Well said Gman, although I believe there is one very important segment of the real estate industry that you left out - the new home builders. Here in Texas they built "so-called" affordable home subdivisions and used their own loan companies to offer "special" loans with all kinds of added fees. Then they hired their own appraisers to make these added-fee loans work. The minute the home owner moved into their new "affordable" home, they were up-side down because the loan they had, which was usually and adjustable loan, was more than they home was worth. Then the next year when the loan went up - someone in the household lost their job, the loan was not affordable, and the home could not be sold - instant foreclosure or short-sale. Here in Texas we've seen many subdivisions with over 50% foreclosure where the builders were still building and selling new homes. Now these same subdivisions have over 80% foreclosure/short sale rates.

I also know many honest, hard working-appraisers who take their licensing requirements seriously. Unfortunately, due to the pressure that has been placed on them to make loans work no matter what, they will now only work on commercial appraisals. I'm not sure this is helping any of us in the residential side of our profession.

After reading the article on the appraisal mess in the Boston Globe, I thought I would share my recent experience. We recently sold our home in Milford, MA . After settling on a purchase price, the buyer’s mortgage company brought in an appraiser from New Hampshire who had no knowledge of the community. He spent 15 minutes in the house and appraised it at $24K less than the agreed to purchase price and $34K less than an appraisal we personally paid for 4 months earlier when attempting to determine if the home was priced appropriately.

Needless to say we were shocked. Even the buyers felt the home was under appraised. Much to our surprise, there is very little one can do to challenge an appraiser’s opinion. New laws prevent the mortgage company or loan officers from discussing appraised values with the appraiser and the sellers have little or no recourse to dispute the opinion.

Our agent and the seller’s agent submitted a rebuttal to the appraiser citing why the house was under appraised. The appraiser then raised his appraisal by $12k with no explanation as to why. He was basing his opinion entirely on comps he had never seen and it appeared he was only looking at cost per square foot. I would have walked away from the deal had I not been under some time pressure to relocate.

In the end, this appraiser cost us about $10K in the sale of our house not counting the additional stress and aggravation and it’s frustrating to know there is no process to dispute an appraiser’s opinion.

I would like to file a compalint but don't know who to contact.

Most Appraisers are scumbags, the majority of them in my area are looking to fetch any REO work possible, they would do anything to get an REO account, even lie to try to get an asset manager's contact info.

Of course they want the BPO's to go away from us, it's so they can do it themselves, what's funny is, most asset management companies and banks use both. It's defintely greed and not a quality issue as they proclaim. I have a friend who just sold their home for $590K, lots of good comps, the appraiser comes in at $550K, the Buyer is perplexed and agreed that it was worth more but still wanted the $550K price, my friend was so pissed off, he basically just said, I think I will take it off the market. Oh well, 2 more families lives ruined by another bad appraiser.

To Say "Most Appraisers are scumbags" is like stating that "most Realtors know what they're doing"

Socalreman-your obvious disdane for appraisers only leads me to believe that you have lost some deals because the appraisals didn't make value. Which again leads me to believe that the properties were probably overpriced.

Case in point; If the buyer agreed that it was worth more...Why didn't he come up with the difference out of pocket? Or, why didn't he request a reconsideration of value and defend his position with market evidence using all the "good comps"?

Or...Why didn't the agents involved in the transaction confer with the parties including the lender to state the case?

If your answer to the last question is that the lender wouldn't agree to such a meeting then why didn't the buyer try a different lender.

I realize that most home buyers can't come up with $40k plus the downpayment But, if this property was such a great deal and really was undervalued wouldn't it behoove the buyer to exhaust all avenues before walking away?

Honestly, I think the "Bad Appraiser" did someone a favor.

Here is a little excerpt from HUDS Requirements For Declining Market Appraisals

....Declining Markets
Although there is no standard industry definition, for purposes of performing appraisals of properties that are to be collateral for FHA insured mortgages, a declining market is considered to be any neighborhood, market area, or region that demonstrates a decline in prices or deterioration in other market conditions as evidenced by an oversupply of existing inventory or extended marketing times. A declining trend in the market will be identified by the conclusions of the 1004MC form. The appraiser must provide a summary comment and provide support for all conclusions relating to the trend of the current market.

Appraisal Reporting Requirements in Declining Markets
Appraisals of properties located in declining markets must include at least two comparable sales that closed within 90 days prior to the effective date of the appraisal. In some markets compliance with this requirement may be difficult or not possible due to the lack of market data and, in these cases, a detailed explanation is required. The appraiser is expected to include at least two sales that are as similar as possible to the subject and which settled within 90 days of the effective date of the appraisal in order to show recent market activity.

In order to ensure that FHA receives an accurate and thorough appraisal analysis, the inclusion of comparable listings and/or pending sales is required in appraisals of properties that are located in declining markets. Specifically, the appraiser must: Include a minimum of two active listings or pending sales on the appraisal grid of the applicable appraisal reporting form in comparable 4-6 position or higher (in addition to the three settled sales).

