Appraisers fire back at brokers

Appraisers fire back at brokers

Appraisers fire back at brokers Real estate appraisers took to the comments section of MortgageBrokerNews.ca to explain -- and defend – the appraisal process following critical comments from mortgage brokers.

“It is not the appraiser’s job to ‘come in at the purchase price’ or ‘fill in the amount you need.' It is their job to provide an unbiased opinion of value supported by the market data available,” Matt Cook, a certified appraiser said in the comments section of MortgageBrokerNews.ca. “They are usually the only unbiased party in the transaction; if you want to know what happens when appraisers (sell) themselves to give you the value you want, look at the mortgage meltdown that happened below the border.”

The remark was in response to accusations by mortgage brokers that appraisers’ values are inaccurate.

“Appraisals aren’t coming in at the proper value; they’re not coming in at purchase price,” Anthony Ambrosio of CSI Mortgages told MortgageBrokerNews.ca at the time. “The appraisers look at market data that is old – they’re always looking backward and not forward.”

Not to be left out, the Appraisal Institute of Canada’s CEO, Keith Lancastle, took the time to explain the appraiser’s process.

“To provide a reliable market value, AIC-designated appraisers consider a number of factors, including past sales. Current market conditions are also taken into account in the analysis of the information and in the preparation of the appraisal,” Lancastle said. “Adjustments are made to the sale price of the comparable properties based on market-derived elements of comparison.

“An opinion of value, either a single value or a range of values, is arrived at by reconciling the adjusted sales prices of the comparable properties.”
 
 
12 Comments
  • Angela Wong-Liao - Invis Inc 2014-06-23 11:08:58 AM
    I fully agree that the appraisal value must be unbiased and fully utilized all the comparable data to provide a fair market value. It is especially important at this time as the market is moving fast. Lenders are relying on the appraisal value to lend, especially in a refinancing situation. In view of the hot market in Toronto now, some properties are sold over the asking price and the purchaser should be fully aware of the potential risk if the property does not appraised at sold price.
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  • Brad Currie 2014-06-23 11:16:03 AM
    A big reason why we have 3rd party appraisal services is lender's concerns over brokers having appraisers in their "back pockets". Let's be careful what we wish for. An appraisal is an opinion of value. Second opinions are available.
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  • Vince Gaetano 2014-06-23 11:25:59 AM
    Consider the comment by the broker,

    "...Appraisals aren’t coming in at the proper value; they’re not coming in at purchase price,” Xxxxxxx of XXX Mortgages told MortgageBrokerNews.ca at the time. “The appraisers look at market data that is old – they’re always looking backward and not forward...”

    I don't believe there is a complete understanding of what role the appraiser has in the process by the mortgage agent who made the comment. Appraisers do not forecast where values are going....

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