Great points Pat.

In the early 1980s Letitia Eastman bought a property that had visual evidence (“red flags”) of potential land instability. Long story short, the court held the agents failed their due diligence and awarded Ms. Eastman a significant amount of money later when the slope failed. The Eastman Act was the guiding light of disclosure for California agents all through the mid-1980s. Later; boilerplate was included in our California Association of Realtors(R) approved deposit receipts and residential purchase agreements (RPAs).

Like most boilerplate, agents have long since forgotten WHY it is there. I recently worked as a behind the scenes consultant to a law firm in the following;
https://strombotnelaw.com/2016/11/28/california-supreme-court-rules-that-dual-agency-creates-double-fiduciary-duty-for-agents/

Without commenting on anything privileged, the issues in the case would NOT have been determined by a bifurcated hybrid; nor even a trained insurance company claims adjuster measuring the property. Stripping away all the smoke and mirrors it required an appraisers professional opinion and interpretation of plans and city ordinances to establish a close approximation of living area.

And NOT just any appraiser; a highly competent appraiser.

Lenders and real estate agents and their brokers put themselves at extreme risk for no other reason than not knowing how to properly report physical property conditions. All the issues at heart, in this case, could have been avoided with a highly qualified and competent appraiser properly measuring and explaining living area from other finished building areas.

The ‘lowest-fee’ type appraiser would not have caught the issues involved. Not even if certified. Let me translate; a $500 to $750 or even $1,200+- AMC appraiser would not likely have properly identified the avoidable future litigation issues. A top-flight appraiser who would likely have charged from between $2,500 to $5,000 would most probably have identified the issues of non living area being included as GLA (& they were highly confused & unclear by design and subsequent code) though on the date of value just following the law/codes would have avoided the later lawsuit or at least disclosed the 2,500+- to 5,000 sf apparent discrepancy before the purchase was consummated.

I wonder what ten years of legal fees cost? Agents that fail to recommend independent appraisals for their clients are likely to find out.

Come on,

You can see the active listings, and get the tax info. Send the owner your ad, ask them to consider an appraisal to substantiate the list price, so they are not wasting time. Ask them to give your ad to their agent and buyer. Plus, the seller will have your info when they want to move to their new place, so your ad should say you have contacts in various and many states, so that if they are leaving the state and call you, you can refer the order to another appraiser in their new state.

Those “appraisal contingencies” if included in the contract, will still have to be met. Agents care not, who hires or recommends the appraiser to meet the contract obligation.

Network and marketing is what makes business flow. Who do you know?

Marketing to sales agents directly? I’d rather scroll through the sunday help wanted section. We all know how the game is played.

Stop and think who the whole house inspection protects ultimately. It’s the Realtor who will not be held responsible for hidden property conditions as they used to be. The inspection phenomenon began in California over 25 years ago and swept across the country.

Nowadays, how many Realtors recommend that their client NOT get the house inspection?

Fannie and Freddie did not think this through, in my opinion. Now I am set free to do an honest appraisal without their B S guidelines. They will not have further control over the process and agents and buyers will be free to utilize the most experienced in our profession.

Paul Dotterman bingo

AppraisersBlogs thank you!

California has 2. Links to both are on this page http://appraisersblogs.com/state-appraiser-coalitions-organizations/

AppraisersBlogs do you have a link for the California coalition? Thanks

This is the link I have https://www.cacap.net/

Read the full letter, what a read.

Well, the Real Estate Mortgage Market Crashed in 2008 with a de minimus amount of $250,000, not $400,000 and still,the banks had to be bailed out.

Apparently loans below $250,000 effected the financial health of the entire globe, because real estate crashed across most of it.

OPENING STATEMENT OF SENATOR WAYNE ALLARD WEDNESDAY, MARCH 24, 2004
 
U.S. Senate,
Subcommittee on Housing and Transportation,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.

It is certainly appropriate for Congress to become involved in the appraisal industry because of the clear Federal interest: Taxpayer dollars are at stake. In fact, the purpose of the law is to protect Federally insured financial institutions, not consumers. While a healthy industry can be of assistance to both, we must be ever mindful of protecting taxpayer dollars.

Well dang $250,000 de minimus did not protect financial institutions, consumers or tax payers.  Values across the country have not rise so high as to indicate that more than half of existing or new mortgages are written for $400,000 or more. Some states do not benefit from a larger population of wealthy citizens and might not see half of their loan generation over $400,000 for another 30-50 years.  One, very high, nationwide de minimus amount, only protects the wealthiest.

An ASHI Certified Home Inspector may charge around $400 to $500 for a typical sfr. It results in a thorough and highly competent report by professionals that have been thoroughly trained and had to pass a two day two-part test (written and field test). Those are worth every penny to the consumer. My best friend had one at my urging and we found a small gas leak under his house.

What many if not most agents urge/recommend is a $300 to $400 ‘home warranty inspection’ from companies like First American (much is written about their family of companies from agents to escrow to servicing to title insurance to ownership of ACI). Training is suspect; as is competency. You will have a limited warranty if covered appliances fail in the first year, but you won’t know if your foundation is cracked; joists are rotten or there are other significant defects.

It’s possible there are conscientious and competent home inspectors out there that are not ASHI certified. I just don’t know of any.

Many thanks to VaCAP and all the others. Special thanks to Johnathon Russell, ASA for drafting our joint letter linked in the above.

Only when the truth is known by the powers that be, can we judge them by their actions.

Seek the truth.

Seek the truth.