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What would you do about this appraiser?
Old 01-27-2009, 03:37 PM   #1
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What would you do about this appraiser?

We started refinancing our mortgage on the 2nd of January and we may close on the 30th. Refinancing is a completely different experience than four years ago, with piles of documentation and a checklist mentality. No judgment or experience allowed-- follow the rules. I'm biting my tongue but it's getting done.

We're using a small local bank instead of NFCU so we have great personal responsiveness but slow/manual paperwork. We're locked through mid-Feb but we hope that this doesn't drag on. If the closing reaches the 10th of Feb then another payment will be due on the old mortgage, and its final balance will result in us having a "cash out" refi which will take longer to approve.

The appraiser has been the critical path. This has been a pretty silly exercise for a mortgage of less than 40% of the home's assessed value, but arguing was not going to change the rules. We were warned that the refi boom had overloaded the appraisers and that it'd take a while to get to us. With a little prodding by me to the bank, he showed up on the 13th.

Despite over a million residents, Oahu is a very small island with very local customs. Everyone knows everybody, so much business depends on family and connections. Reputation (and referrals) are everything. Practices are also much less formal than the Mainland, and in general that's a good thing. "Talk story" is a nice way for new acquaintances to get to know each other and to find a common ground among the crowds and the business at hand. An appraiser in a busy metropolitan city might race through the property and be gone in 15 minutes. An appraiser on Oahu, even in a frantic market, will take some time to chat with the homeowners and make sure that everyone's comfortable with the process. I'd offer fruit from our trees, he'd talk about his home & family, we'd admire the view together. Or so I thought.

Wanting to grease the skids, we threw a welcome party: free copies of our eight-year-old appraisal, our tax-assessor records, survey plots of the lot, and diagrams of the house with dimensions & plans. He could've cut & pasted three-quarters of our boilerplate into his comp analysis. We joked about sharing our hard drive photos on Photobucket for him to download and said that we'd be happy to type his dictated appraisal comments onto our computer while he looked for comps on his laptop. We wanted to make it as easy and as quick as possible for this guy to come up with a number that was within 30% (either way) of the assessed value-- and get it done in a few days.

However, even adjusting for local custom, it was pretty clear that the refi boom has caused banks to start scraping the bottom of the appraiser barrel. This guy had been recalled to active duty far beyond his proficiency level. His "talk story" was more of a monologue. He seemed happy with our paperwork but he never referred to it during the walkthrough. He moved veeeeeerrrrrrrryyyyyy slowly. For example he'd enter a room, make some notes on a clipboard, look for a horizontal surface to put it on, pull a digital camera out of his fanny pack, turn it on, frame a shot, take the picture, turn off the camera, restow it, locate his clipboard, make a note, and re-enter his personal DO loop by searching for a new horizontal surface. This went on for over 30 minutes.

11 days later he phoned to ask to visit us later that morning. He said that he'd given his camera's digital chip to a friend to look at our photovoltaic array and the friend had mislaid the chip. He didn't want to wait any longer to find it so he wanted to take a new batch of photos. Of course we told him to come right over and we'd be happy to help. He said he'd be sending in the appraisal that night.

It's the worst attempt at an appraisal that I've ever seen. It came in higher than the assessment so the bank is happy. The appraiser made a number of mistakes on the report but none that would lower the result. It's wrong but it's not going to harm their ratios or impede their approval. I'm certainly not going to say anything to delay the closing, particularly pointing out incorrect info on their precious due diligence.

So the job got done. But it bothers me that I'm paying over $500, including a $50 "large lot" surcharge, for a slow & crappy job. It bothers me that a putative professional sees nothing wrong with sharing our private photos like party favors. I would've been happy to do so if asked but it never even occurred to the guy to ask in the first place.

I spent most of yesterday getting over my slow burn. My next instinct was to bring it up with the bank after the closing, suggesting that they owe us a refund. My latest instinct is to keep my mouth shut and just get on with my life, even though this guy is probably going to continue to do a progressively crappier job on other homes until it gets so bad that even the bank notices. And that's just wrong, although it's pretty small in the big scale of things.

Maybe venting here is all I need to do. Of course I'd have to find someone (other than me!) for my spouse to get her venting done too.

Any other options? What would you do?
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Old 01-27-2009, 03:52 PM   #2
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I have had many houses, some refinanced multiple times, (one from 13.5 % to 5.75). Had many dealings with bank appraisers, all of which I paid for, none of the banks disclosed the results until a year after the event.

Some of the appraisers were in similar league as yours. I went through a few of same type of (want to choke the living s**t out of the idiot) customer service. In the end, nothing could be done with any satisfying result. The few complaints I made were not even acknowledged by the banks.

So good vent, take a happy pill and hope for a good result.

Only one time I got the fee reduced when the appraiser simply copied my previous paperwork. Still cost $100.
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Old 01-27-2009, 05:01 PM   #3
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My latest instinct is to keep my mouth shut and just get on with my life...
Good instinct.

