All Forum Posts by: Brad S.

so, since nobody seems to be able to address your actual question, I'll take a stab at it.

Simply - Yes, it sounds like they violated USPAP, although, you aren't clear on what exactly the "details" the Appraiser offered are. Contrary to a previous post, it does not have to do with the type of loan, it has to do with the Appraiser. If the Appraiser is Licensed and is performing Appraisal Services, then he is bound by USPAP, period!

Ok, now, the Lender is typically the Appraiser's client, no matter who pays for the appraisal. So, without specific authorization, the Appraiser would not even be able to speak with you (Borrower) about the opinions or any assignment results (final value estimate, etc). They could only discuss certain facts (gla, etc), but it is not customary to even do that with a seller or seller's agent, to any great extent. I mean, I have on occasion told the seller and seller's agent the gla I calculated, if there was some anomaly or something, but that's about it.

I see a couple issues though:

1) proving/documenting that the Appraiser did indeed violate confidentiality. Having a detailed list of what they specifically said and to whom and the evidence to prove that. I suggest trying to get that in an email or recorded phone call. Someone can email the Appraiser and see if he responds with some of the pertinent details, or with a phone call.

2) proving actual damages. Sounds like you are only speculating that the Sellers might've dropped the price, and that the "confidential details," divulged to the seller's side, undermined your negotiation.  I guess a judge would have to decide that, based on any evidence you present.

I would contact a real estate attorney well versed with appraisal issues and see what their opinion is. If you are able to gather concrete evidence and sufficiently demonstrate your "damaged," then the Appraiser's E & O insurance policy may pay out. But, luckily, in my 25 years of appraising, I don't have any experience with those type of lawsuits (or any) against me or my work.

And yes, you could also file a complaint with whichever governing body oversees Appraisers in OR.

Hope this helps and please let me know if anything comes out of it.  Good luck!

@Scott Saling

I like Allied Schools. I use them regularly for my appraisal license renewal and used them for my agents and broker license. Thorough, well put together online courses and reasonable But, I haven’t use any others.

@Kevin Luttrell

Based on what you’re saying, it doesn’t look like there is any provision in the contract to deal with an appraisal appeal. So, you may be out of luck and tied to the 3 days. But, I would check with a RE attorney or agent to verify.

What erroneous info is included on the appraisal? And, did you verify the square footage by measuring ?

Let me know if you need any further help. I see you had it done, so, hopefully, it will work out.

I am a Certified General Appraiser for 25 years

@Chris Kreslins

Everything cashflows ……with enough downpayment.

The days of easy pickins may be thinning, and now less experienced RE investors may benefit from expanding their knowledge and skills.

The RE market used to be pretty inefficient and imperfect, which created a lot of opportunity for those willing and able to exploit those inefficiencies. But, with the rise of technology (internet, Zillow, BP, etc, ), It has become more efficient and competitive, reducing the edge for investors.

So, to be competitive, you may need to expand your skills and find other options, like

* value added opportunities. Additions to smaller properties, develop land, build new houses, reconfigure existing obsolete floor plans, rehab rundown properties, etc

* Learn how to market to motivated sellers. If you think all RE investing is about looking on realtor.com or mls or having your agent bring you listed properties, you are myopic and need your vision adjusted.

* Do more of a deep dive in research, beyond your limited view. Maybe a different market has what you are looking for. Then develop your “local” team in those areas which may provide what you are looking for.

A great way to get cashflowing properties is to do a rehab/flip or 2 and then dump the profits in a rental where you want to own. Then, you don't have to worry as much about the CoC return on the rental, if you've "created" the downpayment from your flip.

Bottom line - limited thinking will get you limited results, stretch your brain……it hurts….but is worth it!

Of course, you don’t have to do any of this either and that’s fine, just realize it is a choice.

Good luck!

