Know When to Say No

In certain situations, it's very important for a licensed real estate appraiser to "know when to say no" to a specific appraisal assignment. However, saying no may be harder than it sounds. This is especially true when there are bills to be paid and clients that need appraisals. For instance, it may be difficult to say no to a long time client that sends appraisal requests on a regular basis.

Knowing when to say no is common practice among business owners in all professions. For example, tax accountants may loose their license if they choose to ignore specific tax laws. The same is true for appraisers. When put in a difficult situation to ignore important appraisal guidelines, appraisers must decide between right and wrong practice.

There are instances when a mortgage broker, real estate agent, and/or individual will put pressure on a real estate appraiser to reach a certain value (to enable a "deal" to go through). This may be especially true in a slow real estate market. In a slow market, additional pressure to arrive at certain values exists because of limited deals. Appraisers may even be threatened with the loss of future business. Others may be offered incentives such as cash if a target is met.

Complimentary Request for Appraisal Form (PDF Format)

Licensed appraisers follow the Uniform Standards of Professional Appraisal Practice (USPAP). "They are the generally accepted standards for professional appraisal practice in North America." USPAP contains standards for all types of appraisal services, including real estate. Appraiser disciplines for violating laws may include a fine, suspension, and/or revocation of a license. Appraisers will not only loose their respective license if they do not know when to say no, but their livelihood as well.

Appraiser Review Checklist

The following list may help you determine if your appraisal will be reviewed by a third party.

1. Appraiser on lender Watch List.

2. Subject property has many recent transactions (within 2 years).

3. If #2 applies, has there been an unusual increase in value.

• More than 15%

4. Two of three comparable sale dates longer than 6 months.

5. Two of three comparables differ in "Living Area +-20%," bedroom count, age, or lot size.

6. Two of three comparables differ in condition, quality, and/or appeal.

7. Adjustments made to comparable sales are excessive.

• Line items more than 10%
• Gross amount more than 25%

8. Two of three comparables are distant.

• Urban - greater than 1 mile (some case .5 miles)
• Suburban - greater than 2 miles
• Rural - greater than 10 miles
  

Attention All Licensed Real Estate Appraisers

If you are a licensed real estate appraiser, please remember that the client has come to you because you are the experienced appraiser. If a client does not want to take no for an answer on a specific assignment, it is up to you to know when to say no.