Sound Off!!

Have we gone from routine over-appraisal to routine under-appraisal?

Dear Henry:
I am not a real estate professional, but a homeowner. Recently, I witnessed a spasm of over-appraisal of real estate, caused by appraiser eagerness to please the banks during the real estate bubble, followed by what the newspapers have proclaimed as a "correction," in the post-bubble-pop period.

I now have reason to doubt that any such "correction" actually has occurred. A real correction of this spasm of over-appraisal of real estate, would have required the appraiser to transit from dishonesty toward honesty. Instead, in my personal evaluation, based upon what I have personally witnessed, what has occurred is that the appraiser has transited directly from dishonesty-one-way to dishonesty-the-opposite-way. What has happened is that the appraiser, who had been overeager to suck up to the bank by over-appraisal, has become overeager to suck up to the bank by under-appraisal. That's equally dishonest, and not something to be proud of.

It has been proclaimed, in the newspapers, that in order to correct the previous tainted situation, the banks have distanced themselves from the appraisal industry. Now, supposedly, that problem has been coped with, because banks no longer have direct contact with the appraiser who is chosen.

However, in my view, the only thing that has changed is the banks have changed the sort of dishonesty they require now to under-estimate dishonesty. From my perspective, this creates a very negative attitude toward your profession.

Austin Meredith
Durham, NC

Dear Austin,
Appraiser independence is a problem that has plagued the appraisal profession for as long as I can remember.
(I became an appraiser in the 1960s).

The largest national appraisal organization gave appraisers designations in recognition of their education and experience, the MAI -- which soon became called by some "Made As Instructed".

The profession continuously lobbies for legislation that prohibits trying to influence the outcome of an appraisal to stop the problem. In my opinion, based on human nature, the problem is always going to exist. Appraisers are human beings, and their well-being depends upon satisfying their customers.

I don't think they are different from other professionals who also try to satisfy the patients, clients and bosses.