 Los Angeles Heights area

As Glenna stated, the only way to truly know, is to have a survey. I am also in CA and while it is true, a survey is not usually needed or done at the time of purchase in urban/suburban areas, they may be required for certain building/additions, etc. So, you could check with your building dept and see if they will require a survey for the remodel work you are doing. If they are not requiring it, then you have the option of not doing one. If they are requiring one or you want to do one anyway, then you may find out the buildings or fences (yours and/or the neighbors) may have been built on the wrong lot boundaries. Although, I suppose it is possible, I, personally am not aware of any county parcel maps that have been incorrect, unless they hadn't been updated from changes. I worked at a local assessor's office many years ago. It may just be that someone built a fence or many fences on the wrong boundary lines. Remember, a fence does not constitute a legal parcel boundary.

So, you may find out you have been enjoying the use of 6 feet of your Neighbor's land. And if that is the case, you have a few options. But, I would find a real estate attorney experienced with lot line disputes and consult with them. You may want to even consult an attorney now, prior to doing a survey, in case you would need to disclose the survey findings, if you do one. 

But, if you have been using the neighbor's land for the 6 years you have been there, you may still have options. You may be able to get a prescriptive easement, which can give you the right to use that land permanently. You won't own that part, but your use of it would not change, so, effectively, you would gain the legal right to use the land you have already been using, but just found out wasn't legally yours to use in the first place (mind twister).

But, depending on where they built the house, in relation to your legal parcel, it may affect any potential additions or building you are planning on doing. So, if you are planning on building and doing any additions, you may want to do a survey, even if you aren't required to, just to make sure you aren't inadvertently building into your setbacks or on your neighbor's legal lot. Because if you do, you may be required to remove any building you do, which would cause an avoidable problem.

@Paul K. McCoy

@Paul K. McCoy

The short answer is….maybe. It depends on the specific appraiser and their understanding of the prior transaction and their willingness to fully take that situation into account, their experience/skill level, etc

Bottom line line is that the house should be appraised at “market value” at the time of the appraisal effective date. The definition of Market Value used for most sale transactions is:

***********************

“Definition of Market Value

Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

buyer and seller are typically motivated;

both parties are well informed or well advised, and each acting in what he or she considers his/her own best interest;

a reasonable time is allowed for exposure in the open market;

payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

***********************

So, basically, your job is to get the appraiser to understand why the house was sold below market value when you purchased it, and “gently” remind them why it is now selling AT market value (mv).

Best way to do that is to compare your purchase transaction with the mv definition and clearly explain why your purchase doesn’t meet that definition.

Some Examples :

1) Borrower was atypically motivated to sell due to (fill in factors here. i.e. already purchased another home, moving out of state, inherited the house and wanted to quickly liquidate it, etc.)

2) Maybe the house wasn’t offered on the “competitive and open market,” and sold off-market or with very low days on market, causing a decreased exposure to potential buyers. Or the seller or agent didn’t properly market the house or didn’t have any photos in the listing or no sign in front, etc

3) maybe the seller wanted a quick sale and was motivated by the all cash and quick closing.

4) maybe seller was in default, which turned off many buyers and contributed to his need to sell, or maybe he’s in bankruptcy, or heavy debt, etc

Etc, etc,etc….

Other reasons why it maybe sold below mv. Maybe the house was in need of repairs and was not appealing to many buyers.

And add any other reasons which make sense.

Now, this assumes you actually are purchasing it below mv.

Then, you can explain why it is now at mv.

1) the house was fully rehabbed

2) house was properly listed with professional photos and staged,etc

Etc…

I think you get the point. The main point is give the Appraiser a legitimate reason to both explain why you were able to get it at below mv and why it is worth mv now. But remember, just because you find 1 buyer willing to pay your asking price, doesn’t necessarily mean that is mv.

As a veteran appraiser,broker and investor, I have had some bad appraisals on my own deals. So, as I originally stated, in the end, it is up to the Appraiser.

@Ryan Adams

I currently have a small mf (6 unit) in San Antonio I’m considering selling off market and exchanging into an opportunity that has come up, close to me. What are some specifics you are looking for (price range, # of units, location, etc.)?

@Manas M.

If you’re able to join USAA, have them give you a quote. I just changed all my policies to them for huge savings!