Who Does the Appraiser Work For?

who does the appraiser work for an atypical rant from the housechick (begin atypical rant from the Housechick)

There was an article in the current issue of Broker Agent magazine for the Tucson and Southern Arizona area - admittedly a pithy publication, thinly disguised ads posing as real content, for the most part, with occasional interesting articles.

The article is about a new survey that shows 90% of appraisers feel pressured to “hit the number,” meaning they feel pressured to return an appraisal for the sale price of a home.

Of course, the point of the article seems to be to get you, the home buyer, to call your lender and request an appraiser that has been accredited by the organization who wrote the article, so there’s little actual information.

The first thing that stands out is that they call appraisers the ONLY independent objective third party involved in a real estate transaction.  (If you’re neutral, then you shouldn’t respond to pressure anyway, right?)  But let’s give the writers the benefit of the doubt here - maybe this article was written for a state where they do not use an Escrow account.  By definition, escrow involves a neutral third party. 

Regardless, here’s what really bugs me.  One of parts of the article selected for the big font highlights is “Homebuyers should ask their lender for a copy of the appraisal report.  It is a consumer’s right under federal law.”

Okay, remind me again, who typically pays for the appraisal?  Oh yeah - the BUYER.

And who gets a copy of it?  Oh yeah - the lender.

And who has to make a request to receive a copy?  After they paid for it?  Is there a disconnect here or is it just me?

Some of the lenders I’ve worked with given a copy of the appraisal to my buyers without a formal request, typically mailing it out to my clients after closing or bringing a copy to the signing table.  Every once in a blue moon, my buyers receive an email copy from the lender as soon as the lender has it in hand.

Is that enough though?  If appraisers feel pressure to hit the sales price, who gets to say whether they performed in a neutral manner or not?  Our contract states that the house has to appraise for at least the sales price by an appraiser acceptable to the lender - who, as far as I’m aware, doesn’t have fiduciary duties to the buyer.  So the buyer pays… for something that has to be acceptable to the lender… and not for something or someone acceptable to them?

Who does that appraisal really protect?  The buyer or the lender?

What percentage of appraisals come back at exactly the sales price?  80%?  90%?  You know the appraiser usually has a copy of the contract in hand when they do the appraisal, right?  Is that appropriate?  Are we looking for an actual value or are we just mitigating risk for the lender at the Buyer’s expense?

Sheesh…

(end rant)

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Equal Housing Opportunity Realtor
Applied Real Estate Technology