TYPICAL MISTAKES BY APPRAISERS

By Kent Berk on October 26th, 2009 in BLOG, REAL ESTATE LAW

According to the FDIC, below is a list of some of the common errors by appraisers. These errors may be the basis for a lawsuit by the lender or borrower that relied on the appraisal, administrative action by the licensing authority and/or criminal charges.

• Conceals that the original client was the loan applicant
• Accepts a fee contingent on the appraisal obtaining a predetermined value
• Inaccurately describes improvements-overstates square footage and number of rooms
• Misrepresents the condition of property
• Fails to disclose extraordinary assumptions and hypothetical conditions (e.g. does not disclose that the estimated value depends on obtaining a change in zoning)
• Presents faulty analysis (e.g. uses appraisal methodology applicable for higher valued owner-occupied condos when the property is rental apartment units)
• Omits relevant information
• Includes misleading information
• Includes a series of material technical errors that will affect the credibility of the valuation
• Conceals that the original client was the loan applicant
• Fails to follow the Uniform Standards for Professional Appraisal Practice