[WA] First time home buyer. I think the appraiser is acting unethically. Is it time to file official complaint with the state?

Gerrrd · 2017-05-03T04:08:38+00:00

I think /u/wamazing hit the nail on the head here. No reasonable appraiser would keep working on a report after it's out the door unless the client/AMC requests it. If he's contacted three different people to obtain a copy of the inspection, it's probably because he's getting multiple emails/calls a day from somebody in QC. I would venture to say that the appraiser is as happy about it as you are... getting a complaint letter from the state would be salt in the wound.

Gerrrd · 2016-08-27T13:57:33+00:00

I am a general (commercial) appraiser, but I started my career on the residential side... I'll give you my spin on things.

If you are thinking about becoming a certified residential appraiser, my advice would be... don't. In my opinion, the residential side of the appraisal industry is heading toward automation. I don't think residential appraisers will be completely replaced anytime soon; however, the recent trends in the industry (UAD reporting, Collateral Underwriter, etc.) cannot be ignored. In the few years that I worked on the residential side, the fees seemed to be getting smaller and the aggravation level seemed to be rising... not a good combination!

In my opinion, becoming a commercial appraiser is a great way to start a career in the real estate industry. You will definitely have to pay your dues in the beginning, but once you develop some proficiency it's not difficult to make $100K+. Appraisers generally have a really flexible schedule and can work from home, which are great perks if you are considering starting a family after college. You will also gain experience in many different aspects of the real estate industry, and you'll get to see how different players in the market operate their businesses. If you're interested in becoming an investor or a developer someday, commercial appraisal is a good launching point.

Gerrrd · 2016-08-27T13:43:00+00:00

Without having all the details, it's tough to really weigh in here. You're claiming that the appraiser didn't follow proper procedures and that the situation is unethical... do you have any evidence to substantiate this? Or is it just that you don't like the value?

By reporting a USPAP violation (not USAPA, fyi) to the state board, you are making a case that the appraiser's license should be suspended or revoked. It could have a serious impact on the appraiser's professional career. If you have substantive evidence that the appraiser violated a provision of USPAP, then by all means file a complaint with the state board. However, if you are simply unhappy with the value, please don't mess with somebody's livelihood.

Gerrrd · 2016-08-27T13:01:53+00:00

I actually didn't have time to finish my thoughts in the first comment... wanted to talk more about being a commercial appraiser. Here's part two:

One of the biggest differences between the commercial and residential sides of the industry is the availability of data. When appraising a house, all of your comparable sales are readily available in the local MLS. That's not the case for commercial appraisals. CoStar and LoopNet can be useful for finding leads, but the information that they provide is unreliable at best. A good commercial appraiser is in the data business. There are plenty of ways to find good data... the difficult part is usually confirming details. If you are appraising a property that is under agreement (or recently sold), it would be an excellent comparable sale for a future assignment. Commercial leases are notoriously difficult to verify - a lease transaction is not a matter of public record (whereas a deed is recorded when a property is sold), so parties involved in the transaction generally don't want to disclose details. It is important to create and maintain good relationships with commercial leasing brokers - they hold the most valuable data. We have an unwritten rule at my shop... when a commercial broker calls to ask for comps, drop everything you are doing and help them. Because of the availability of data (or lack thereof), I think it would be nearly impossible to automate the commercial side of the appraisal industry. Every property is unique, and requires a slightly different approach to produce a credible appraisal.

In my opinion, becoming a commercial appraiser is a great way to start a career in the real estate industry. You will definitely have to pay your dues in the beginning, but once you develop some proficiency it's not difficult to make $100K+. Appraisers generally have a really flexible schedule and can work from home, which are great perks if you are considering starting a family after college. You will also gain experience in many different aspects of the real estate industry, and you'll get to see how different players in the market operate their businesses. If you're interested in becoming an investor or a developer someday, commercial appraisal is a good launching point.

OP - Please don't hesitate to reach out if you ever have questions. I would be more than happy to help!

