City Employees Encourage False Real Estate Appraisals

St. Petersburg city employees encourage false real estate appraisals

Frank Gregoire of Appraiser Active and Gregoire & Gregoire, Inc. in the news:

St. Petersburg city employees encourage false real estate appraisals by Noah Pransky

ST PETERSBURG, Florida – Are staffers keeping city leaders in the dark on real estate deals to obtain property faster?

A 10 News Investigation into recent land-buys by the City of St. Petersburg indicates employees in the city’s real estate department are influencing the appraisal values of properties they plan on purchasing.

But employees aren’t asking local appraisers to underestimate the values of the homes they examine; they’re asking for higher-than-market value appraisals. It allows the real estate department to justify meeting holdout homeowners’ inflated demands for property.

In recent years, the city has acquired most of the parcels in the Dome Industrial Park area for a job-creating redevelopment project, but a few homeowners have held up the project by refusing to sell anywhere near market value.

The city’s most recent purchase, 2378 7th Ave. S, was valued by the county appraiser at $26,924. But the seller, a lifelong St. Pete resident whose grandfather built the home, turned down a 2010 offer from the city of $100,000. In the summer of 2011, she made a counter-offer to the city for $145,000.

The homeowner, Donna Miller, told 10 News the city’s real estate department said it would work with her offer and promised a higher-than-market value appraisal before an appraiser ever came out to the home.

The city hired Certified General Appraiser Robert L. Henderson, who valued the home – sandwiched between I-275 and a cement plant in Midtown – at $130,000. A second appraiser, Scott Seaman, was hired to review the appraisal and verified its legitimacy.

But it had been years since comparable homes in Midtown had sold for anywhere near that much. Henderson arrived at his valuation by ignoring comparable sales in the neighborhood, cherry-picking more expensive sales of rehabbed bungalows in Historic Kenwood, widely considered a superior neighborhood. He also used a number of “unqualified” sales in his comparison, an apples-to-oranges tactic that could earn him serious discipline from the state.

There were more flaws in Henderson’s initial appraisal that Frank Gregoire, former chairman of the Florida Real Estate Appraisal Board, called “either the product of gross negligence or intentionally misleading.”

“I have serious concerns about the appraisal,” Gregoire said, “and the City of St. Petersburg should have serious concerns.”

Complete story at 10 News



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City Employees Encourage False Real Estate Appraisals

by AppraisersBlogs time to read: 2 min