad that brokers were wondering if there was a future in an market where 1/3 to 1/2 of the deals collapse strictly due to appraisals that were horribly wrong. the issue has largely corrected itself, but saying that it didn't or can't happen due to some mystical level of professionalism in the industry, please..........


----------



## wharton (Oct 9, 2011)

katheh said:


> I can assure you if your subdivision is half empty or better, that will be reflected on the appraisal. Bank inventory or foreclosures in process aren't taken as comps, but empty homes (especially long-term empty) are a detraction.
> 
> Our neighborhood is more than 1/2 unoccupied and "values," such as they are, have been in a predictable, steady decline for 5-6 years.


 Wow, you must live next door to me? It certainly is a sickening reality. We are racing to get our place freshened up with new paint, carpets, etc... and dump it for whatever we can, as the neighborhood continues to plummet. Sadly, we are all taking turns cutting the grass at a few of the surrounding abandoned homes. It a 20 year old subdivision full of nice middle class homes on acre lots. The families that are, or have failed all seemed to be those that bought not only at the height of the market, but also were not even remotely qualifed to buy their homes, if they had to adhere to any rational standards.


----------



## quietintheland (Jan 10, 2013)

Yvonne's hubby said:


> Naw, the foreclosures still on the market have no impact whatsoever on an appraisal.... only those that have sold can affect appraisals. Thats coz appraisers only use recent sales for their comps.
> 
> A CMA (competitive market analysis) on the other hand, created by real estate brokers and agents, do use unsold foreclosures as well as recent sales in their figures when guesstimating potential sales prices. CMAs and appraisals are two entirely separate animals.


Hi Yvonne's hubby,

I'm afraid I was somewhat ambiguous in my original response. You are correct that foreclosures "still on the market" do not have a direct bearing on the appraisal. However, foreclosures and short sales that have sold do, and can be used as comps. Foreclosures around here typically sell for 50 cents on the dollar compared non-foreclosed homes. 

On the appraisal report (at least on every appraisal I've received in our state), there is an area where the appraiser can make general notes about the area or region, and this includes trends in real estate values, the available stock on the market, the estimated days to sell a house, unemployment rates, and a general market outlook. I don't know how much these details affect the final appraisal price, or if they are even factored in at all. Perhaps one of the resident appraisers on this forum can clarify.

QuietInTheLand


----------



## SteveD(TX) (May 14, 2002)

wharton said:


> Not mixing anything here. The issues is with garbage appraisals and the damage they cause.
> 
> I seee no evidence of "Steve" addressing anything, other than making claims that directly contradict the reality of the market in my area. Since you are both professionals, how about a straight answer to the question. would it be acceptable for you to value a property based on three of your four chosen comps. being distressed properties? I can assure you that if you did that for me you wouldn't be getting paid.
> 
> As for the claim that it all the fault of a few "geographically incompetent" appraisers, sorry but no. Another poster hit it dead on, it's called appraisal mills. Drop the fees drastically. Blame the issue on hard working, local, independent appraisers who were guilty of manipulating the market (total bull, but it makes a good sound bite if you are a lender, and lying your butt off to calm the stockholders) Then turn the work over to out of town appraisal mills, and make it quite clear that you are watching them, and they better not screw up. A recipe for disaster. At one point in our local market, it got so bad that brokers were wondering if there was a future in an market where 1/3 to 1/2 of the deals collapse strictly due to appraisals that were horribly wrong. the issue has largely corrected itself, but saying that it didn't or can't happen due to some mystical level of professionalism in the industry, please..........



I find your posts typically reflect the views of a property owner, even sometimes a real estate agent, who doesn't have a clue as to what drives the market, and what standards appraisers are required by law to adhere to.


----------



## Joshie (Dec 8, 2008)

I am no appraiser, wharton, but I can tell you that I wouldn't buy a house in an area with a lot of foreclosures. If I absolutely fell in love with a place and decided to purchase it anyway, I would only offer cents on the dollar. Why would I buy your place when I can get the house next door for 25% or even 50% less than the cost of yours? Foreclosures should, and do, influence house prices.


