I read Robert J. Bruss' article on appraisals ("What's It Worth?" July 10) with great interest, being a certified real estate appraiser. There was a great deal of sound advice in the article, but some misinformation should be cleared up.
Bruss writes that "All appraisers must now be licensed. . . ." In fact, a license or certification is only required for some appraisals used in federally regulated transactions. This means that portfolio lenders, who do not sell their loans, are not required to use licensed appraisers.
Further, under rules that took effect June 7, many federally regulated transactions no longer require licensed appraisers for transactions amounts under $250,000 for residential real estate and under $1 million for commercial real estate.
" . . . Appraisers send unlicensed assistants to do the 'dirty work.' . . . This is illegal." This is not illegal. Appraisal regulations do not require an appraiser to view, measure, photograph or even drive by a property. They do require an appraiser to state in the appraisal whether or not the property was inspected, and whether or not material assistance was provided in the preparation of the report.
Bruss writes, "Unless they have been instructed by the lender to 'low ball' the appraisal. . . ." If the appraisal is performed to the Uniform Standards of Professional Appraisal Practice (USPAP), the appraisal must contain a certification stating that the appraisal was not performed to a specific value.
Bruss writes, " . . . Appraisers refuse to cooperate, such as preparing an extra appraisal copy for the borrower." An appraiser can not ethically provide a copy of an appraisal to anyone except the client, which is generally the lender, even when the borrower pays the fee. Please do not blame appraisers for obstructive lender practices.
So Bruss is at it again. Another article trying to equate appraisers with rejects from a used-car lot, talking about "dishonest appraisers" and those who have been told by a lender to "low ball" an appraisal.
I've worked for a major lender for more than five years as a certified residential appraiser and have never once been instructed to "low ball" a value.
The reality is this: Homeowners think that it is written in the Constitution that home values only go up and can never stay even or go down. The fact that we've experienced several years of falling home prices pertains to somebody else's home. When the appraiser reports the "bad news" via his or her appraisal report to the borrower or lender, then of course the appraiser is either inept, crooked or inexperienced.
Please, Bruss, wake up and smell the coffee. The appraiser is the only one involved that does not have a vested interest in the outcome of the appraisal.
JAMES P. SCOTT
Realtors and most homeowners demand that the appraisal profession be called art and label the values derived as opinions. The primary reason for this is to damage and call into question the credibility of the profession.
Art is subjective and open to interpretation by the viewer. The difference between an appraisal report and a work of art is that the appraisal has a definite conclusion.
That conclusion is arrived at by carefully following the requirements of USPAP (Uniform Standards of Professional Appraisal Practice) to which all licensed appraisers are bound.
The appraisers final conclusion of value is defined as an opinion. The definition of opinion is: an unsubstantiated, uncorroborated, unproven belief or feeling. If a conclusion is substantiated, corroborated and proven with adequate information, is that an opinion?
The New York State Supreme Court has stated, "When a belief is held by a person and that belief is supported by three or more articles of evidence, that belief can no longer be called opinion but instead must be called fact." Frequently, appraisals have three or more articles of evidence.
Licensed appraisers are bound by USPAP, which includes a competency provision. While many appraisers will violate this provision, it is a guarantee under law. If an appraiser is shown to have violated this provision, he or she is subject to disciplinary action by the Office of Real Estate Appraisers.
Just because an appraiser does not arrive at the needed value is not an indication of incompetence. If two appraisers, with similar qualifications, following the same USPAP requirements, are given the same assignment, they should be within 5% plus or minus of each other.
While there are some unscrupulous appraisers out there who will go along with what Bruss says today, many are quite ethical and provide good service with complete reports. There will soon be a day that comes when it is rare to run into an unethical/unscrupulous appraiser.
The writer is a certified appraiser.
Bruss enjoys writing negatively about appraisers. He does not seem to understand that values have declined in many regions. Many appraisers, including myself, consistently use listings to set an upper limit of value. It would be wise for Bruss to recommend checking all of the available listings in a neighborhood prior to blaming the appraiser for a "low ball" appraisal.
While appraising is not an exact science, it is hardly a "best guess." Appraisals are performed using factual market data, which is then evaluated based on exterior inspection of comparable properties, interviews with selling agents, personal experience and other resources to derive a most likely selling price as of the date of the inspection.
Also, I have also never known an appraiser to turn down information provided by a homeowner, as Bruss suggests some do. It is then the appraiser's job to determine what is relevant from what is not. This is no more doing the appraiser's job than keeping a clean and attractive home is doing the listing agent's job when selling a home. Due diligence is always in the best interests of the homeowner.
The writer is a certified appraiser.