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totati99, Home Owner in La Jolla, CA

Are consumers totally at the mercy of appraisers? How can this process be objective? Thank you!

Asked by totati99, La Jolla, CA Mon May 6, 2013

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6
It used to be that Appraisers would analyze and compound number to arrive at the best "VALUE" of the property.
Times change; just like a lot of things nowadayze>
The Appraiser's primary job is to protect the Lender from hurting themselves.

If you were a Lender, wouldn't you want some kind of protection: You do not have the time or the ability to travel from Maine to Albuquerque to personally evaluate every property that you are asked to lend on.

It is imperfect. Not everybody is going to agree with you.
But if you are going to be around 5 years from now, lending money to would-be buyers, you have first, got to be still in business.
1 vote Thank Flag Link Tue May 7, 2013
"The Appraiser's primary job is to protect the Lender from hurting themselves. " that's a valid point but i believe lenders are making so much money - it hard to be hurt!
Flag Tue May 7, 2013
Total,
Ron really pulled the curtain back on the appraisal process. It is ALL about protecting the lender to enable THEM to resell the mortgage to an investment group. The idea it has anything to do with the value (price an able and willing buyer and seller agree upon) is a smoke screen.
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Each bank imposes a unique set of guidelines on the appraisal in regards to what can be considered as comparables. This 'unique' set of guidelines allow them to conform the loan to the requirements of the orgainzation to whom they intend to sell the mortgage.
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Too often this results in FIAT appraisals!
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NO, consumers are not totally at the mercy of the lenders and the 'fix' the lenders have inserted into the system.
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However, the path to success is through the close cooperation of professionals in the real estate and mortgage business who construct the transaction in anticipation of the obstacles that are easily predictiable. FIAT appraisals are one of the easily predictable obstacles.
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Prevailing over this expectated abborition requires the buyer and seller to have their feet firmly planted on the ground of reality and with the agility to circumvent the banks intended sabatage.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
0 votes Thank Flag Link Wed May 8, 2013
Think of a clock with the pendulum swinging back and forth, when the mortgage mess was created when appraisers received intense pressure & where blackballed if they could not bring the appraisals in with the selling price. Today thanks to OVER government regulation the pendulum is at the other end of the clock and we do not yet have the right answer. The government is creating rules & trying to regulate/control that his part of the market and to some extent it works fairly well with areas where national franchises built a 1000 like and type similar homes. The problem is this “rule” does not work well for all areas of the country or all situations and the appraisers are constantly pressured and hamstrung with one size fits all rules. Also when the banks had the ability to lobby and “change the rules” they created loopholes to increase fees and cut the appraisers fee from what used to be 600.00 to 300.00 then the bank set up a mgmt. company still charged the consumer 500-600 and kept the difference as fees. The free market is not working at this time but I am seeing the smaller banks fight back a little, if an appraiser off their list consistently under performs and no deals get done the bank makes no money then that appraiser might be removed from the banks approved list of appraisers. Banks cannot pick an appraiser but they have a list and use many different appraisers via a rotation method. The situation is improving slowing and the pendulum is moving back towards the middle but it will take time.
0 votes Thank Flag Link Wed May 8, 2013
You can be pro-active. Leave some comps on the kitchen counter.

If a homeowner finds errors in the appraisal - square footage, etc. They can report this to the appraiser and ask them to correct the information.
0 votes Thank Flag Link Tue May 7, 2013
Appraisers follow the market. I have closed thousands of deals and a problem with the appraised value was a rare occurrence. Don’t get me wrong, it happens, but only twice was it proven that the value in the report was wrong, all of the other times it was accurate.

We have a procedure in my shop if the parties believe the report is wrong, they simply must contest it in writing and furnish proof it is wrong. Last year I had an agent send me “proof” that lowered the value of the report. If you don’t agree with the documentation in the report you must be prepared to furnish better documentation.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Tue May 7, 2013
Very good question, one that I ask all the time. Appraisers control the market, in my opinion. There should be no way that they are able to view our contracts & know what are asking price is before an appraisal is done but, unfortunately, they do. This is why you should never make enemies with an appraiser. If they want your deal to fly or want it to tank, its all in the cards that they hold. No how, no way, do I see this being anywhere close to objective. Things that make you go Hmmmm!!
0 votes Thank Flag Link Tue May 7, 2013
Thank you Carl! In my case it was a guy sent to appraise my townhouse for a refi project. I had no choice who to get, so I assume he is an acolyte of the lender. He could have added 15,000.00 more to his estimate but I am not sure how much that could have helped me. People like me that are not in this field have no clue and are at the mercy of lenders, mortgage brokers and appraisers and I think this is absolutely unacceptable.
Flag Wed May 8, 2013
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