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As an appraiser in the real estate business, the threat of lawsuits is real. There are lenders who are looking for fall guys, notorious “investors” who are searching for a suckers in order to carry out scams, and mortgage companies who constantly demand you for higher values. Here are a few ways you have to do to handle this danger. 1.) Evade it. Be a less attractive mark. 2.) Reassign it. Shift the liability to somebody else, such as the client or the purchaser. 3.) Cope with it. The justice system is your ally; employ it to your benefit. Get an insurance company with a good reputation to support you. 4.) Acceptance. Don’t Deny the fact that the threat is true and have yourself insured with some insurance company. 5.) Ignore it. Assume it never occurred and hope it never will. 6.) Throw in the towel. There are other promising professions than this risky business. The most familiar reasons for real estate appraiser lawsuits and legal actions are: 1.) Failure to discover and report improvement and site flaws. On purchase appraisals, it’s an excellent idea to obtain the Seller’s Disclosure forms which have been signed when requesting a duplicate of the purchase agreement. Don’t forget to note that you, as the appraiser, have read and reviewed the Seller’s Disclosure Statement. Ensure that you get a duplicate of the Seller’s Disclosure Statement. At the time of inspection, ask the broker if they are aware of any mold problems. The appraiser can also present the seller with the appraiser’s own form for the seller to review, answer, and sign. 2.) Erroneous calculation of total living area. When on an assignment, the appraiser should not rely on what’s in the MLS system for living area, the former appraiser’s sketch, an old survey, and the county records stating the living area or the set of plans from the architect. If the appraiser obtains a set of details for planned construction, the details should be confirmed with sketching program to verify the living area size. It would be too late if you will wait for the data gathered after the final inspection. If the subject has an addition to the living area, such as an enclosed veranda or garage/carport, this should always be separated in the report and in the sketch – even if the area still has the same contributory value. Any changes to the living area even if the calculated area remains the same should be indicated separately in the report and on a separate sketch. 3.) Failure to report leakage of the roof, settlement or foundation cracks, basements that are wet, termite infestation and mechanical defects. 4.) Reaching a decision in which the property is overvalued or undervalued. You are likely to deceive if you don’t have the required skill and Errors and Omission will not protect you if found guilty. A survey stated that approx. 15% of all fraud cases deal with inexperienced appraisers. 5.) You are appraising the wrong house. 6.) You didn’t verify. Everything in the FNMA 1004 form should have been confirmed. Verification should be the main duty when doing an appraisal. 7.) Defamation. The review appraiser humiliating the appraiser instead of the report itself, thus the defamed appraiser files a lawsuit against the review appraiser. As a real estate appraiser, you can prevent any litigation if you are aware of the pitfalls regarding your appraisal and avoid them as much as possible.
Article Source: http://www.articletap.com
This article was written by William Cobb with the assistance of Chandler Smith. Bill operates Accurate Valuations Group and has performed as a home appraiser for 15 years now primarily in the Greater Baton Rouge, LA market area. For more information on William Cobb and Accurate Valuations Group, visit Baton Rouge Home. Chandler Smith is a top real estate professional in the Houston Texas area. He manages Austin Home Appraiser
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