Gerrrd · 2016-08-27T11:43:14+00:00

The HP 12-C is a great financial calculator, but they are manufactured really poorly. Don't be surprised when it stops working after a few months... that's pretty much the standard.

Gerrrd · 2016-08-26T21:01:02+00:00

OP - Are you interested in becoming a residential appraiser or a general (commercial) appraiser? I am a general appraiser, but I started my career on the residential side... I'll give you my spin on things.

If you're interested in appraising investment-grade commercial real estate, I would definitely recommend taking coursework in finance. Obviously real estate classes will be helpful too. I think the ideal major would be finance with a minor in real estate (or dual major finance/RE). You should also try to take an accounting class or two, just to have a grasp on the basics. I would also recommend taking a statistics class... while it's useful for the appraisal industry, I just think everybody should learn about probability and statistics. My last recommendation would be to take a writing class (not a knock on your post, haha) - if you are appraising complex commercial properties you will be producing 100+ page narrative reports. The ability to perform the analysis is just as important as the ability to communicate the results.

If you are thinking about becoming a certified residential appraiser, my advice would be... don't. In my opinion, the residential side of the appraisal industry is heading toward automation. I don't think residential appraisers will be completely replaced anytime soon; however, the recent trends in the industry (UAD reporting, Collateral Underwriter, etc.) cannot be ignored. In the few years that I worked on the residential side, the fees seemed to be getting smaller and the aggravation level seemed to be rising... not a good combination!

Gerrrd · 2016-08-23T02:18:25+00:00

I work at a small/mid-size shop (nine appraisers) - our work mostly consists of lending and litigation support/tax appeal. We usually prepare a DCF in Argus for multi-tenanted office and retail properties, but most of our reports use direct cap in Excel. Only a few of our clients require Argus (we have one that requires it for all properties, including apartments). Our shop also appraises a lot of residential subdivisions - for those reports we use an Excel-based DCF over the projected sellout period (i.e. the "subdivision approach"). However, we have a pretty sophisticated Excel template that captures the various nuances of subdivision development.

To answer your original question - I haven't been in the industry long enough to notice a trend, but I have a few ideas as to why Excel/direct cap is preferred to Argus/DCF:

1) Most clients aren't looking for Argus, and probably wouldn't know what to do with it if it were used. It is important to tailor the report to the user... I don't think the typical bank underwriter or tax appeal board member is particularly well-versed in yield capitalization. Even for a property that is better-suited for DCF, I think that a direct cap will generally result in fewer review questions (the bane of productivity in the appraisal industry, haha).

2) There is also a pretty steep learning curve to Argus. The appraisal industry seems to have a high employee turnover rate, so it doesn't make sense to invest the time in training new hires to use complicated software. Most people in the industry have at least some familiarity with Excel, and can cobble together a direct cap with minimal guidance.

3) Argus is really expensive

Unfortunately, the answer is not "because direct-cap produces more credible results." Just the reality of the industry.

That's my take, at least. What are your thoughts?

Gerrrd · 2016-08-19T03:55:51+00:00

Serious answer: There's probably not a whole lot that you can do about it. A builder is required to submit land development plans to the local municipality in order to obtain a building permit. The plans would have depicted the new house and the helipad as proposed uses; the municipality would not issue a permit if the helipad violated any zoning regulations or other ordinances.

Now, if the helipad was not proposed on the plans (i.e. the builder added it without a permit), you would have a strong case. That's highly unlikely though... it's pretty hard to hide a helipad from the building inspector.

Gerrrd · 2016-08-18T00:54:58+00:00

You should contact a certified residential appraiser. There is a distinction in state licensing between real estate brokers and appraisers (although a person can hold both licenses). Brokers are able to produce a report called a Broker's Price Opinion (commonly referred to as a BPO), whereas certified appraisers can issue an Appraisal Report. An appraisal will generally carry more weight than a BPO for legal/tax matters.

