There is no way I can start this blog off without referencing the famous scene from the sopranos with Vic the Appraiser seen here: https://m.youtube.com/watch?v=IcGMCA13T9M
Poor Vic. He just gets beat up for just doing his Job in this episode. While many appraisers will never experience this sort of violence against them, they do experience their fair share of harassment and more via emails, phone calls, lenders, realtors, and AMCS (Appraisal Management Companies).
The appraiser is widely considered a hindrance to realtors, buyers, and sellers. Many times, this results in non-stop pressures to hit a value or reconsider a value they gave to a home due to the outside influences that think the home is worth more. While the appraiser never really ever gets beat up on a job, they do, however, get beat up mentally, and it comes from all directions.
Most of the time, the pressures and the issues come from a disgruntled homeowner or realtor where the appraiser has valued the home less than what the contract price agreed upon states. It may come from a lender that they are doing the appraisal for; however, the value won’t allow them to do the loan, therefore having the Lender asking questions for a higher value or worse, pressuring the appraiser to reconsider the value or be taken off the panel. Yes, this happens. Many appraisers are taken off panels due to just doing their Job correctly however when it doesn’t meet the need of the Lender, who is taking on the risk (who in these cases doesn’t care so as long as to make it work and make their commissions) the appraiser is faced with the decision to either make it work or lose out on future business. Appraisal Management Companies are the agent for the Lender or an extension per se. They need to make their client (the Lender) happy or risk losing their business. This is then projected onto the appraiser. If the appraiser the AMC has chosen doesn’t do things the way the Lender wants or needs, the AMC is then threatened with a loss of business, which in turn is then thrown down to the appraisers that the AMC uses. Its really ridiculous if you think about it, HVCC now Dodd-Frank was put in place to take pressures off the appraisers and have them remain unbiased without pressure directly from the Lender, however, it’s now no longer direct, it’s passed through the AMC to the appraiser. Has anything changed? In my opinion… NOPE. Talk about pressure? I know for a fact that I have been removed from panels and stopped getting orders because I wouldn’t comply with the JUST MAKING THE DEAL WORK mentality or came in under contract value (which is not to be mistaken for market value which is what I appraise for) After all I have a license, standards and ethics to abide by. Where are these same Ethics and Standards in other sectors?
It may come from a Realtor whos not happy with the overall value of the property in the report. In this case, the realtor will threaten the appraiser by stating they will file a complaint with the state board, tell others in their network that the appraiser is an issue or they will set out to tell the lenders and AMCs that the appraiser is not to be used on any of their transactions. Within the appraiser community and groups, we see this happen often. An order is sent over to an appraiser, and it specifically states that such and such appraisers are not to be used. Sometimes when the appraisal is ordered and the agent finds out it’s an appraiser, they don’t like they call the Lender to get the report reassigned to another appraiser. When did Agents gain so much power to be allowed to have assignments reassigned to another appraiser? After all, the appraiser is the ONLY unbiased person in the transaction, while the realtor by their actions continues to show how Biased they really are. How does this protect the public trust? It doesn’t.
Another area of pressure appraisers face is that of the Reconsideration of Value (ROV) that is sent to them via the Lender. In my experience, I will get the ROV with suggested sales to consider instead of or to accompany the ones I used in my report. Many times there is a ZERO explanation from the Lender or realtor as to why these should be considered. Its the appraisers’ Job to consider the best overall sales for the report and not to explain why they didn’t use certain sales. However, these sales are sent to the appraiser to consider, and 99% of the time, they are sales that magically support the sales price with once again ZERO explanation of why. With the new Dodd-Frank laws etc, the Lenders or AMCs are supposed to give reasons as to why these sales should be considered, yet almost all the time, there is none—more pressure. Now sometimes, I will admit I have missed a sale or see that something suggested does, in fact, compare to the subject property; however, most of the time, they do not. They are just sent because they support the contract price and not the market value. Again Appraisers appraise the market value and not the contract price. ( well let me clarify here… Appraisers that do their Job correctly appraise for market value).
I wrote a previous article entitled Realtors Vs Appraisers The Great Divide. In it, I outline the roles of each party. It can be read here: https://skaptheappraiser.net/2020/05/25/realtors-appraisers-the-great-divide/ Far too many realtors believe they know better than appraisers and well the same can be said the other way. However, it’s apparent that many realtors do not understand the role of the appraiser, and well, while they think they have to deal with pressures, they have no idea the amount of pressure appraisers deal with on a daily basis.
To lenders and Realtors… Appraisers aren’t the enemy. We are doing our jobs to the standards of USPAP (Uniform Standards of Professional Appraisal Practice ). We do things differently than Realtors and Lenders. We are a profession for a reason. That reason is to remain unbiased, to provide a market value, and protect the public trust. We aren’t here to screw your deal; we aren’t here to make your lives harder or your deal more difficult. Pressuring appraisers to do things to fit your needs is not only unethical; it just makes things worse. At the same time, you may not agree with the final outcome, it’s then up to you to provide the appraiser with factual data, information, and more to back up your argument. Disagreements will happen, however dealing with them properly, makes for a better relationship and transaction. Threats and more just because you disagree or your commission is not what you think it should be is not acceptable.
Before you threaten an appraiser or decide to take them off your panel, have a conversation. Try to understand their view and allow them to understand your view. Appraisers do not always understand the realtor or Lender. Realtor and lenders do not always understand the appraiser nor how or why they did things within the report. Read the report. Highlight the things that need to be discussed or questioned. Just don’t look at the number on the report. A good appraiser will have info within the report that explains details. Engage them and have a conversation professionally. You may be surprised at what you learn, they learn, and that it’s not as bad as you think.
One thought on “I’m Only The Appraiser”
Excellent Blog. One comment that should be made it the best time to fight an appraisal or have the appraiser consider value is before the appraisal not after. If the listing agent has information the best time to provide it is at the observation not after the appraisal has been delivered.