If you are reporting accurately, then yes. You were apparently lied to.

1. “There is nothing you can do.” Outright lie.

2.” Lenders ‘see’ the old appraisal for three years.” Misleading at best. Arguably a lie or egregious, & reckless ignorance.

Appraisals until very recently stayed with the property for 6 months, not 3 years. Now I believe it’s up to a year (Id have to double-check). However, IF a significant error was made in the original appraisal and it is not deemed to be credible, then a new appraisal CAN be ordered. That would have been the lender’s responsibility

3. There is an apparent perceptual conflict of interest involved. The bank President whose bank ‘advised you’ that there is nothing you can do has a close personal relationship with the buyer. A Godfather in the Christian religion is or has accepted responsibility for the God Child’s soul. Most objective observers would consider that a personal relationship. Coupled with the outright lie, and deceptive statement noted above, motive becomes a real issue in my mind. The burden of proof that these events are true is on you.

It’s always easier to blame the technical variances on the appraiser. Lazy or incompetent brokers who didn’t get value support before listing the property love to shift blame. It sounds like the lender COULD be seeking to help negotiate a lower price for his or her God Son.

Appraisers aren’t required to be perfect. Our standards acknowledge perfection is unattainable. We are required to produce credible results. A $4,000 new adjustment on a $300,000+ sale is max 1.3% variance. Normally variances of 5% or less aren’t even considered ‘errors’.

Do you have recourse? Sure. Hire an attorney.

I discourage it because from what you described it would be extremely unfair to the appraiser (unless you have that SR3 review to back it up). Also, it’s clear the lender OR their agent misinformed you.

It could get extremely expensive. Say you do it in small claims court. The opposing side appeals to it. Now you have discovery. Every single post here on the topic has to be divulged and disclosed by you to the opposing attorney. The other parties (bank or appraiser and brokers) could (likely) cross-complain.

If I were the appraiser I certainly would. NO ONE gets to take pot shots at my professional reputation for free. I absolutely would defend and seek damages from the accuser (you).

I charge a minimum of 150% of what I’d have charged for the original appraisal. Most lenders won’t pay competitive rates for reviews.

The form and format suggested by lenders today is also one that ‘encourages’ findings of acceptability. I either want a narrative review or an old-style NARAMU form review augmented as appropriate.

From what you are describing so far it would be faster to find decent comparables IF THEY EXIST that demonstrate a higher value in your specific neighborhood. Is it worth that much to find that the appraiser MAY have technical errors if they don’t also affect the conclusions substantively?

It all hinges on whether there are or are not SIMILAR comparable sales that sold for more money and which after adjustment still indicate a higher value for your subject.

WHY doesn’t the listing agent help with this? They are the one that suggested a price aren’t they? Why cant THEY support what they advised? Unless of course you disregarded that advice .

Wish i knew this: USPAP SR3 compliant appraisal review process. Roughly how long it takes and how much it costs.

Now I have signed the addendum at a reduced price, do I have a recourse.

Basements are not living area. The error (if any) is 40 sf of GLA. Your basement area is NOT part of the living area. Period.

Was any adjustment made in the basement gridline (right under the living area boxes)?

Ghulam if an appraiser misses 1′ of width and the length is 40′ then the error is 40 sf not 80.
IF he adjusted at $30/sf then the impact would theoretically be $1,200 for GLA. Unless the price range is in the $50,000 area an adjustment of $1,200 is not going to be significant. (That’s assuming you are correct on the 1′ of width).

A basement is not included in GLA. Not even a finished basement. Additionally, there is no assurance that the 1′ was also “missed” in the basement. They often are nominally smaller in width than upper living area levels which are sometimes measured to the outside of any siding or other fenestration depending on whether it’s ground to eaves or half wall.

Unless you have a comparable sale in as close proximity as the sales he or she used, that also suggests a higher price, then as unwelcome as the news is, there is no basis for suggesting the appraiser reconsider the value further. We consider “market significant” numbers. Not necessarily exact math extensions.

From what YOU have communicated I dont see a $15,000 error potential. Or even a $5,000 error possibility. You COULD have (pay) a USPAP SR3 compliant appraisal review performed. That would address all relevant issues including whether his choice of comparable sales selection was appropriate or not; along with specific adjustments.

I get concerned when I see dual adjustments for what MAY be the same purpose (GLA and room count). Though it is not automatically incorrect procedurally, it MAY be indicative of an appraiser used to making non-market derived adjustments. NOT a definite. Just a possibility.

