Conservative or Agreesive or what?

Clients often categorize their appraisal company or appraiser as being conservative or aggressive and distribute orders based on this criteria with the rational "he will get the number" or "he got me $20,000 more then I needed on my last deal". When using this logic one thing that must come to mind is how is an appraiser conservative or aggressive?

All appraisers basically have the same information and have to go by the same basic guidelines so why did one appraisal company appraise the home for $340,000 and another company appraise it for $375,000? The one for $375,000 must be better!

From my experience the majority of the time this is not the occurrence.

Example: A subdivision of townhomes built about the same time by the same builder with the same basic design.Their are 5 recent sales that are all similar to the home that sold between $330,000 - $350,000 which in most cases is a normal range for a market area.

So what makes the appraisal conservative or aggressive?

NOW THIS IS A TOTAL HYPOTHEICAL SITUATION:

A conservative appraisal would be in the $325,000 - $335,000 range. A clean appraisal would be $340,000 - $345,000 and an aggressive appraisal would be $345,000 - $355,000. All values within a reasonable justification based on the condition amenties of the property and if the appraiser explains it correctly their is no "more right" value.

What is not aggressive and when has the apprasier crossed the line?

If an appraiser appraised the property for $375,000 ignored the closets most similar sales and used town homes from an outside subdivision with much superior design and amenties and didnt mention it or make adjustments. That's not aggressive that FRAUD.

But the bank took it?

Yes that's true and when I was 10 I stole a candy bar from Safeway and didn't get caught. But that doesn't make it right or something that should be looked upon as good. Using an appraisal company or an appraiser that you knowingly inflates values puts you in the same class as someone who took a gun to the bank and robbed it because that's essentially what is taking place with the lender.

Now is their going to be times where the bank takes the overinflated appraisal? YES.
Is teir going to be times where this appraiser saves the deal? YES.
Is this appraiser eventually going to get caught? YES.
Is he going to get sued? YES
Is he going to get blacklisted from all of the lenders your work with? YES.
Are you going to have to get an another appraiser? YES
Is your company going to be associated with bad and fraudulent pratices YES.

At Coester Appraisal Group we have stopped working with clients because of the constant pressure to over inflate values or the client being known for SHADY activity within the market place. On several occasions when speaking with underwriters or account executives they would make comments like "these guys are always trying to get something through","every time I get an appraisal from this broker i look over it very carefully because I know they have bad appraisers" or other similar related statements. So we chose the high road and would rather not do business with them.

Now some would say who cares its not my license, I don't know anything about appraising as long as they get the value its not my concern. There is some truth to that but by associating yourself with them its puts you in the same class as them and your as bad if you did it yourself because your aware of whats going on.

So what should i look for in an appraiser?

You want someone that is professional, ethical, rational, honest about whats a realistic value for the property and able to support the value even when it comes under scrutiny (because all values conservative or aggressive will come under fire).

If you can find an appraisal company that when the appraisal gets reviewed and cut by $50,000 and your appraiser can get the bank to reverse the cut and go with the original value you have got yourself a good appraiser because that is very hard to do and underwriters hate to do it.

Their are several good appraisals companies you can choose but I have seen what's out there and truly believe Coester Apprasial Group is the best possible appraisal company you can work with.

Being in the appraisal business since 1970 with over 50,000 appraisals completed you could not ask for a better fit. With a in house appraisal staff covering all of Maryland, DC and Virigina and an appraisal Network covering all 50 states Coester Appraisal Group is your one stop shop for all of your appraisal needs.

Please give us a call toll free at 888-485-1999 or e-mail us at info@coesterappraisals.com