----------



## SteveD(TX) (May 14, 2002)

Yvonne's hubby said:


> Naw, the foreclosures still on the market have no impact whatsoever on an appraisal.... only those that have sold can affect appraisals. Thats coz appraisers only use recent sales for their comps.
> 
> A CMA (competitive market analysis) on the other hand, created by real estate brokers and agents, do use unsold foreclosures as well as recent sales in their figures when guesstimating potential sales prices. CMAs and appraisals are two entirely separate animals.



"only those that have sold can affect appraisals"???

Wrong. Unsold foreclosures available on the market can and do impact an appraisal, and appraisers are required to discuss such listings or offerings when they do.


----------



## NorthCountryWd (Oct 17, 2008)

You don't have to be an appraiser (even tho I am) to realize distressed sales impact market value whether they are used as comparable sales or not. 

If you have 2 model matched homes next door to each other and 1 is selling for 20% less, which is a buyer going to look at first? 
Most would look at the cheaper option. 
Now lets say the cheaper option (distressed sale) is ruled out for one reason or another.....is that buyer going to offer full price on the fair market sale next door?
Probably not....there's a distressed sale right next door!

See how it works? Until the distressed inventory is absorbed and REO properties drop to a more balanced percentage of the entire market, they will have an impact on market value.

For full disclosure, the distressed sale inventory has been relatively low in my area outside of a few towns during this whole recession. Most of the towns that had higher inventory have rebounded.


----------



## wharton (Oct 9, 2011)

SteveD(TX) said:


> I find your posts typically reflect the views of a property owner, even sometimes a real estate agent, who doesn't have a clue as to what drives the market, and what standards appraisers are required by law to adhere to.


Now that's funny, and I don't care who you are. "Don't have a clue as to what drives the market." You must be right, I'm one of the last builders still standing in my market, have made money in every year of our current decline, and will be retiring by the end of the year, at 50 Y.O. In the last four years I haven't had a SPEC. house last more than ten weeks on the market, and right now I can sell as many as I choose to build. Yep, you really have this one dialed in. I'm clueless, no idea at all how the real estate market works, never been tripped up by a clueless incompetent appraiser, and I wouldn't be anywhere without the tremendious value that my friendly neighborhood appraiser brings to "the market". 

As to your comment about, "what appraiser are required........" Sounds great on paper, out here in the real world that pile of bovine discharge doesn't float. I've seen too many deals head for the trash due to appraisals that were grossly incompetent. doubtful that they broke any laws by not having a clue as to how to do a competent appraisal, but the damage can be tough to undo. BTW, I guess you are still electing to pass on answering my question?


----------



## SteveD(TX) (May 14, 2002)

wharton said:


> Now that's funny, and I don't care who you are. "Don't have a clue as to what drives the market." You must be right, I'm one of the last builders still standing in my market, have made money in every year of our current decline, and will be retiring by the end of the year, at 50 Y.O. In the last four years I haven't had a SPEC. house last more than ten weeks on the market, and right now I can sell as many as I choose to build. Yep, you really have this one dialed in. I'm clueless, no idea at all how the real estate market works, never been tripped up by a clueless incompetent appraiser, and I wouldn't be anywhere without the tremendious value that my friendly neighborhood appraiser brings to "the market".
> 
> As to your comment about, "what appraiser are required........" Sounds great on paper, out here in the real world that pile of bovine discharge doesn't float. I've seen too many deals head for the trash due to appraisals that were grossly incompetent. doubtful that they broke any laws by not having a clue as to how to do a competent appraisal, but the damage can be tough to undo. BTW, I guess you are still electing to pass on answering my question?


We are all so proud of you for being such a successful builder! Despite the fact that you blame the appraisers for reporting facts and creating death "spirals". Good grief man you need to get over yourself and wake up to the real world. I saw no question from you that deserved an answer, since common sense dictated otherwise.

Are some appraisers and appraisals incompetent? Of course. But your suggestion that distressed sales should not be considered by appraisers was patently false and would be a violation of appraiser standards, which by the way have been adopted by every regulatory agency as law. You're making yourself look a bit silly here, especially to people who make their living at real estate and have any basic knowledge of how markets function.


----------



## wharton (Oct 9, 2011)

SteveD(TX) said:


> We are all so proud of you for being such a successful builder! Despite the fact that you blame the appraisers for reporting facts and creating death "spirals". Good grief man you need to get over yourself and wake up to the real world. I saw no question from you that deserved an answer, since common sense dictated otherwise.
> 
> Are some appraisers and appraisals incompetent? Of course. But your suggestion that distressed sales should not be considered by appraisers was patently false and would be a violation of appraiser standards, which by the way have been adopted by every regulatory agency as law. You're making yourself look a bit silly here, especially to people who make their living at real estate and have any basic knowledge of how markets function.


