Bad appraisal for VA loan - complaint filed/restitution

When we were in Oklahoma, the VA appraiser did a bad job to put it simply. We filed a complaint w/ the Oklahoma Appraisers Board, as well as the VA. Yesterday, the appraiser called me and stated flat out he made a mistake and wants to make it right. I'm frankly unsure what "right" is at this point.

The house was erroneously listed at 1896sqft, and the appraiser reported that as the accurate GLA, and was purchased for $200,000; this subtends to 105.48sqft. We always knew it seemed smaller than that, but neither our realtor nor us knew how much smaller at the time, and with the detached shop, a lot of stuff was out there so it never felt like we were out of room. When we went to sell to move back, the realtor we used suggested we get a new appraiser out to measure. That measurement revealed a GLA of 1257, so we now have a phantom 639 sqft. Essentially, the 1896 was accounting for the attached garage as a factor into GLA, which is incorrect.

Meaning, based on the price per square foot, we should have purchased for ~$132,588.

Additionally, the appraisal report listed incorrect layouts, non-existent outbuildings, etc. We were not able to see the appraisal within our contestable window, as it was being held up by either the appraiser or the loan officer, so the incorrect diagrams and outbuildings was unknown to us until it was too late.

Translation? the appraiser approved/appraised incorrectly, and the VA should have never approved the loan.

So now we have a roughly $-67,411 difference in value, as far as I can tell.

The appraiser said he made a mistake about 17 times on the phone and kept reiterating wanting to make it right, but I dunno that he has crunched numbers.

I also don't know if the VA would be happy about me talking to him. I need to call the regional loan center and ask if I am able to even discuss things with him. There is no lawsuit, at least at this point.

Anyone ever seen something like this before?

Anyone have an idea about how the "restitution" would be handled?

I have no experience with this, but it's certainly an interesting situation. I'm interested to see if anything comes out of this.

Tough situation, and while a lot of blame is certainly on this guy. I'm not sure that there isn't at least some element of you bought it and happy at that price, cavaeat emptor kinda thing. Did you buy based on cost/sq ft? Because at least with folks shopping residential neighborhoods, you see everything going for X price roughly, I dont think there's much quibling over the price if it's reasonably the same in the area.

A rural property that deal with far more intangibles such as outbuildings etc, certainly could be harder to figure out reasonable cost since it's not just one in a strip of 40 houses.

Unfortunately no advice, if it was colorado could probably still sell for a little overpriced and be fine, but I bet the OK market isn't hot exactly.

I would assume the appraiser works on contract, either with you, your realtor or the VA, right? So....if there's a contract, I'd want to look at it and see what it says since it's likely to control what happens should one party or the other breach his obligations under the contract.

If the appraiser has E&O insurance, that could come into play I suppose.

Interest in the outcome. I've got no guesses or estimations on to what extent the appraiser is actually liable or for what $. I can also imagine certain arguments that could theoretically be made to support mitigation (failure to mitigate) if it went legal, but every case is always going to have a unique, unpredictable outcome.

My only thought is to try to avoid a case if you can... lots of trouble and headache even if you have a winner. If they are willing to settle for less, I'd personally seriously consider it if I were in your shoes, but YMMV.

Is the house already sold? I assume that it isn't.

Somebody really screwed up by allowing the financing to proceed. Is there an appeals or arbitration process?

Very interested to see how this plays out, please keep us posted!

Seems like E&O should cover something here... what that is I am not sure. I could imagine the coverage would tend to try and at a maximum simply cover the incurred loan costs of the "overage"?

I would ask the appraiser (and show no intention as to what you want to proceed towards) what your full array of options are... you may find out interesting things that you would not find further up the food chain.

In the sales offer for the house what was the square footage listed at? What is the average and some standard deviations on cost per square foot in that neighborhood for similar builds?

Seems to me that you need to prove some kind of fraud to you, some misrepresentation. That you got a VA loan doesn’t seem to be consequential to me, it’s that you didn’t get what you were offered. If you can prove that you made that offer based upon that appraisers numbers you’d have a pretty good argument. But if you had already decided to buy it at that price before he did his appraisal, that would weaken your argument a bit.