It's easy to figure out that I'm an appraiser. But did you figure out that I'm also a Realtor experienced in REO mangement & Disposition?

Closers dont have time for coffee...

I think there is a total game being played by appraisers since the news rules went into effect May 1. They hate the new regulations as they no longer can get referrals from their pals and they are deliberately working to break the system by collectively agreeing to routinely appraise under contract.
NAR working with the appraisal groups and others recently went wo Washington with stats that 30% of closing are being delayed due to poor, low appraisals with a request to freeze the regulations for 15 months...did everyone get the letter from NAR? Lets's do the reality check here..the systems been in place 6 weeks and NAR already has stats and is lobbying against the new regulations...Has anyone every seen NAR react to ANYTHING anywhere near this quickly in real estate? answer never...it's a game and NAR's in the middle of it. If they were just "poor appraisals" cause of the system change..shouldn't they be coming in both high and low?
It's a coordinated scam and it's not fooling me.

Everybody on this board has lost multiple deals due to appraisers. Deals that take time, effort, marketing, money, etc. to bring together two willing parties. Appraiser shuts down the deal while still getting paid. Nobody else does. I think you can understand the frustration with the appraisal profession.


Completely illogical argument. Just because an appraiser does not agree on the price with a buyer, seller, multiple realtors, and a lender does not mean the appraiser is correct.


Again...not really a logical argument. The availability of money to put down on a purchase of a property is completely independent of appraised value.


Every agent does this and it's irrelevant. Once an appraisal is in a lender's system, it rarely ever can get over-ruled.


Again, doesn't matter. These loans are bundled and sold off. They want nice, clean files so that there aren't any questions.


Again, been there and done that. Most of the time this does work. However, why does the buyer have to be punished for the poor work of an appraiser?


all buyers I deal with do...


you haven't presented any arguments that would lead to such a conclusion.

Mr.Richard, I only lost one deal back in 2005 by about $70K, that was a $1.5M deal on a condo on the beach only because the buyer was a mortgage broker who hired the appraiser, who then decided that 3 SOLD comps over the $1.5 number in the SAME building within the 2 previous months wasn't good enough for him. When the Buyer who was representing himself calls me and says, you need to have the Owner lower your price by $70K and I sent you a copy of the appraisal for proof. I didn't waste much time with him and said, I will email you over the cancellation of Escrow and I will put it back on the market in 10 minutes so we hung up. About 3 minutes later, the idiot calls me back and says, well I think I can talk to the appraiser to make it right, I said, NO, you BLEW IT, and your appraiser blew it. Kicked them out of the deal, if they wanted to [censored], I already had a copy of the appraisal because idiot buyer wanted me to see the proof that it was a lower amount than the settled price. BTW, we jacked up the price and got $1.6M for the property that was appraised by a competent appraiser.

And back to my friend who has the $40K difference. This is ongoing and very current of the times, my friend bought his home back in 2006 for $900K, it's now on the market for $620K, he settled at $590K, the appraisal came in at $550K, the Buyers are putting down 50% on the agreed amount On Thursday the Buyers Agent said that the appraisal is at $550K and that my friend needed to lower his price, so my friend asked his Agent what to do, he says, I DONT KNOW, so yes your statement about most agents know what they're doing is appropriate as mine is about appraisers being scumbags. So my friend calls on Friday morning to ask for counseling, I said to him, are you willing to concede an extra $40K, he said no, but I think I would do $10K, then i said, well offer it to the Buyers, he said his agent doesnt want to talk to the Buyer's agent because he dosent think its worth than what the appraisal value was. So I said do you have a back up offfer? He says no, do you have a lot of interest in the property since you lowered your price? He said yes, so I said to him, well if I were your agent, i would tell you to issue a cancellation of Escrow then put it back on the market for about $10K less and sell it. So he instructed his agent to cancel the deal, the agent says I hate to do that because we may not get another buyer for this property and relunctantly submitted the cancellation of Escrow to the Buyer's agent, which in turn within 2 hours of the issuance of the cancellation of the Escrow, the Buyer's Agent said that the Buyers have reconsidered and are going to make up the difference.

I have a few good friends who are appraisers, they don't give a crap about BPO's. It appears that the lazy appraisers who [censored] about real estate agents are the ones who don't want Real Estate Agents to perform BPO's because all they want is their undeserving piece of the pie.

Two of my REO deals came well above asking and settled price, why? Because they were appraised by appraisers who knew the marketplace and weren't LAZY or unethical.

So Richard stop bitching about the BPO situation and get off your arse and get a job doing what you supposed to do best, APPRAISING.

Coffee is for Closers, NOT THE MAJORITY OF SCUMBAG APPRAISERS who are LAZY ARSES that complain about Real Estate Agents performing BPO's.

Can't we all just get along??

Oh Brad, you really put me in my place. I apologize from the bottom of my heart and I will never disagree with you again. Please tell me how to respond to all commentary from now on and I will follow you.