 
Get over myself? Seriously? I ask a simple question, "would you find it acceptable to use foreclosures for three out of four comps. on your appraisal" and you are apparently unwilling to answer? Why? As for the real world and appraisers reporting the facts, I guess having one stop at my realtor's office to ask how to get home from the area, and not being familiar with even the major nearby highways, in an area that they are supposed to be 'geographically competent" in, shouldn't be a concern, eh? Using comps. that have nothing to do with the local market area shouldn't be a concern? Having a appraiser list 'additional acreage" on the property as having no significant value, isn't a big issue, eh? It was a ten acre horse property, deal blown apart, nobody in the local industry can figure out what planet this appraiser was from, but it'a all good Steve, because you can tell me, from half a continent away that I'm clueless, right? I don't blame anybody for reporting facts, I have huge issues with underpaid, incompetent appraisers who work for appraisal mills, and stumble around an already damaged rural area, without a clue. I work real hard to steer my clients to local banks who have skin it the game, and expect competent, accurate work from their appraisers. Oddly enough I never have issues with local banks, and appraisers that are from the region. Since you are all knowing, maybe you can tell me why that isn't the case when BOA sends somebody from another state, that would end up dying, stranded down a logging road, if their GPS quit as they were trying to get home? Sorry, I'm just lacking in enough "basic knowledge" to be worthy of your greatness. I appreciate your congradulations on being a sucerssful builder. There were hundreds more of us in the region in 2006, now most are gone. I guess retiring a few decades early, selling millions in spec. houses right through this depression, and having a nice nut in the bank pretty much proves that I'm clueless, right Steve?


----------



## SteveD(TX) (May 14, 2002)

Finally found your "question" and but here's my answer:

Sometimes. There are certain circumstances in certain markets where it would indeed be proper to use foreclosure sales (sales of homes sold by a lender who had gained title via foreclosure) as 3 of the 4 comps in the appraisal. It would be irresponsible of the appraiser NOT to do this if the market dictates that he/she do so. And no, you are probably not the arbiter of the situation since your knowledge of appraisal theory and laws are obviously lacking. Your statements indicating what appraisers should and should not be able to do are evidence of that. And blaming appraisals for the decline in the market is like blaming a guns for killing people or a spoon for making people fat. And you should be aware that refusing to pay an appraiser if you don't like what the appraisal says is against the law. You really do need to research this stuff a bit before trying to come off as such an expert.

And while I am so proud that you are a shining beacon in the building industry, able to prosper while all others are failing, etc.. Oh and I am also happy for you that you have a nut.


----------



## wharton (Oct 9, 2011)

SteveD(TX) said:


> Finally found your "question" and but here's my answer:
> 
> Sometimes. There are certain circumstances in certain markets where it would indeed be proper to use foreclosure sales (sales of homes sold by a lender who had gained title via foreclosure) as 3 of the 4 comps in the appraisal. It would be irresponsible of the appraiser NOT to do this if the market dictates that he/she do so. And no, you are probably not the arbiter of the situation since your knowledge of appraisal theory and laws are obviously lacking. Your statements indicating what appraisers should and should not be able to do are evidence of that. And blaming appraisals for the decline in the market is like blaming a guns for killing people or a spoon for making people fat. And you should be aware that refusing to pay an appraiser if you don't like what the appraisal says is against the law. You really do need to research this stuff a bit before trying to come off as such an expert.
> 
> And while I am so proud that you are a shining beacon in the building industry, able to prosper while all others are failing, etc.. Oh and I am also happy for you that you have a nut.


Steve, it may be valuable to reread your posts before you decide to continue smashing me with your condecending attitute. Assuming you are a professional, you clearly fail to hold yourself up as one in this venue. 

First, I am not an expert appraiser, and have no interest in being one. You, on the other hand, are not an expert on my local market area, and your dismissal of everything I have reported regarding appraiser incompetence is a bit curious, give that you are thousands of miles away.

