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As an evaluator in the real estate world, the threat of litigation is a very real one. There are lenders who are searching for fall guys, shady “investors” who are searching for a dupe in order to carry out scams, and mortgage companies who constantly demand you for higher values. There are only a few methods on how to cope with with this risk. 1.) Avoid it. Make yourself a less attractive target. 2.) Shift. Transfer the liability to somebody else, such as the customer or the purchaser. 3.) . Understand and apply the legal system to your benefit; build a connection with a competent attorney who can help you with your dealings to avoid beforehand any liability. Get an insurance agency that is highly regarded to back you up. 4.) Accept it. Accept the fact that the threat is true and get yourself insured with an insurance agency. 5.) Turn a deaf ear. Pretend it isn’t real and wish it goes away. 6.) Give it up. Change your career to one that is less adversarial. The most familiar reasons for real estate appraiser lawsuits and legal actions are: 1.) Failing to determine and report enhancement and site flaws. When you request for a duplicate of the purchase agreement, it would be best if you can get the signed copy of the Seller’s Disclosure form. Do not forget to note that the appraiser have read and reviewed the Seller’s Disclosure Statement. Keep a duplicate of it in your work file. When the time comes to examine the house, keep in mind to discuss with the seller if there are problems about molds. When the check up is complete, the seller can evaluate, answer, and sign the appraiser’s form. 2.) Incorrect computation of total living area. Do not simply rely on information from the former appraiser, data taken from the MLS system, county records, or details from the architect. Any construction details of the living area should be confirmed using a sketching program. If the evaluator waits for the final check up to verify it is too late. If the seller has something to add to the living area, like an enclosed porch or carport/garage, this area should at all times be separated in the report and in the sketch – even though the area still has equal contributory value. All changes to the living area even though the computed area remains the same should be indicated separately in the report and on a separate sketch. 3.) Did not report roof leakage, settlement, basements that are wet, termite infestation and mechanical failure. 4.) Overvaluation or Undervaluation of a property. You’re likely to deceive if you do not have the required skill and Errors and Omission won’t protect you if found guilty. Appraisers who are inexperienced with their responsibilities and duites are prone to be charged with fraud. 5.) Appraisal of wrong real estate. 6.) You did not verify, period. Consists of items of the entire FNMA 1004 form such as utility hookups, zoning, lot dimensions, County assessments, the right owner of record, subject’s history (both listing and sales), etc… Evaluations should be loaded with substantiation. 7.) Insult. A review appraiser can be sued if he or she defames the appraiser instead of the report. As an appraiser you can never fully get rid of the weight of liability for your appraisals but by being conscious of and avoiding these hazards you may be able to prevent any costly litigation.
Article Source: http://www.articletap.com
This article was written by Bill Cobb with the assistance of R. Chandler Smith. William is with Accurate Valuations Group and has been licensed as a house appraiser for 15 years now primarily in the Greater Baton Rouge, LA area. For more information on Bill Cobb and Accurate Valuations Group, visit Baton Rouge Louisiana Appraiser. R. Chandler Smith is an established real estate whiz in the Houston area. He maintains Austin Home Appraiser
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