Really interesting.

Wow, what a cluster

Best bet is to consult a real estate lawyer licensed in OK and with experience.
Each state has their own structure and rules.
Is the appraiser licensed and required to have Errors and Omissions insurance?
Did the appraiser work for the mortgage company?
Does the contract to buy and sell list the square footage?
Lots of questions that requires someone expert in Oklahoma real estate.
I am very interested in the result of this.

Will try to knock out all replies at once.

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Originally Posted by fitz19d

Tough situation, and while a lot of blame is certainly on this guy. I'm not sure that there isn't at least some element of you bought it and happy at that price, cavaeat emptor kinda thing. Did you buy based on cost/sq ft? Because at least with folks shopping residential neighborhoods, you see everything going for X price roughly, I dont think there's much quibling over the price if it's reasonably the same in the area.


A rural property that deal with far more intangibles such as outbuildings etc, certainly could be harder to figure out reasonable cost since it's not just one in a strip of 40 houses.


Unfortunately no advice, if it was colorado could probably still sell for a little overpriced and be fine, but I bet the OK market isn't hot exactly.

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There were not a lot of comps in the area, so valuation was something that we, personally, weren't up on; however, a discrepancy of this nature is a big deal not just to the VA but also for the appraiser because it means he didn't actually do his job -- hence his panicked phone call to me upon notification of the complaint being filed, and upon relooking at the file realizing he basically screwed the pooch in a bad, bad way. The post-sale appraiser who confirmed the mistake is also on the Appraiser Disciplinary board for OK and was adamant we file a complaint due to the complete lack of due diligence on the part of the original appraiser. If it were a residential situation, yeah, we would have known something was off. My "satisfaction" with the property in ignorance is immaterial, though. The way the VA approaches things is to protect the buyer as much as the VA; they backed an overvalued property due to the appraiser's mistake. It could be a cardboard box covered in dog shit for $300k, and my personal desire/happiness/etc. for the property is immaterial where the VA is concerned. The entire point of the appraiser is to determine the proper value of the home. When a VA loan situation finds a discrepancy in value vs listed price, they will either deny the loan entirely, or only back the appraised amount. He failed, miserably, as it way overvalued the property with the incorrect GLA for the house itself.

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Originally Posted by Gman

Somebody really screwed up by allowing the financing to proceed. Is there an appeals or arbitration process?

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Yes, we have filed a complaint through the VA Regional Loan Center (in this case, Houston covers Oklahoma). Trying to get more clarity through them on what our personal abilities are in this process. Would prefer not to involve a lawyer, if possible.

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Originally Posted by oinco

Very interested to see how this plays out, please keep us posted!


Seems like E&O should cover something here... what that is I am not sure. I could imagine the coverage would tend to try and at a maximum simply cover the incurred loan costs of the "overage"?


I would ask the appraiser (and show no intention as to what you want to proceed towards) what your full array of options are... you may find out interesting things that you would not find further up the food chain.

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I'm happy to work with the appraiser and possibly his insurance on making it right. I just am waiting on word from the VA as to if I am allowed to talk with him outside of their involvement/arbitration/mediation.

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Originally Posted by FromMyColdDeadHand

In the sales offer for the house what was the square footage listed at? What is the average and some standard deviations on cost per square foot in that neighborhood for similar builds?


Seems to me that you need to prove some kind of fraud to you, some misrepresentation. That you got a VA loan doesn?t seem to be consequential to me, it?s that you didn?t get what you were offered. If you can prove that you made that offer based upon that appraisers numbers you?d have a pretty good argument. But if you had already decided to buy it at that price before he did his appraisal, that would weaken your argument a bit.


Really interesting.

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1896sqft was the listed; 1257 was the measured post-sale. We knew it felt smaller, but it was an older house and having lived in an older house before they sometimes seem small, but aren't due to use of space vs the more modern "open" feel; in short, we had nothing official to use for negotiations, since our own appraiser royally screwed up. We brought up the issue of it seeming smaller than listed with our realtor's assistant, but had no proof given the bad appraisal and the fact that the appraiser went with listed GLA instead of actually measuring, like he is required to do.