My comments about my sucess are for a specific reason. You dismissed me as thinking like a "homeowner or realtor" . Give that some though, if you would? First, by being dismissive of homeowners and realtors, you pretty much elevated yourself as being superior to most members who populate this forum. Second, without homeowners and realtors, you would be looking for a job. 

My success was noted as I find it ironic that you waste a lot of time attempting to dismiss me as a clueless idiot , when there is a mountain of evidence to the contrary. Since the start of the collapse, I was repeatedly counseled by the "experts" that I was a fool to continue in this market, as I would end up like most of my competitors. Funny how many experts there are out there? Now you, the appraisal expert, have decided that you can dismiss all my recent experience with incompetent appraisers, as I am clueless, and what I report is against the law. Doesn't matter if it had an extremely damaging effect on our local market, or my wallet, as far as you are concerned, it didn't happen. 

Finally, Once again, your most recent post has another claim about "the law" and how it effects something that I had to do in the past, which in your expert opinion is illegal. Sorry, Steve, but I have sucessfully denied an appraiser his fee for providing incompetent and damaging work. The case involved a beautiful new ranch in a decent area. The immediate market was flush with comps. as there are many retirees in the market that have similar, quality homes. In this case, the appraisal came back suspiciously low, and significantly below the CMA I had. It turned out that one of the three comps. pulled the numbers down drastically, not enough to kill the deal, but it was damaging. The first clue was that the pic. showed no grass in the front yard, and a husky chained to a wreckage of what once appeared to be a dog house, in front of the door. A quick review determined that, inexplicably, the appraiser left the market area, went to an adjoining county, found a horrendous ranch house in a dying mining town, and decided to use it. I told the bank that his work was unacceptable, and that I would pospone the deal until they hired a competent appraiser. They agreed, the work was refused, and a proper appraisal was done. 

Steve, this is really all about real world experience after three decades in the game VS. you determination of how my world works, as seen from thousands of miles away. I'm not an expert. I have done business with many high quality local appraisers, and agencies. I hav also seen the damage that incompetent, out of town clowns can do. If that doesn't suit you, well continue to point out how many ways that I am a idiot. It really has no bearing on the truth, or change my real world experience.

Good luck, I'm finished with this one. Seems a bit silly to resond to somebody who continually dismisses real world events that happened to local brokers, agents, appraisers and builders, in MY market during the last few years, and does so from half a continent away. bye.........


----------



## SteveD(TX) (May 14, 2002)

Wharton, for the record, I didn't say that the things you experience "didn't happen". I never called you an idiot. I have pointed out that you appear to have little knowledge of banking laws and appraisal rules and regulations. Appraisal independence laws have been adopted by federal regulatory agencies as law. Meaning that every bank, lender, mortgage company, and borrowers dealing with these institutions (which are federally regulated) must not refuse to pay an appraisal fee or threaten to withhold payment of a fee. Now you are welcome to turn the appraiser in to their local state appraisal licensing agency, or you can file suit to get your money back. But withholding payment or refusing payment is against the law. Period. Maybe you got away with it, but I'll say that I was speeding in my car the other day and didn't get caught either. Also, I'll say that it has been over 10 years since a borrower paid an appraisal fee to me directly, since this is also against federal statutes. They pay to the fee to the bank, the bank or an intermediary such as an appraisal management co. who in turn hires the appraiser and pays them the fee. They of course, know better than to withhold fees or threaten to. You also thought that appraisers should never consider foreclosures as comps when that just isn't the case. You being halfway across the country in a market I'm not familiar with has no bearing whatsoever, since my statements have been about appraisals in general, no matter where the property is located or what that particular market is experiencing.

Considering this lack of knowledge, coupled with your bragging about how successful you are as a builder and how much money you have, makes your whole story a bit suspicious.

I participate in the real estate forum to pass my knowledge on through as an expert in the field of appraisal and banking laws. As I have been qualified as and testified in state and federal courts as an expert witness many times over in these matters, most here take my opinions and statements as reliable. I've served as a consultant to various state and federal agencies who rely on my expertise. It bothers me that people come and post here talking about "what they've been told" and how they've broken a law (so it must be OK), etc., when these statements are misleading, in error, or flat out wrong. Members of this forum don't want here say or erroneous information.

This is also my last reply to this thread as further discussion with you is an obvious waste of time.


----------

