Good and bad appraisers?

Have you ever heard it said , “A good appraiser is hard to find”. It really depends on what definition you use. I have been around long enough to know there are multiple definitions for a “good appraiser”.

The real estate appraiser’s definition of “a good appraiser”: The good appraiser has been well trained through experience, mentoring and education . He understands if the value is off, someone relying on his report might get burned. The appraiser has reliable data sources and knows his area of service well. He is expert of the ebb and flow of buyers and sellers in the subject properties marketing area , both from his extensive data sources and from his experience in the neighborhood. When including sales comparables report, he strives to use the most recent comps which are most comparable to the home being appraised. Property and locational differences are adjusted based on what buyers in the market indicate by their actions. The good appraiser also considers comparable listings and/or pendings as (after market based adjustments) they will tend to set the high end of value. The certified appraiser reconciles his inspection, data research, reasonings and analysis into a final value that is not affected by biased people connected with the transaction. The result will be an unbiased home appraisal.

From over 24 years of appraising, the following is my understanding that the definition of a good appraiser is, from the view point of view of:

Divorcing spouse A: A good appraiser is one who brings the value in LOW because I want to buy my EX out of the house.

Divorcing spouse B: A good appraiser is one who brings the value in HIGH because I want my EX to buy me out of the house.

A few Commissioned loan agents: A good appraiser is one who will, look at MLS for comps and tell me what the value will be before doing the appraisal; use whatever comparable sales will indicate a high value (even if they are not the most comparable); withhold information about the property or location ( which might upset the underwriting process ); will change the report when the truth about the property hinders the underwriter/lenders guidelines or requirements; will bring the value in for what ever will make the loan work. (Disclaimer: the majority of commissioned loan agents I work with are very professional and do not use the above tactics)

All Lenders (the one with the money): A good appraiser will be unbiased in his appraisal and communicate true market value.

It is kind of funny that the definition of “a good appraiser” can be so varied. In the face of being labeled “a bad appraiser” by those who use another definition, the good appraiser will always stick to his definition, no matter the cost.

C.W. Leeper ,real estate broker for over 35 years; certified and designated home appraiser for over 20 years ; an author, outdoors man and grandparent. He is currently the CEO of Southern California Real Estate and Appraisal Inc. Newport Beach appraisal of bayfront and waterfront homes is his specialty. Click below for more info. about Mr. Leeper www.leeperappraisal.com/principalappraiser.htm or call 949-574-5534.

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picayune | author June 2, 2010