Are appraisers milking buyers for "re-inspection fees"

Are appraisers milking buyers for "re-inspection" fees. I have found that in my recent experience this is a game that a lot of the dirtbag appraisers play. When the bank orders an appraisal in order to obtain a mortgage, the appraiser purposely and knowingly leaves out pieces of information the bank is going to require. They give themselves an excuse to have to re-inspect the property because you are picking up the bill. Any experienced appraiser knows what the banks are going to want to see in their reports. They should have included it in the report the first time. What do they care? The borrower is picking up the tab, right? As a purchaser I have no recourse if I want the deal to go through because I am at the will of the appraiser and the loan underwriter. So thank you, Streetlinks, appraisal management companies and appraisers on behalf of other potential homeowners that have had deals fall through because of appraisers.

This is all too common working with appraiser management companies like StreetLinks, the company I am stuck working with right now. I welcome them to respond to this post if that is not the case.
  • December 20 2011 - Walnut Creek
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Answers (18)

Nobody likes to have to have an appraisal re-inspection, as well as the fee that goes along with it.  The most important thing to make sure of, to try to avoid these scenarios is to make sure the property has the legally required smoke detectors and CO2 detectors, and that they are working, up front.

If it's a purchase and you and your agent don't see these in your initial walk-through, make sure your agent makes this known right away,
  • December 08 2014
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We see this all the time.  There are many reasons for a second look at homes.  I am sorry that you feel this is not necessary, yet if you want the loan you will have to go with it.

I wish you the best!
  • December 06 2014
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Profile picture for RealEstateCrew
I feel this question is still happening today, its is wrong, but I feel it is happening. 
  • December 06 2014
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That is an excellent question and I will have to say that I have seen times when reappraisals done but in my opinion weren't needed if the job had been done right the first time. With that being said I will have to state that most appraisers that I have worked with seem to really try hard to complete their task the first time. As with any profession unfortunately there will be a few bad apples but as a whole at least here in Louisiana I find them to be competent and proactive. Happy house hunting!
  • December 06 2014
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Profile picture for user4080049
I was told in April of 2014 that the government ;passed a bill effective Jan 1,2014 that Banks cannot pick their Appraisers anymore that  they call a National phone number and the they get whoever the Company sends out. Our loan officer told us that.
  • December 05 2014
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We were charged a "complex" appraisal fee until be objected to our lender. Appraiser spent little time on property and had the nerve to ask is if we thought we paid too much for the house 3 years ago. Amazing! Appraisal was extremely low much lower than we paid for home 3 years ago.

I just did a 700 sq ft home in Malibu..... I spent little time there also as it was a small home..... but that home WAS a complex appraisal assignment - simply because the average Malibu home size is 3200 sq ft, not 700 sq ft.

I did not ask nor receive an increase in my fee - $315 - BUT I should have.... it was a nightmare. And took two weeks AFTER the lender asked for 22 conditions on the appraisal I submitted. It ultimately was declined by the lender.

Its not my fault the home was 700 sqft, but it WAS a complex assignment...I would not blame the appraiser - we simply work for the lender.

Oh yes - and I also did ask the 'owner' about the previous purchase price. Thats common practice, appraisers have the license to ask all sorts of questions, that is what is needed in the appraisal process...

Sorry the appraisal came in lower than your purchase price three years ago. That really is not common for my area, but I dont know what your area is....Sounds like you are more pisssed at that than anything else....

If you dont like the appraiser and/or appraisal, simply SWITCH lenders.... The appraiser - and the appraisal and the entire process - is dictacted by the LENDER.... so asking that lender for a new appraiser or appraisal probably wont help, youll need to apply elsewhere, which typically means an 'easier' lender which translates into higher interest rates and higher fees IMHO...

Good luck !


  • December 05 2014
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Profile picture for marinemommissesu
We were charged a "complex" appraisal fee until be objected to our lender. Appraiser spent little time on property and had the nerve to ask is if we thought we paid too much for the house 3 years ago. Amazing! Appraisal was extremely low much lower than we paid for home 3 years ago.
  • December 05 2014
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This topic of milking buyers by appraisers is not to my knowledge happening in Louisville, Ky.
  • January 02 2012
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AMEN, Vince!!! Thanks for joining the thread. The fact is that I know of no one who is trying to "kill deals" today...most of us are not "Rolling in the Deep" with Adele and are fighting tooth and nail to help consumers buy, sell or refinance properties and agents to assist their clients.  

Frankly, there is no room (IMHO) for the "throw them under the bus" type of comment that was made previous to your comment.  Best to you!
  • December 21 2011
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@Shawn

Yes, it happens all the time. appraisers are doing their best to kill deals nation-wide and earn themselves additional money.

