“Greedy sellers” hit a nerve

Occasionally we ask you to write us with your thoughts or experiences on an issue. Every now and then, a lot of you will write us in response to an article we've run even if we don't ask. It's then that we know the subject has hit a particular nerve.

We received a lot of correspondence in response to last week's brief item about "greedy sellers" in the Bakersfield, CA, area accepting offers that are well above their house's market value, which puts a bullseye squarely on the back of the appraiser who must break the news to all the interested parties that the mortgage may fall through.

One reader in California wrote us, "I am a new appraiser (one year of experience) with a Trainee License. I am having a very difficult time keeping clients due in part to not meeting their 'expectations' on home values in the greater Sacramento area, be it a refinance or a sale." She continued, "I value my license and my personal ethics too much to be swayed by a loan officer trying to meet his or her numbers. I have gotten an ear full from one client just last week, others just drop out and never send any more requests once I don't hit that desired value. I could have done 10 previous appraisals, all to their liking, and then that one comes along where I cannot come in with the refinance or sale value expected, and I no longer hear from that client. It is very easy to find appraisers that will 'bend' the rules or 'smudge' the numbers just to keep clients today. I don't want any part of that," she said.

"So, I am actively studying for my REALTOR's® license to pursue that avenue of real estate. I don't want to be the person that is always to blame if the value comes in lower than expected. And, after one year of being hounded and utilized as a punching bag by the lending industry, I am no longer attracted to the appraisal field."

Needless to say, this is extremely troubling. We don't doubt that there are hundreds, or maybe even thousands, of newer appraisers in today's environment just like our e-mailer. And probably many more who threw up their hands and gave up already and didn't read our article in the first place. HUD and Fannie Mae dither over new forms and whether they've used language in regulations that will make lenders uncomfortable, while allowing this kind of thing to run good people possibly out of the profession. Either or both could step to the plate tomorrow and say that commissioned brokers and originators are prohibited from choosing the appraiser on mortgage loans they're going to buy or insure. But if the mortgage lobby had a fit about being deemed accountable for appraisal fraud, that proposal would really get them going.

We heard from many parts of the country that it's not just California. One appraiser whose area includes the states of New York and Connecticut wrote, "I am under constant pressure to ignore problems and inflate values, and if you appraise an old or neglected home that needs a lot of repairs the way you see it, they (the brokers) get mad at you and want to go somewhere else." Another reader in North Carolina wrote, "I am having to deal with this on a day to day basis. Just today I received a call from a mortgage broker who said 'if you can assure me $149,000 or more I'll give you the address and request for an appraisal.' When I told her the only way I would know the value was to appraise the home she said 'I'll just get someone else' and hung up."

We're certainly aware of the importance of this issue to our customers. There are two sides to every issue, of course, and the other side of this one comes from a Colorado reader. "My grandmother passed away in California and my family needed to establish a value on her property," she wrote. "So I told my sister to get an appraiser on the place. The appraiser completed the appraisal and it came in at $358,000. When my sister told me the value she felt it was very low and so did I. Needless to say I told her to get a market analysis from a REALTOR®. Still came in low. So over the phone she obtained sales info from nearby sales and we determined $425,000 would be a good price. She listed it with a real estate office and it was in escrow within two weeks for $422,000. So who can you trust?"

We're always grateful for feedback and your thoughts on the issues we're writing about. Don't ever hesitate to contact the editor directly at mattb@alamode.com (don't reply to the newsletter e-mail!). We read them all.