Robert Bruss is correct that an appraisal fee should not be based on the value of the property. However, in the instance he describes, the higher fee may very well have been based on the difficulty of the assignment and not the value of the home. As an example, a home located in an exclusive neighborhood, in which supporting sales are not readily available, can be more time-consuming and difficult to appraise. If cost is so important, a property owner should call several appraisers to obtain the lowest fee possible.
To consider faulty appraisals as the major cause of S&L; loan losses is unfair. Large loan losses begin with the managers of these financial institutions and unsound loan underwriting standards. Management is responsible for formulating appraisal standards, reviewing and approving the work of potential appraisers and terminating the services of those appraisers that do not adhere to proper work standards.
If lending institutions prefer to use poorly trained, inexperienced or unscrupulous appraisers, they are getting exactly what they paid for and should take responsibility for their actions.
ERROL B. TONSKY
Tonsky is a real estate appraiser.