No neighborhood. Rural property.


"But if you had already decided to buy it at that price before he did his appraisal, that would weaken your argument a bit." Um, no. we would have had some SERIOUS bargaining power if we had been given the correct information on GLA and a properly done valuation. Like, wayyyyy serious bargaining power. AND we would have not lost money on the sale, which we did, upon discovery of the correct GLA. The VA is serious about their loans and they are a bitch compared to conventional. The point of an appraiser is to transfer risk of a buyer overvaluing a property for any number of reasons, as well as ensuring that the VA doesn't back a property that is overvalued. This dude isn't just on the hook to me. He's got the boot of the VA coming straight for his ass and that's a bad thing for a VA appraiser.

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Originally Posted by BladesNBarrels

Best bet is to consult a real estate lawyer licensed in OK and with experience.
Each state has their own structure and rules.
1) Is the appraiser licensed and required to have Errors and Omissions insurance?
2) Did the appraiser work for the mortgage company?
3) Does the contract to buy and sell list the square footage?
Lots of questions that requires someone expert in Oklahoma real estate.
I am very interested in the result of this.

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Numbered your questions for ease of reply:


1) Yes, to my knowledge. The VA is stricter on their requirements to become an appraiser for them.
2) Technically for the VA, to whom the mortgage company defers, as far as I understand it.
3) Yes, incorrectly as 1896, which was agreed with by the original appraiser, and then confirmed to be incorrect by 639sqft in the negative.

Talk to your agent. They should be on top of this. They should know your options and be prepared to walk away.

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Originally Posted by Delfuego

Talk to your agent. They should be on top of this. They should know your options and be prepared to walk away.

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We sold the house when we moved. Our selling agent is who removed the scales from our eyes on how much of a mistake was made and got us hooked up with the new appraiser who is on the disciplinary board for OK. He is who confirmed this is a big deal and we need to pursue every avenue to get it corrected.

Again, my question would go back to this: Who does the appraiser (the one who made the mistake) work for? Does he work for you, the buyer? Or does he work for the guarantor of the loan, the VA? Or does he work for the real estate agent?

He works for SOMEBODY and that SOMEBODY has to have some kind of a contract specifying what the appraiser is supposed to do and what happens if he doesn't do what he's supposed to do.

Personally I've only bought one house in my life and I honestly can't remember ever entering into any kind of contractual arrangement with the appraiser - our real estate agent did all that, which makes me think that either the appraiser worked for the agent, or the appraiser worked for the loan company (we did a conventional, not VA.)

If the appraiser did work for us, the buyers, then I presume this was done through a POA arrangement where the RE agent had a POA from us to set up the appraisal. If that's the case, that the appraiser worked for you but that the appraisal itself was arranged by the RE agent through a POA, then it seems to me that both the appraiser and the POA RE agent could be liable for malpractice/lack of due diligence.

Sorry if you posted this already, I didn't see it, but when did the erroneous appraisal happen?

Because the other question would be whether either the contract or state law puts any kind of a statute of limitations on claims against an appraiser. If the erroneous appraisal was 5 years ago and there is a 3 year SoL on filing a claim from the date of the appraisal, you would likely have to go to court to try and argue why the SoL shouldn't apply in your situation. It's also possible that there's some kind of time limitation on the contract with the appraiser and if you are past that time limitation, it may be difficult to seek damages.

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Originally Posted by Martinjmpr

Sorry if you posted this already, I didn't see it, but when did the erroneous appraisal happen?

Because the other question would be whether either the contract or state law puts any kind of a statute of limitations on claims against an appraiser. If the erroneous appraisal was 5 years ago and there is a 3 year SoL on filing a claim from the date of the appraisal, you would likely have to go to court to try and argue why the SoL shouldn't apply in your situation. It's also possible that there's some kind of time limitation on the contract with the appraiser and if you are past that time limitation, it may be difficult to seek damages.

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September 2019.