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What would you do?
Don't you surf or something? I'd do that.
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Old 01-27-2009, 05:13 PM   #4
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It came in higher than the assessment so the bank is happy.
Good! Considering the purpose of the appraisal, it sounds like the appraisor did a perfect job for you.

I'd just chill and forget about it. Yes, the guy is a lazy bum and gets away with it. Still, you paid and you got the desired result.

Even better - - why not talk to the appraiser about following in his footsteps? Sounds like he gets paid a lot for doing almost nothing on a sporadic basis. Great ER job.
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Old 01-27-2009, 05:25 PM   #5
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To play devil's advocate, you paid for the appraisal so who else is going to complain about the quality? Too much money gets paid for poor services. You're retired, you have time to complain.

However, it is hard to complain after closing. You will probably sign a closing statement which will have the appraisal fee included. By signing off on it you may lose the right to ask for a refund.
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Old 01-27-2009, 05:27 PM   #6
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You're retired, you have time to complain.
Florida's new state motto.
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Old 01-27-2009, 05:35 PM   #7
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This clown sounds like our local tax assessor, from about 15 yrs back. Same type of thing where you have to smile while picturing your hands around his throat.
Except in my case he shows up uninvited, with no advance phone call. I just happened to be home on leave that day. The Stealth Assessor was foiled again.
He has old and incorrect paperwork. He insists we had an above ground pool. It's an outdoor jacuzzi. He wants to take pictures of it, our taxes will probably go up, yadda yadda.
I was nice, pointed out the error in plain English, and we talked about the weather. I finally asked the guy to formally change the tax records and asessment. I invited him to see the back yard, but he declined.
The good news is he cost me nothing. The bad news is he never changed his records, and I had to go do battle with the Town Clerk. She was cool and fixed it in less than 10 minutes. Our taxes were reduced.
Now that I distracted you with my inane story...have a beer and enjoy paradise.
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Old 01-27-2009, 05:35 PM   #8
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You're retired, you have time to complain.
Yes - but there are sunsets to be watched, beer to be drunk, kids to be played with, dogs to be scratched and naps. Which one would you like to forego in favor of carping?

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Old 01-27-2009, 05:35 PM   #9
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First, the appraiser works for the bank. As such he is required by law and ethics to only disclose his appraisal to the bank. If the bank wants to give you a copy, that's their business, he is not suppose to without the banks approval. Yea, I know you paid for it, but by law the bank must heir the appraiser. In fact if you recommend the bank use a specific appraiser, they are not suppose to.

All appraisers used by banks or companies insured by the FDIC must us state certified appraisers. Therefore, the appraiser that did you job should have a state certification. I don't have a clue what the Hawaii agency is that handles this, but there is one. Find out and complain to them.

Some other things. I the loan amount is less than $250,000 the FDIC does not require an appraisal. Actually there is a set of initials that deals with this, but, hey it is past happy hour here and I don't remember them. $500 is a lot for an appraisal! If your loan amount is less that $250,000 the bank can use the tax appraised value or what is known as a drive by. My guess is they charge a flat fee of $500, and the appraiser charged the something like $250-$350. As you said, you could argue, but they take the stance, 'you want the loan, pay for the appraiser'.

By the way, I use to be a State Certified Commercial and Residential appraiser in another life. However it has been 10 years, so things may have changed. However, I would expect the Dememis value would go up from 250 rather than down. It use to be $50,000 til about 1997.
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Old 01-27-2009, 05:45 PM   #10
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I had a similar situation with a surveyor when we built our house.

We owned our 5 acre lot free and clear but to finance the house we were building we had to have a new survey. The lot had been surveyed for $300 when we bought the lot 3 years prior and I gave the new surveyor a copy. It was hot, the property line was rocky and steep in places, the chiggers were fierce, and the surveyor was overweight. The charge was $800.

When I complained, I was told if I wanted to contest the cost it would delay closing indefinitely and the rate would float while we worked out the dispute.

I paid the $800...but I'm still bitching about it.
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Old 01-27-2009, 06:02 PM   #11
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Bring it up at closing AFTER everything has been signed. Limit your complaint to the agent sharing and LOSING the appraisal photos. Ask for a credit at least equal to the large lot premium. Move on regardless of thier response.
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Old 01-27-2009, 06:05 PM   #12
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The last time we refinanced, we got a copy of the appraisal at closing, not before. We didn't look at it closely until that evening. The photos and description for the front of our house were correct, but those for the back of the house and the back yard were for a property three houses away, almost the same color. We decided to let sleeping dogs lie.
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Old 01-27-2009, 06:19 PM   #13
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Last house we bought, the CU told us the appraisal came in significantly under what we had agreed to pay. For this reason, they insisted upon purchasing mortgage insurance. Don't recall the reasoning for the insurance, but we were going to agree to it - until we saw the appraisal which the CU shared with us at closing. Turns out the appraisal was a "drive by". I'm serious. That's how it was officially described in the documents. They got several things wrong (e.g., called the bottom floor of a tri-level a "basement"). While that might be technically true, the "basement" area was nicer than any other house I'd lived in previously.

