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Shopping for value

Q: " I got a call today from a woman who had been referred to me by a mutual friend. She wanted to hire me to prepare an appraisal of her home. Of course, I asked why she needed the appraisal. The more she talked, the more concerned I became. I think I need to turn down this assignment, but wanted to get your thoughts.

She is trying to refinance her loan and said the lender sent out 2 appraisers who were not familiar with her market. Both appraisers came from too far away and they used comps that were not renovated to the extent her home has been. The first appraiser came in at $535,000 and the second came in with a value of $590,000. With online tools like Redfin, Trulia and Zillow she was able to see interior photos of the comps and in her view the "comps" selected by the 2 appraisers truly weren't comparable to her home. She asked the lender if she could hire her own appraiser and she was told they could not work with an appraisal that came from the borrower. Essentially, the lender told her they had nothing else to offer her, so maybe she should go to another lender. She is an attorney and she thinks the lender told the appraisers to come in with low values because they don’t want to work with her. She said the person she spoke to was clearly “threatened” by her knowledge of the market and that they must be used to working with borrowers who they can push around. She wants me to review the two appraisals that were done so that I can help her to prepare the complaint that she is planning to file against the 2 appraisers and maybe against the lender. I told her that I typically don't do reviews, and that I am very busy right now, but that I would think it over and get back to her. I need to decline this right? What reason can I give to her for not wanting to help?

By the way, the lady and I realized after talking on the phone for a while that we were high school classmates. "

A: Your instincts are correct. I don’t think you should accept the assignment and you should not wait too long before telling her that she will need to find someone else to help. This bothers me for several reasons. I don't know why 2 appraisers would intentionally come in with a low value to deny any borrower the opportunity to get a loan. Why would it matter to the appraisers? I don’t think lenders turn away business for no good reason, either.

This woman already has in her mind what she thinks her home is worth. If you do not come up with negative reviews on the first 2 appraisals, I am afraid she will add you to the list of "bad" appraisers and that she will file a complaint against you, as well.

I don't think it is in your best interests to take on an assignment knowing your client expects a certain outcome. She did not ask you to objectively look at the first 2 reports and to tell her if she might have an inflated view of the value of her home. She expects you to help in proving she is right and that those other 2 appraisers are wrong. Isn't this the same as if a client told you in advance what value they expected you to come up with?

If she is convinced her home is worth more, I don’t know why she is not seeking out another lender, rather than spending her time making complaints. Besides these concerns about the client expecting a predetermined value, you do not have much experience preparing reviews, she was referred by a friend, and is a former classmate. Those might be reason enough to steer clear.

You might want to suggest she hire someone who has more review experience than you have....and you should get back to her quickly.

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