Appraisers Respond to Bruss’ Critique
“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.
DR. STANLEY S. REYBURN
Palm Desert
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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.
GLENN M. FOX
Sherman Oaks
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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.
DONALD S. REDINGTON
Costa Mesa
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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.
CHARLES THOMAS
Encino
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The notion that most lenders now instruct appraisers to appraise low has been part of real estate industry folklore in some form since at least the late 1940s, when I started working in my father’s real estate business as a teen-ager.
It probably does happen, but in the dozen years I have worked as an appraiser, the only times I have ever been asked to appraise low were by clients involved in some kind of dispute over jointly owned property, never by a lender.
The appraiser’s job is to estimate market value, not to support a particular price. An agreed price in a single sale is not necessarily market value. All buyers aren’t equally prudent or knowledgeable, and a good sales pitch or circumstantial pressure on buyer or seller can make a major difference. Market value is what a supposedly typical buyer not under any special pressure would probably pay after thoroughly checking out the market. The appraiser tries to estimate it by analyzing a range of recent sales, both high and low.
FREDERICK (ROB) COLE
North Hills
Cole is past president of the Los Angeles chapter, National Assn. of Independent Fee Appraisers.
‘Safety’ of Cellular Antennas Not Known
The July 25 “Apartment Life” column (“Does Cellular Antenna Pose Health Risk?”) quoted results from a recent epidemiology study that I co-authored. The quotes attributed to me are taken out of context.
Our study of Southern California Edison Co. personnel looked at the issue of power-frequency electric and magnetic fields (EMF) and electric utility workers. These results are not relevant to the question of electromagnetic fields from cellular phone antennas. Different frequencies of electric and magnetic fields interact with people through different mechanisms and should not be arbitrarily lumped together.
JACK SAHL
Senior Research Scientist, Southern California Edison Co.
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Having recently returned from the state Public Utilities Commission workshop on the potential health effects of cellular telephone transmission facilities, I was particularly interested in the July 25 Apartment Life column.
The column discussed extremely low-frequency electromagnetic fields (60 cycles per second), which are associated with the transmission of electric power. This is quite different from that of microwave facilities used in cellular transmission. Microwave equipment operates at hundreds of millions of cycles per second.
It is true that research done by an Edison employee on other Edison employees found no adverse effects from 60 Hz EMF exposure. However, larger studies, such as those released last year by Swedish researchers and by County USC Hospital’s Dr. Stephanie London and Dr. John Peters, did find an association between EMF exposures and increased incidence of childhood leukemia.
The problem with trying to determine a level of safety with regard to cellular antennas is the fact that so little research has been done on possible a-thermal effects of exposure to microwave and other radio frequencies. This makes standard setting questionable, at best, and at present, we’re the guinea pigs.
ELLEN STERN HARRIS
Beverly Hills
Harris is executive director of the Fund for the Environment and was a member of the PUC’s EMF Consensus Group.
