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Old 04-06-2012, 09:53 PM
 
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I recently had an appraisal done on a home that I have under contract. The appraiser went to the home with a counter-offer on the home I had made for 195k and wrote the appraised value of the home to match that price. The next day, I was informed that because the appraiser did not have the contract for the sale which was 210k, the appraiser had now used the same appraisal, but had modified the appraised value of the home by increasing the value by 15k to the final agreed sale price of 210k. Fraud?
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Old 04-06-2012, 10:35 PM
 
Location: Mostly in my head
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You need to make this clearer.

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Old 04-07-2012, 09:15 AM
 
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k here goes ... from what i understand, the appraiser values a home based on many different things, including the contracted sale price and the comparable homes in the area that have recently sold/been listed. when the appraiser walked into the home that i am buying, he held what he thought was the contract of sale for the home with a purchase price listed as 195k. he wrote his appraisal of my home using 6 comparable homes in the area that have been recently sold/are on the market currently. he valued the home at what he thought was the contracted sales price of 195k, finished his report and sent that report on to my lender and i assume the seller, seller's agent, and my agent. i was contacted by my agent and told the appraisal was done and that the appraiser had valued the home at 195k. we discussed writing up the new offer on the home and i waited for the next day to sign and submit the new offer. the next day, i received a call from my lender. my lender explained that something had been changed with the appraisal that was done to the home. she explained that the appraiser did not have the correct contract with him/her when he/she did the appraisal and after some discussion (i assume with the seller's agent) the appraiser had written a new appraisal for the home, using the same comparables, nothing having changed on the document, except for the new appraised value of the home at 210k. So, i have 2 appraisals that are exactly the same, the only difference between them being that the appraiser looked at 2 different contracts with 2 different sale prices, same comparables, same everything else.
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Old 04-07-2012, 11:23 AM
 
Location: Verde Valley
4,108 posts, read 9,370,627 times
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The only way to know if it's fraud is to check their governing body. I was a realtor for 16 years and appraisers always called me to help determine how much a place was worth. A big part of it is how much a buyer is willing to pay. It happened (but was rare) that an appraisal would come in lower than the purchase price and in that case the bank wouldn't fund it for the full purchase price. This wasn't an issue with buyers who had more moeny down. Appraisers walk a find line, it they appraise it low the selller is unhappy.
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Old 04-07-2012, 12:28 PM
 
Location: Mostly in my head
19,865 posts, read 57,458,780 times
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So you want to stick to the lower appraisel and get the house at a cheaper price? I doubt the seller will agree. I guess you want to file a complaint against the appraiser, is that it?
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Old 04-07-2012, 06:00 PM
 
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You said the only that changed was the value, but....the appraiser would have to make significant changes to the adjustment grid, discussion and analysis of the sales to come at that much of a difference. No one here can say if it is fraud or not. It would require a thorough review of both appraisals by a qualified reviewer before an claim of fraud can be made.
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Old 04-08-2012, 01:44 AM
 
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I'm an appraiser with 25 yrs experience and can tell you that it is very likely a fraudulent appraisal. The contract price is irrelevant to the appraiser. If the value is truly $210K then that value should have been opinionated on the first appraisal.

Last edited by yousah; 04-08-2012 at 02:19 AM..
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Old 04-08-2012, 05:21 AM
 
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I simply find it odd that any appraiser would even look at a contract for sale and treat it as if it were actually a sale. The purpose of the appraisal is to judge the value of the property--based on sold comparables--and then the bank can compare that value to the proposed contract, and determine whether they wish to make a loan. If what you describe is not out-and-out fraud, it's downright fishy.
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Old 04-08-2012, 10:26 AM
 
Location: Pawnee Nation
7,525 posts, read 15,128,284 times
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Quote:
Originally Posted by teachdunc View Post
........the appraiser values a home based on many different things, including the contracted sale price..........
This is nearly 100% wrong. An appraiser should never take the contract price into consideration with one minor exception.

In the appraisal process, the value of a property is established as a range of value. Assume the appraiser, in a cookie cutter area, establishes the value at somewhere between $220,000 and $235,000. A contract at $230,000 would provide market evidence that $230,000 is a reasonable price, and because it is within the range independently established would probably be the appraised value.

If the Contract price is $245,000 with the same range having been established, then the maximum appraised value is still $235,000. When the price is substantially higher than the value it is often important to recognize that it may be more than just a lack of knowledge on the part of the buyer. Are there significant shortages of houses like that suggesting inflationary pressure of some type?

If the contract price was $195,000 then, in my reports, the appraised value is going to be closer to $220,000, although it may be necessary to revisit the contract. Why the price is lower than the value becomes important as it may indicate a future trend that needs to be noted. Was the listing price too low to begin with (if it sold in less than 30 days it may very well be a bad listing price). Was there undue pressure to sell quickly (at which point we are looking at the sale price setting liquidation value, not market value) such as divorce, job transfer, estate settlement, foreclosure, etc.

If the typical marketing time is 120 days in a market, and the sale took place 30 days into the listing and it was at full listing price, it very well may have been under valued.Both marketing time (the time it takes to sell the house after the effective date of the appraisal) and exposure time (the time it was exposed to the market before the effective date of the appraisal) become important facets in the development of market value.

If I have a house that would sell for $250 after 120 days on the market, how much would I have to discount to sell it in 30 days? 20%? If it DID take 20% discount to sell it in 30 days, how much to sell it in 90 days? Exposure time becomes a very real element in the development of market value......unfortunately there is a lot of real resistance in the appraisal profession to considering this element.........not only is it a lot of work, but it is difficult and complex to establish that discount factor.
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Old 04-08-2012, 06:30 PM
 
4,903 posts, read 12,234,266 times
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Quote:
Originally Posted by teachdunc View Post
k here goes ... from what i understand, the appraiser values a home based on many different things, including the contracted sale price and the comparable homes in the area that have recently sold/been listed. when the appraiser walked into the home that i am buying, he held what he thought was the contract of sale for the home with a purchase price listed as 195k. he wrote his appraisal of my home using 6 comparable homes in the area that have been recently sold/are on the market currently. he valued the home at what he thought was the contracted sales price of 195k, finished his report and sent that report on to my lender and i assume the seller, seller's agent, and my agent. i was contacted by my agent and told the appraisal was done and that the appraiser had valued the home at 195k. we discussed writing up the new offer on the home and i waited for the next day to sign and submit the new offer. the next day, i received a call from my lender. my lender explained that something had been changed with the appraisal that was done to the home. she explained that the appraiser did not have the correct contract with him/her when he/she did the appraisal and after some discussion (i assume with the seller's agent) the appraiser had written a new appraisal for the home, using the same comparables, nothing having changed on the document, except for the new appraised value of the home at 210k. So, i have 2 appraisals that are exactly the same, the only difference between them being that the appraiser looked at 2 different contracts with 2 different sale prices, same comparables, same everything else.
Are you saying the counter was not accepted by the seller's yet...that the price was still being negotiated?

fyi-the appraiser sends a copy of the report to your lender and no one else.
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