Home Buying: Getting an Honest Appraisal

Author: Wendy Black Polisi

Among the many causes of the 2007-2008 real estate crash was the injurious use of fraudulent home appraisals in determining home values for mortgages.  The appraisal amount is an indispensable factor for a mortgage lender in determining how much to loan.  If a property has been appraised for the wrong amount it can cause quite a problem.

Although home appraisers are supposed to function independently of lenders, during the bubble they were frequently hired directly by lenders.  This created a situation where appraisers that created appraisals with values that were favorable to the lender, were given more work by mortgagers.  There was an increasing pressure on appraisers to take care of their employers by producing the numbers they wanted to see.  Unfortunately, this was detrimental to the buyers.  As the market crashed, these properties lost value, not just actual value, but also the over-inflated value given by the appraiser.  Mortgage holders had to foreclose on and try to sell many properties that could never be sold for anything near the original loan amount.

To avoid this, there are steps that a borrower can take to get an honest and legitimate appraisal of their home. Although the lenders usually have their own appraisers that they deal with frequently, the cost of the appraisal itself is usually charged to the borrower. As the borrower is paying for the appraisal anyway, there is nothing to prevent the borrower from hiring their own appraiser, as opposed to the one recommended by the lender. In fact, this is a very good move to make and if your lender refuses to accept this – assuming your preferred appraiser is legitimate and in good standing – then it should be taken as a red flag that the lender may have an ulterior motive.

Finding and hiring your own appraiser adds an additional element to the home buying process and is extra work, which is precisely why many borrowers are willing to accept the lender’s recommendations. However, if the entire mortgage is based upon an inaccurate appraisal, this can result in massive losses for the borrower in the future. For this reason it is worth the effort to take the time to find and hire your own appraiser.

Appraisers are easy to find in the yellow pages in any location.  However, making sure they are legitimate and in good standing with the state takes a little more work.  You can check with the Better Business Bureau and with the state attorney general’s office to make sure they are licensed.  These two are also a good resource to find out about any criminal records and lawsuits.  And of course, the company will be happy to provide references from all their most satisfied and happy customers.

It means more work for you, but hiring a legitimate firm to do an independent appraisal can save a borrower thousands of dollars and keep credit trouble away.  Doing the extra work is well worth the effort.

Article Source: http://www.articlesbase.com/mortgage-articles/home-buying-getting-an-honest-appraisal-1308204.html

About the Author

Wendy Black Polisi is the founder of Credit Repair College and Finance the Dream. To learn more about how to fix credit fast
and getting a credit card after bankruptcy
please visit her on the web.

Technorati Tags: appraisal, buying a home, Credit Repair, Home buying, Real Estate, real estate investment, real estate sales

I've been doing this 12 years. I just don't like it any more. It provided very well for me for a time, but now it's time to move on. I'm not going to live my life spending the majority of my time on things I don't enjoy. More later, but the way to get out of this business, without working for somebody else, is at Wealthy Affiliate. Warning, you have to work at it...but if your willing to put in effort, with time things will never be better!

Technorati Tags: appraisal, appraiser, appraising, appraising jobs, frustrated appraiser, real estate appraisal career

Secondary market loan, so they said. So, I just get off the phone with the loan officer at the local bank. She didn't order the appraisal, they actually have a good system set up rotating through different appraisers.

So, she calls about an additional comp. It is an Aframe, and of the 4 closed sales already in the report, 1 is only kind of an Aframe. But, since there weren't any recent closed sales of comparable Aframe, I went the 4 sales, and also added an active listing from the immediate neighborhood that is an Aframe.

She asks for an additional comp, and no problem...I understand that. Just need to get outside the time frame and or price range and or geographic region, but I understand.

Then she starts chastising me for having an active listing in the report. Saying "well, I've been in the business for over 28 years, and never seen an active listing in an appraisal." I call BS! Bull pellets. No Way.

So, is she influencing me to take this listing out of the report. I told her for me to even consider it, I would need a request from her in writing as to why it needs to come out. I'm going to expand on that email conversation with her until she really shows how stupid she is. At that point, I'll give her a report with probably two more additional comps, both Aframes, and that listing will still be in there.

I hate this business.

Technorati Tags: Aframe, appraisal, lender influence, Lender pressure on appraisers