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How to Avoid Liability Lawsuits as a Real Estate Appraiser

By: R Chandler Smith The likelyhood of a litigation is real if you are a real estate appraiser. There are lenders who are looking for scapegoats, notorious “investors” who are searching for a dupe in order to commit rackets, and finance companies who always demand you for higher values. Here are some ways you have to do in order to handle this threat.

1.) Evade it. Make yourself a less attractive mark.
2.) Movement. Convey the weight to something else such as a client or another user.
3.) . Know and make use of the legal system to your advantage; create a relationship with a competent attorney who can assist you with your business dealings to pre-avoid liability. Get an insurance agency with a good reputation to back you up.
4.) Acceptance. Don’t Deny the fact that the problem is true and get yourself insured with an insurance agency.
5.) Ignore it. Imagine it isn’t real and wish it goes away.
6.) Give it up. There are other professions that have more potential than this dangerous business.
The most common reasons for home appraiser lawsuits and legal actions are:

1.)Not able to find out and tell somebody of any development and irregularity. If you request for a duplicate of the purchase agreement, it’s best if you can get a Seller’s Disclosure form signed. Add a statement to the evaluation that shows that the appraiser has reviewed the Seller’s Disclosure Statement. Secure a duplicate of it in a work file. During inspection, ask the broker if he is aware of any mold problems. Once the check up is finished, the seller can review, answer, and sign the appraiser’s form.

2.)Miscalculation of the living area. Do not simply rely on data from the former appraiser, data taken from the multiple listing system, county records, or plans from the architect. As soon as the appraiser receives a set of plans for planned construction, the plans should be confirmed with sketching program to verify the living area size. If the appraiser waits for the final check up to verify it’s will be too late. If the subject has an addition to the living area, such as an enclosed garage/carport or veranda, this area should always be separated in the sketch and in the report – even if the area is given equal contributory value. All modifications to the living area even if the computed area remains the same should be noted separately in the report and on a separate sketch.

3.)Did not note in the report that there is leakage of the roof, wet basements, settlement, infestation of termites, and major or minor mechanical defects.

4.)Making a decision in which the property is overvalued or undervalued. Fraud is most commonly a competency issue and Errors and Omission Insurance does not protect the appraiser when fraud is found. A survey stated that approx. fifteen percent of fraud cases deal with inexperienced appraisers.

5.)Appraisal of not the right property.

6.)did not verify, that’s it. Everything in the FNMA 1004 form should have been confirmed. Evaluations should be full of verification.

7.) Libel. A review appraiser can get sued if he or she defames the appraiser rather than the report.

As a real estate appraiser, you can prevent any litigation if you are aware of the dangers regarding your appraisal and steer clear of them as much as possible.

Article Source: http://www.lifeweightloss.com

This article was written by Bill Cobb with the assistance of R Chandler Smith. Mr. Cobb is with Accurate Valuations Group and has operated as a residential 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, LA Property Appraiser. R Chandler Smith is a successful real estate whiz in the Houston Texas area. He maintains Houston Appraisers

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