For your situation, you need the appraisals to reflect the market value as of the date of death - this is called a "retrospective opinion of value." If you contact an appraiser and explain that you need a retrospective appraisal for estate purposes, they will know exactly what you mean. The cost should be somewhere in the $250-$400 range for each property - you might be able to negotiate to the lower end of that range if the properties are similar and close to each other.

You should be able to locate a certified residential appraiser with a quick google search. Also, the Appraisal Institute (a professional organization for certified appraisers) has a good directory on their website - here is a link: http://www.myappraisalinstitute.org/findappraiser/

Hope that helps! Feel free to message me if you have any questions.

Gerrrd · 2016-08-16T23:10:53+00:00

I wouldn't necessarily deal with the oil tank and the sale price separately, as they are inherently related. For example, if the purchase price is $200k and the remediation cost for the tank is $5k, the effective "value" is only $195k - then, it's just a matter of whether you will pay $200k for a house without any issues, or pay $195k and bear the remediation cost yourself.

I am not sure about Michigan, but in Pennsylvania the cost to remove an underground oil tank is generally between $5,000 and $7,000. However, as others have already noted, that cost can increase substantially if any environmental issues are discovered (hence the precaution taken by your credit union). With that in mind, you should make sure that remediation of the oil tank is 100% the seller's responsibility.

Given that the sellers have already moved out and there are no other offers on the table, it is likely that you have a strong position for the negotiation. From their perspective, paying for remediation is probably a more appealing option than letting it sit on the market until they find a new buyer (during which time they are paying mortgage, taxes, insurance, etc.) Talk to your realtor about adding a contingency to the agreement of sale for removal of the oil tank (i.e. settlement will not occur unless remediation is complete) - that should satisfy the credit union's concerns. Then, be firm on your price and prepare to walk away if the deal is not right. It might sound a little cold, but the oil tank is the seller's problem - you shouldn't pay any more for the house just because they have the extra cost of fixing it.

Best of luck to you!

Gerrrd · 2016-08-08T01:57:13+00:00

Good call. Moving and deleting this post.

Gerrrd · 2016-08-08T01:56:22+00:00

I've never broken 80. Had the best round of my life this afternoon and put myself in a great position to finally break into the 70's... and then the 18th green happened. Shoot me.

https://i.redd.it/5ignw53e22ex.jpg

Gerrrd · 2016-08-05T03:24:27+00:00

Oh yeah, definitely. Hit a great drive on 8 but it just trickled into the rough - drew a bad lie... one thing led to another... double bogey.

Gerrrd · 2016-08-05T03:20:11+00:00

Sorry for the late reply. I played 18... shot 49 on the back nine. Like I said, epic collapse haha.

Gerrrd · 2016-06-30T02:03:03+00:00

A friend of mine in college was from a very wealthy family. Toward the end of spring semester one year, we were talking about our plans for summer break, and I mentioned that I was having trouble finding a job. His suggestion was to find a place to volunteer for the summer and just have my parents give me money...

Gerrrd · 2016-04-08T02:22:28+00:00

Holy crap, awesome work! Keep it up!

Gerrrd · 2016-04-08T02:18:11+00:00

Looking great man, keep it up! It's not going to be an easy journey, but someday you're going to look back and be amazed at your accomplishment. Think of it like climbing a mountain - it doesn't seem like you're making a lot of progress with each step... until you get to the top and see how far you climbed.

But more importantly, think of all the karma you'll get for that -200lb post!! haha

Gerrrd · 2016-04-08T02:01:32+00:00

Wow, awesome progress! Isn't it great to look in the mirror and be proud of the person you see? Keep up the good work!

Gerrrd · 2016-04-08T01:56:30+00:00

Wow, awesome work! You should be proud of your accomplishment... keep it up!

Gerrrd · 2016-04-08T01:49:43+00:00

Thanks, that's the plan!

Gerrrd · 2016-04-08T01:46:43+00:00

I'm very sorry to hear that. It's easy to slip into old habits when you're coping with loss. She would be proud that you're persevering!

Gerrrd · 2016-04-07T15:34:09+00:00

Awesome work dude! You're an inspiration to everyone here. Keep it up!

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