 In reporting accurate values, sometimes we do 'kill deals' because many people own more than a home is worth. I sometimes do 'kill a deal', because HVCC keeps me from 'comping out' properties as we used to do to give the mortgage broker a heads up. In 'killing a deal' I peronally am more concerned about the homeowner losing their home than a mortgage broker getting a commission. It isnt fun to 'kill a deal' because no one wins, and everyone loses. And in 'kiiling a deal' no 're-inspection' is ordered, so Im not sure what that has to do with it. And for my clients, if I purposely 'kill deals' I end up with no work, dont know where you think its the opposite....
  • December 21 2011
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Dave,  It is very rare to see a frivolous request for a re-inspection, IMHO.  First, the lender/underwriter makes the determination for the re-inspection, desk or field review and/or second appraisal.  If there is an error or omission on the initial report the underwriter will requre a correction, not a re-inspection.  If, however, any work needs to performed on the property, there will always for a request for a 442 (re-inspection) to verify that the work was done to code, by permit (if required) and to provide photos for the final underwriting of the transaction.

@Shawn, IMHO, frivolous comments that suggest ALL appraisers (lenders, agents, title company's...take your pick) are purposely going out of their way to sabotage real estate transaction is counter productive to the goals of the advice columns on Zillow.  After all, we are trying to help consumers understand the process; not convince them of impossibility of the sucess.  

Frankly, I have not had many appraisal issues.  But, perhaps the listing agents I work with know how to properly price a property and the buyers agents know how to educate their clients on the correct offers for success.

Dave, I wish you success on your transaction.  

  • December 21 2011
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yes, it happens all the time. appraisers are doing their best to kill deals nation-wide and earn themselves additional money.
  • December 21 2011
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Profile picture for ExpectFirstClass
Dave - Interesting note.  The only time I see appraisers need to come back is when agreed-upon items were written into the Purchase & Sale contract, i.e. the electric sub-panel was found to have double-tapped circuits and the owner agreed to fix.  If that agreement to fix was placed in the Purchase & Sale agreement (I'm speaking for MA), then the lender will likely require a re-inspection be done at the Buyer's expense.  Some items we'll have the attorneys write up into a side agreement that is not part of P&S so the Buyer isn't hit with re-inspection fees.

Good Luck,
Ryan
  • December 21 2011
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Dave- Thank you for your acknowledgment and understanding. Happy holidays.

Happy funding,  Rudi
  • December 21 2011
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Profile picture for Ofe Polack
Without knowing was item(s) needed to be reinspected, I do not know that any of us can contribute anything to your comments.  If I were to feel that something was not done on the first visit that should have been done, I would refuse to pay for a second visit, because it was obviously the mistake of the appraiser.  Please, let us know exactly what was left out on the first visit!
  • December 21 2011
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I dont work for StreetLinks, but I can tell you my story...

When the bank orders an appraisal in order to obtain a mortgage, the appraiser purposely and knowingly leaves out pieces of information the bank is going to require. They give themselves an excuse to have to re-inspect the property because you are picking up the bill.

Re-inspections are only required in rare instances usually when an item is NOT complete, ie new construction. I never get paid extra for a re-inspection, but maybe StreetLinks is, I wouldnt blame the appraiser. Do you know 100% the appraiser got the full re-inspection fee ? Or did it end up in StreetLinks' pocket.

WHAT exactly was the re-inspection for ? I would be curious. New construction or what ?

Note many AMCs get a good chunk of the total appraisal fee, read this.

If the appraiser TRULY is coming up with bogus items to make a bigger fee, feel free to contact the California OREA and file a complaint. Thats the only way to knock out un-ethical appraisers out of the field.

This is all too common working with appraiser management companies like StreetLinks, the company I am stuck working with right now.

This is the bad system we have right now, and StreetLinks is simply one of the actors. We actually dont need StreetLinks, nor any AMC, doing the work the lender should be doing. Lenders have less 'skin in the game' by using AMC's, and hence IMHO we will end up with another, and worse housing crisis 'next' time.




  • December 20 2011
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Rudi,
You are probably right that this is most likely one bad apple in the bunch and should not reflect against Street Links.

I did thoroughly discuss items about the property prior to the appraiser coming to the property. It seems pretty clear that the appraiser wanted an excuse to come back out to the property.

I appreciate your response.
  • December 20 2011
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Dave- In my opinion Street Links appraisers perform excellent appraisals. In the past year or so I have ordered about 15 appraisals from them, none came in with questionable appraisals. Also most of those loans required 2nd appraisals, due to their loan amounts. None of those had any problems. I would not hesitate to use Street Links again.

Unless you can throughly document your remarks about incompetency or trickery, which could be construed as slanderous, if you don't have a attorney friend that will perform their services for you pro bono. nor have unlimited funds for litigation, I suggest you be very careful about any negative remarks you make on a forum as Zillow and will remain on search engines for eternity. Best wishes.

Happy funding, Rudi
  • December 20 2011
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