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Appraisers Respond to Bruss' Critique

August 15, 1993

"How to Get Fair Appraisal of Your Home" (July 11) has gone over that journalistic line of objectivity to castigate a profession based upon personal experience.

Contrary to Robert J. Bruss' statement concerning his own experience in selling a home, lenders do not instruct appraisers in the performance of their appraisal, since the appraisal is designed as an independent opinion of value.

The appraiser is driven by the Uniform Standards of Professional Appraisal Practice (USPAP), which have been adopted by the lending industry as appropriate appraisal conduct. This, in turn, was dictated under Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), requiring appraisers to be licensed or certified on a statewide basis throughout the nation.

In Bruss' case, the property was being sold for $213,000, while the appraisal was for $205,000. One of the factors that each appraiser must consider involves the trend of value. It doesn't take a rocket scientist to observe that the trend of home values has been downward recently.

The appraiser may estimate that it would take six months to resell the property, with value diminishing monthly at the rate of 1%. With this in mind, the appraisal amount would be discounted for marketing time, reflecting the value shown.

A reminder to Bruss: Never let personal experience override objectivity.


Palm Desert


As a full-time real estate appraiser with over 10 years' experience, I take exception to Bruss' article.

Bruss makes many uninformed statements in his article:

1--Statement: Appraisers "all fear having a lender or borrower file a complaint against them."

Fact: Most appraisers are as fearful of having a complaint filed against them, as most real estate agents, brokers, lawyers, accountants or any other licensed professional.

2. Statement: "Most mortgage lenders now instruct their appraisers . . . to appraise very conservatively."

Fact: There is more pressure for an appraiser to "push" the value higher, than bringing in a conservative value; especially in today's market. Lenders only make money when a loan funds.

3. Statement: " . . . the best real estate agents help appraisers arrive at an appraised market value that confirms the home's sales price."

Fact: It would be both an ethical violation and a violation against new federal regulations for anyone receiving compensation as a result of a transaction to have a say in the final value of the appraisal.

4. Statement: Real estate agents often help an appraiser by " . . . handing the appraiser a list of recent nearby home sales prices."

Fact: Often agents make it very difficult for appraisers to obtain information on their sales. In fact, a new law (AB 244) will be soon passed to give appraisers access to the multiple listing service.

5. Statement: " . . . many review appraisers hesitate to find fault with the work of their fellow appraisers."

Fact: Review appraisers never hesitate to tear apart another appraisal report. In fact, review appraisers have a reputation of enjoying it.

Lastly, Bruss states that inadequate training and lack of experience are factors that can cause inaccurate appraisals. I agree that there may be some inexperienced appraisers, considering that there are some 11,580 licensed and certified appraisers in California.

The consumer, however, has a greater chance of being misrepresented by an inexperienced real estate agent or broker, considering there are about 274,320 of them.


Sherman Oaks


In the real world people make mistakes and offer too much for real estate.

As an appraiser, I have yet to see a situation where the real estate agent involved told the buyer he was offering too much for a piece of property. This comes in 32 years of appraisal experience and 31 years of brokerage experience.

It is not the appraiser's job to validate a bad purchase price. It is his job to estimate the fair market value of a piece of property, not what the lender would like to loan on or what the buyer would like to pay or the seller receive.


Costa Mesa


As the president of a large appraisal company and founder of one of the first schools of appraising in Southern California, I want to point out a glaring error in "How to Get Fair Appraisal." That is Bruss' statement that ". . . appraisers know if they want to keep their jobs and be hired again . . . they must primarily please the mortgage lender. . . ."

Good appraisers know, instead, that their highest ethical duty is to provide information to the client that is accurate and unbiased. Whether it "pleases the client" is of secondary importance.

The single most troublesome problem facing the appraiser on a day-to-day basis is the will to withstand pressure from the lender, or perhaps the broker involved, to develop appraisal estimates based more on the borrowing requirements of the buyers than on valid, well-analyzed information.




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