Dealing with Unhappy Buyers as an Appraiser
Q: "
Being an appraiser can be challenging. I understand that not everyone will be happy with my reports, but I was surprised when a buyer called my office screaming that my appraised value was too high. She even filed a complaint with the state board within minutes of receiving the appraisal.
The property in question is in a neighborhood where listings are rare. When it hit the market, it was clear that it would receive multiple offers above the list price. The buyer’s offer was accepted at $10,000 over the list price within two days.
I thought the list price was a bit low and that the agent may have been hoping for more of a bidding frenzy. I couldn’t find comps within blocks of the subject property, but I found similar sales built by the same builder and had no trouble supporting the contract price.
The borrower accused me of not knowing what I was doing. She expected me to know the market and give her the opportunity to show the seller that he had to be reasonable. I’m not sure what she meant by that - what do you think?"
A:
Sometimes buyers/borrowers make full price or higher offers on properties they believe are overpriced. They may assume that the appraisal will come in lower and that they can use it to negotiate a lower contract price with the seller. When their plan doesn’t work out, they may become angry.
However, their strategy often fails anyway. There may be backup offers or the seller may be willing to relist the property and not negotiate, foiling the borrower’s plan.
As an appraiser, all you can do is provide an objective and well-supported opinion of value. If you receive a state board complaint, make sure to notify your insurer as there may be coverage under your policy for assistance of counsel if needed.