By Charlie W. Elliott Jr., MAI, SRA, ASA
Myths of Appraisers and Appraisals ome lenders seem to have a Myth I mindset that the appraiser’s Appraisers feel that it is their duty to objective is to kill their deal. focus on the negative, rendering conOthers see appraisers as another hur- servative opinions of value where there dle in the process of bringing a loan to is room for any doubt, in order to help the closing table. Some have referred prevent a foreclosure loss. Preventing to appraisers as too conservative or foreclosure losses is the job of the appraiser. very picky. Appraisers used to show up at lender Truth: Appraisers are taught and functions, but nowadays, it would be a trained to render the most likely value conclusions, as opposed waste of time for the to the highest or lowest appraiser, since most possible outcomes. The work comes down best appraisers resist through appraisal manrendering opinions that agement companies are unfounded or that (AMCs) and the appraiser are biased in any direchas little reason to pump tion, higher or lower. the flesh. Not too long Committed professionago, appraisers were part als seek a supportable of a larger local company market value and avoid in an office in town, but opinions that may be now, most work from developed to facilitate home as sole practition“USPAP requires a transaction. Appraisers. Perhaps, this has made the appraiser less that the appraiser be ers have no role or accessible. Back when competent to perform responsibility in forea specific appraisal closures. Rather, it is property values were risand makes no their job to offer value ing, the appraiser was the mention of where he conclusions that assist darling of the transaction. Today he or she, after or she lives in relation investors in best manto a property.” aging risk. working hard to find positive sales data, seems almost afraid to face the parties Myth II involved with the transaction for fear of Appraisals are required to complete being tarred and feathered. That said, appraisal forms in accordance with few see the appraiser for whom he or Fannie Mae instructions, which, if folshe really is, the All-American guy or lowed properly, produce a value congal, just like us, whom we see at church clusion with little regard to reasoning on Sunday or at a kid’s baseball game by the appraiser. Truth: Appraisal forms are merely on Saturday. After reading the above, one might organizational tools for exhibiting wonder if the appraiser or the appraisal data, adjusting prices and stating process is one in which the average per- opinions. The entire appraisal process, son is meant to identify with. I prefer to including the selection of appropriate think that, at times, when we differ in market data, and the reasoning in opinion from appraisers, we simply mis- developing a creditable value concluunderstand each other. Is the appraiser a sion, is the responsibility of the phantom? Could he and/or the process be appraiser. In fact, in cases where the better understood? Given the above, let’s uses of forms contribute to misunderconsider a few misconceptions about continued on page 16 appraisers and the work they do.
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AUGUST 2011
NEW YORK MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
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