It’s very hard for us to prove separate rooms and low gla adjustments. Then again if he made no room count adjustments, and had a much higher gla of $100-$150/sf would that bring the adjusted indications to a narrower or a wider range?

None of us here can give you a meaningful review in a blog.

In our office, we do not adjust for differences of less than 100 sf.

What is the GLA for comps?

This is what I have found” GLA adjustments are made $30 per sq.ft. bathroom adjustments are made $4000 per bath and $2000 for half Bath. Bed room adjustments are made $2000 per room. Basment adjustments are made $8 per ft. On size and $10 per sq. Ft. Finished.”

He noted the above statment under “Summary of sales comparison approach”

From the statment it’s clear that he is not rounding off areas but pricing it on sq.ft. basis.

Am I correct in this assumption? So if that is the case why he is stating to the bank that change in area is not going to make a difference?

Thanks for your help.

Read the addendum and see if the appraiser stated the following:

“Differences of less than X square feet are not adjusted.”

What is X?

And what is the GLA for the comps?

The GLA1 is mentioned as 862 the actual area is 902, because he missed 1 feet width wise so its missing 40 Sq. ft. in GLA.

I do include an addendum that outlines all the requests and added information. Including this at the beginning of the report causes much more work in these revision requests. Adding a page causes all numbering to change. If you have referred to other page numbers in your report (ie: see page 5), all numbers will have to be changed. In my opinion, this causes more time spent on what are typically unreasonable “revisions” to begin with. If you “miss” making a page number change, then the report is a mess, very misleading.

SOUND advice Article. As per Mr Pratt practice: I also “copy & paste” word-for-word the requested changes.

For typos- or clarifications: hummmmm
I have with ALL change “after original” delivery CHANGED to the “revised signing date”. Because simply… & for clarity: NOT the original date…anymore. Right? Looks like I’m wrong.
So, I will NOT NOT NOT change the original signing date for the above “stated” specific reasons.

Because: Most often, delays are where the Reviewer could not locate in MY report what it is they are looking FOR.
SO, actually I am just pointing them in the right direction. Handing them the missing puzzle piece.

I have a pre-page called: Intro’ Pages where it is used as TOC …for dummies… for clarity!!
ON this PAGE is every “Lender-Client” SOW reference or respective comment SINCE the Form does have space limitations.

On this page, I can reference “where” to find the “compliant for use & whys” for this & that.

Great Article & Posts. Glad to know I am doing what I am suppose to in the most concise & “in your face” order of occurrence. AND no revised SIGNING date.!!

#12- FNMA license agreements with lenders for use of CU require a ‘human being to have first screened requested new comps for relevance, AND to determine that their use wouldn’t act affect the assignment results. Now having successfully defended against a very protracted court case that arose from something related to this I can positively say that most review reports will not achieve this result or step because ONLY an appraiser can do one, and lenders will not pay for such reviews. FNMA does not require that human to be a licensed appraiser, but if it is not, what appraiser is going to listen or consider such a person’s’ determination’ to carry any weight?

Bottom line for me is that any ROV MUST include a reason the client considers the comparable to be superior. Not merely that they are comp shopping for a value. I don’t mind saying ‘no’ to lenders when they just shotgun comps. CIte the FNMA license requirement to them in its entirety including ht part where FNMA says to report their asses!

#14 Conventional can be a new report. FHA? Its been awhile since I revised one, but doesn’t an FHA appraisal STAY WITH THE PROPERTY for six months? Even if done as a ‘new’ report it would still need an explanatory addendum along with prior service disclosures.

VA should never have this situation. An appraiser declares a Tidewater condition to exist prior to submission of the completed report (so my understanding goes-please, any VA appraisers correct if wrong). Comp reconsideration actually take place DURING the development prior to reporting period. No need to do anything except document what took place IE: preliminary data suggested a value of $250,000 against a contract price of $265k. Tidewater resulted in additional relevant sales data being identified and considered. The conclusion was increased from a preliminary of $250k to $270 based on sales # X, Y & Z within this appraisal report. Nominally higher than the sale price.

Tidewater data was information not previously readily available to the appraiser. (Such as closed sales not shown as recorded-agent called title co and obtained closing data which appraiser verified and then used.)

Regulators consider each uploaded version that is signed to be a ‘final’ report. It is not an open report that can be changed. Dave’s advice is sound.