Our realtor said "Hey, I know a bank that will give you the same rate and they're begging for customers right now." I called them (while the attending "closers" watched in horror). I got tentative approval at which time I announced. "This closing is off!" Mouths dropped open, there were stifled gasps - and then, my CU suddenly decided we didn't actually need that pesky insurance after all.

But I did still have to pay the full appraisal fee! At least you got your money's worth, Nords - if you count the time the clown (er, professional appraiser) spent looking at your place.
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Old 01-27-2009, 06:29 PM   #14
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A 'drive by' is one of the types of appraisals they can use if you are below the demnimis. The Bank I worked at would ask for a computer appraisal, then drive if the value did not make the loan, and then a full appraisal if that did not make value. All for the same $350. I think we paid $50 for a computer appraisal, $125 for the drive by and $350 for the full appraisal. As most computer appraisals made value we came out on top most of the time.
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Old 01-27-2009, 07:37 PM   #15
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To play devil's advocate, you paid for the appraisal so who else is going to complain about the quality? Too much money gets paid for poor services. You're retired, you have time to complain.
However, it is hard to complain after closing. You will probably sign a closing statement which will have the appraisal fee included. By signing off on it you may lose the right to ask for a refund.
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I had a similar situation with a surveyor when we built our house.
When I complained, I was told if I wanted to contest the cost it would delay closing indefinitely and the rate would float while we worked out the dispute.
I paid the $800...but I'm still bitching about it.
I can see how this is going to play out...

What chaps my hide the worst is the implicit coercion of delaying closing-- all over a $50-$500 squabble that's quickly wiped out by lower mortgage payments. While it's true that the bank hires the appraiser, not us, we're still paying for it! We jawboned the usual discounts on the escrow process and the title insurance, so we're still ahead of the expense game.

This home's value was about the same at the last refi (four years ago) but that was done as a no-doc refi, even including a no-cost HELOC. Spouse takes appraisals pretty personally, especially when she points out home features to the guy and he still gets it wrong. So we'll probably mark up the appraisal the way it should read and file it until the day we decide to refinance for 3.5%.

My biggest complaint is the appraiser's photo sharing. (At least he walked the entire property.) After escrow has disbursed funds and we've cashed all the checks then we'll send the bank an e-mail.

Today we're getting fussed at by underwriters using their shiny new due-diligence checklists as a replacement for logic. Any large cash transfer among brokerage accounts, money markets, and checking accounts is sniffed suspiciously to see if it's a gift or if we really have our own closing funds. (Guys, it's a refi, not a home purchase!!) We were even asked to document whether the government was really going to pay my pension this year. We've already learned to deposit more than enough money in the escrow account two weeks ahead of closing, so that the cashier's check from the "non-local" NFCU branch will clear in time. I'm just glad that I didn't have to show them last November's tax-loss harvesting in our brokerage account.

I guess the nice thing about a hefty refi appraisal is that it's not recorded nor otherwise reported to the tax authorities. So we can legally keep our mouths shut.

I'm beginning to realize yet again why we don't do this more often.

Can you tell that the surfing sucks this week?
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Old 01-27-2009, 07:50 PM   #16
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So, guess the surf's not up?

As far as sharing the photos, I am not sure how the governing agency would handle that. IMO, he definitely violated your privacy by sharing the photos. I would let the bank know that, and that you are extremely upset about it. Might even say, DW, wants you to contact a lawyer. You don't just let people on you property and photograph proprietary structures, and you do not think you should have to pay to have someone violate your privacy. Good Luck.

Just for info, the reason the bank must hire the appraiser dates back to the fall of the Real Estate Market in Texas in the 1980's. One of the problems was developers bringing in their own appraisals and the banks using them. Mostly for commercial properties, but it spilled over to Residential.
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Old 01-28-2009, 11:48 AM   #17
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Given that the surf's not up, this is what I'd do:

1. Close.
2. Write a formal letter of complaint to the bank focusing on his breach of your privacy (the photos he handed off). Ignore the other stuff. Ask for money back (1/2?) CC the Oahu Better Business Bureau.
3. Write a similarly indignant letter to the state agency that licenses appraisers.
4. If you don't get a response from the bank, file a complaint with the better business bureau.

Of course, should the swells improve, you could abandon this process at any stage.

Good luck with the refi.
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Old 01-28-2009, 01:00 PM   #18
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My appraisal was also what was holding up my refinance. Maybe all the good appraisers got out of the business when RE crashed?

Mine took a while to schedule. Lady showed up, asked SQ FT, and took pics of each room. Then walked outside a took a few pics. Was gone in 15 to 20 minutes.

I'll be closing on the last day of my rate lock! Appraisal pretty much accounted for all of the time. They say I'll get a copy of the appraisal at closing which I plan to use to file for a tax abatement.
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Old 01-28-2009, 01:02 PM   #19
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Given that the surf's not up, this is what I'd do:
Drink beer.
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Old 01-28-2009, 03:23 PM   #20
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My house didn't appraise at what I needed it to for my re-fi. I'd just chill, have a beer, and enjoy the nice weather.
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