You've Got Just One Shot at it

One of the advantages I have over most Realtors is the fact that I'm a former appraiser. I gave up appraising for a couple of reasons:

• I saw alot of high rates and points being charged against buyers and people who were refinancing their homes
• I saw alot of fraud and saw one former boss do things that weren't legal but USAP wasn't in place in Illinois at the time, so his hand only got slapped.
• I saw real estate agents selling a property to a buyer that didn't know what he/she/they were getting into.

So, I pulled out of appraising and got in the trenches where I could best serve the consumer. So, why am I talking about my past?

Right now, I am reviewing a property in Texas for some Realtors where the appraiser is pricing the property (not a short sale, estate, foreclosure, distressed) below the lowest PLA (Price LIving Area). The advantage I have and which it allows me to asist these Reators to understand their rebuttal to the bank, is that I also understand underwirting, reviewing of a bad appraisal, etc.

The lesson learned today is that when you have a low-end or an incorrect appraisal, you need to review it carefully. If there are discrepencies, you need to point them out and get them rectified. An appraisal is an Opinion of Value reflective on the current trends and sometimes not the current trends, if the market is spiralling down. This property is located in a subdivision and an area where prices haven't been falling hardly at all, very few foreclosures (like a hint or a dash) but yet, I'm reviewing something that is 50% less then the lowest PLA - not the median PLA but the lowest one. It tells me that (a) the appraiser doesn't understand the area; (b) not enough comps and maybe not enough experience with this type of market; (c) maybe the bank doesn't want to do the loan?

The later can happen and I know as my Dad talked about a savings and loan years back wanting him to kill an appraisal and he refused to. He did tell us at dinner that we might loose a big account but he had to take a stand for what is right.

So, before blowing fuses with the bank or the appraiser, if you are the buyer then you paid for that appraisal and you have a right to get a copy of it. Bring it to someone who is qualified to review and most Realtors aren't qualified but to another appraiser who does appraisal review work.

The lesson learned is: make sure that the appraiser is qualified for appraising your home. You have that right! My Mom just had open heart surgery and major reconstruction highway work and do you think we'd let a generalist perform that type of surgery? Nope. A specialist.

Hope you learned something today.

Until tomorrow,

Barb Van Stensel
Third Generation in a
Family of Real Estate Professionals
Chicago, Illinois