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Carolyn Thor…, Home Buyer in Minneapolis, MN

Appraiser is also a real estate broker? What the ....!!!!?

Asked by Carolyn Thorson, Minneapolis, MN Sat Apr 10, 2010

Hi, I'm the one that posted on the $75,000 difference in value from 2009 to 2010. After a little checking, the appraiser is also a real estate broker using 2 different names. Legal? Not returning my calls or emails.... now I know why.

Think we got a low ball appraisal because we are FSBO? Why use a different name for each license? Is it a conflict of interest possibly?

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Hi there.

Follow Bills advice as well as look up their license info on the Department of Real Estate's website. You can find out their license status and any past problems on their record.

Taking 6% off for anything is bull and a sham. I'm sure that if you were listing your home for sale as a FSBO at $50,000 that the appraised value wouldn't be 6% under that as well. Commission or no commission - that should have no effect on the value of your home.

To me, being a mortgage broker or appraiser while being active in real estate sales presents a conflict of interest - but that's just me and it isn't illegal. My problem is that if you don't know what you are from one day to another )one day an appraiser and the next a salesperson) then how can you actually give great service?

Here's another tip: the appraisal is only good the day you receive the results. The day after, your appraisal becomes worthless. Your best use for that is for updating your insurance policy.

Here's why. When you list your home for sale and get into contract, the buyer will either pay all cash (meaning you never need an appraisal) or they will get financing. If they get financing, the bank will require a new appraisal done regardless of any previous appraisal performed. They will not take your appraisal because they want independent verification of value.

Furthermore, any buyer and agent worth their salt will ignore a seller who justifies their value based upon an appraisal they have paid for. This is due to the fact that they are likely aware of the bank's requirement stated above - and the bank's appraisal is what matters.
Web Reference: http://www.atlistings.com
1 vote Thank Flag Link Sat Apr 10, 2010
Snowed,

It certainly sounds as if something isn't right here! If you feel there has been a breach of ethical standards there is a process that might help.

Try contact ing the agent's broker to report your concern and/or contact the local board of realtors and explain your situation. Both entities are commited to solving problems such as this.

Best wishes,

Bill
0 votes Thank Flag Link Sat Apr 10, 2010
You're right, better to sit on equity, negative or positive, if you can until the market gets normal (whatever that is...). I argued your point with the appraiser who took out 6% for commissions, he wouldn't change his mind. Hired another appraiser.
Excluding short sales and foreclosures from median price and comp calculations has been an argument for a few years. It's tough to compete against an artificially low price when you have a well maintained home. I often list properties in probate that must be sold to pay taxes and they have the same effect on the market.
Better to troll for walleye than worry about it if you don't have to.
0 votes Thank Flag Link Sat Apr 10, 2010
Thank you for your replies.

" Expertise in more then one discipline often makes you a better educated professional in both."

I agree as long as it's above board. I have never heard of the deducting 6% out for a FSBO. Interesting. But really, commissions are negotiable so realistically, how would an appraiser know if I was offering 3%, 3.5%, or 4% to a buyers agent?

Kind of backwards the way houses are being comped with foreclosures and short sales if you ask me. Our price per square footage on the appraisal was less than 2 of the foreclosures we were comped with - we have subzero fridge, wolf range, hwf, 1000+ feet of granite in the kitchen, etc., etc. Most short sales are missing lots of stuff....

. We received an offer for $345,000 (yesterday) but it only appraised at $300,000, personal appraisal, not a bank appraisal, (found out after the offer) - guess we get back to the buyers and send them to the forcosure for $325,000. Been in it, fixer upper, but they can at least get a loan on it because it is bank owned.

Things are crazy - $75,000 hit in a year is a lot. Guess it time to just sit on equity. :-)
0 votes Thank Flag Link Sat Apr 10, 2010
It's possible to get a different value because you are a FSBO. Several years ago I was working as a mortgage broker for a client who was buying an investment property in Hawaii. I hired an appraiser that I had never used before and received an appraisal with a value adjusted lower to reflect the current market value minus 6% for commissions. I asked why and the appraiser said that it was because both parties were represented by attorneys rather than agents (a popular thing at the time for old school investors). This adjustment made the buyer and seller both unhappy for various reasons. I called other appraisers and asked about this practice and was told that it was allowable under appraiser professional standards, but that few appraisers actually did it. Maybe yours did. I hope a licensed appraiser will read this and comment.
0 votes Thank Flag Link Sat Apr 10, 2010
Check with the Licensing authority for the State. There is nothing illegal about holding multiple licenses. Expertise in more then one discipline often makes you a better educated professional in both.

More often than not - these situations are just misunderstanding. A call to the licensing authority to inquire as to why there are 2 different names being used may shed light on the situation.

Good Luck!

Gerry Dunn
Associate Broker
Serving Maryland, DC and Northern Virginia
0 votes Thank Flag Link Sat Apr 10, 2010
Hi James -

I am their client - I paid them $375 to appraise it. I sell FSBO and hire a certified appraiser to appraise the house I am selling before putting it on the market. Last February it appraised out at $375,000. Year later, $300,000.

Bad experience at on my second home sale - realtor under appraised house by $100,000, tried to sell to their friend - deal unraveled - sold myself 2 months later for $100,000 more after hiring an appraiser for comps.

But, I always offer a buyers agent commission - they do work hard.

Why would they risk their license?
0 votes Thank Flag Link Sat Apr 10, 2010
Snowshoed I know a couple of brokers who are liscenced appraisers and brokers. The ones that I know would risk their liscence on a bad or fraudulent apparaisal. As for the appraiser not returning your call you are not their client and without permission they can not talk to you about the appraisal.
0 votes Thank Flag Link Sat Apr 10, 2010
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