I was recently reading an article online at MercuryNews.com, when I came across “dialing for dollars”. This term was coined by an appraiser being interviewed who gave light to the new trend. In the past, sellers who succumbed to desperate measures tried to butter up appraisers in hopes of get them to raise the appraisal value. Now, with the Real Estate being in such a state of distress, some sellers have become more bold in their efforts. They have turned to calling around to appraisers with a preset value in mind, trying to find an appraiser that will agree to appraise their property at the amount.
What used to be a rare occurrence is quickly becoming a more common practice among homeowners. In a national survey of appraisers conducted by October Research, an alarming 90% reported that they have been experiencing pressure. Appraisers also reported that they declined 48% of work because of experiencing pressure to restate, adjust or change property values.
Although getting a high appraisal value may seem like a fix to the seller’s problems, it only deepens the wound in the housing market. After a property is given an inflated appraisal value, it is then sold to the next owner. The new owner is now in the same position as the last, stuck with a loan much higher than the value of the home. In times like these, it is even more important that we as appraisers practice at the highest ethical standards. Not doing so just perpetuates the problems that the Real Estate market is facing today.
data source: home appraisers pushed to inflate values; exaggerated numbers sought to help desperate homeowners; by pete carey; mercury news; article launched: 10/02/2007 01:31:35 am pdt