We are working on getting the other answers. Here's what I do know:

2 real estate agents (a trusted friend who was not involved and the other was our selling agent when we sold) and 1 other appraiser (who is on the disciplinary board), along with the VA all blew their stacks when we explained the situation and said we need to raise hell. Upon notification of the complaint, the offending appraiser called me in a straight panic, which to me confirms this is a big deal and he knows he's liable for something.

Really, I'm just curious if anyone had ever seen a similar situation, and, if the VA says we can work with the appraiser on restitution without their involvement, how we might go about that.

It may have been implied in your first post, but for anyone that hasn't read every word, I think pointing out, "AND we would have not lost money on the sale, which we did, upon discovery of the correct GLA." helps.

It's not that you had some small additional cost in your mortgage passing through a property, it's the large amount of money you lost that's key - in addition to the screw ups and pissing off the VA.

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Originally Posted by brutal

It may have been implied in your first post, but for anyone that hasn't read every word, I think pointing out, "AND we would have not lost money on the sale, which we did, upon discovery of the correct GLA." helps.

It's not that you had some small additional cost in your mortgage passing through a property, it's the large amount of money you lost that's key - in addition to the screw ups and pissing off the VA.

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Yes, it's not like he appraised formica counter tops as if they were granite. He failed to do a basic function as an appraiser, and then continued to file a report with incorrect diagrams and measurements which, if the GLA and diagrams were correct, would have resulted in some serious bargaining power as a buyer. And, imagine if we'd defaulted for some reason and then the VA realized they had a 200k loan being back for a 132-140k property?

So I just did a basic google search for the question "Who does a real estate appraiser work for?" and got this:

"The mortgage lender or financing organization typically hires the appraiser. "

Assuming that's true in all cases (obviously a Google search is not real "legal research"), although it's clear that YOU suffered a compensable injury by overpaying for the house, the question would be whether you have to file a claim against the lender or against the appraiser.

If you didn't hire the appraiser (either directly or through a POA arrangement) then the appraiser may have owed no legal duty to you, the buyer. His duty was to the lender.

Certainly the lender is going to be pissed that they loaned money on a house for more than the house was worth, but the question is going to be this: If you relied detrimentally on the appraisal done by an agent of your lender and paid too much, do you have recourse against the lender for the negligent act of their agent, the appraiser? Or does the law presume you to be sophisticated enough to be responsible for negotiating a price that is agreeable to you and to look out for your own interests?

From a legal standpoint the question would be whether you, the buyer, are entitled to rely on the representation of the appraiser. That may be controlled by contract (your contract with the lender), or by statute, or by case law in that state.

The lender may order the appraisal but the buyer almost always pays for it, either directly or at closing.

I went thru an appraisal nightmare when the ex re-fi'd the house into her name. The appraisal was important because it would determine my share of the equity.

We paid $330k for the house then added a $30k garage/shop. We did some other improvements as well. According to real estate records for the area homes increased in value, on average, 5% to 12% per year from 2015 thru 2019. This knucklehead came out, did the appraisal with comps, etc and submitted his report. According to him the appraised value was $388k. Both the ex and I figured the appraisal should've been in the $425k ballpark. I had another appraiser review the report and he agreed it seemed low. But, short of some sort of egregious error, like what happened to the OP, there was nothing I could do unless I wanted to take it to court...and there wasn't. I wasn't in a position to do that or I would've. It also wasn't my re-fi so I couldn't just hire another, competent, appraiser.

She's going to be selling the place in the near future and I'm gonna be pissed when that place sells for $425k. His shitty appraisal probably cost me $15k to $20k. And there are some weird rules about appraisals. That house is 3200 sq ft. But because half of it is below grade, only the portion above grade counts as livable area, regardless of how well the below grade area is finished off. I learned a lot about appraisers. I view them about the same as "journalists" in terms of their integrity.

I hope this works out for you, CS. It's kind of a helpless feeling.

Appraising is one of those things where it's easy to get a job doing it, but it's very difficult to actually be great at it.

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Originally Posted by Bailey Guns

The lender may order the appraisal but the buyer almost always pays for it, either directly or at closing.

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Yes, I paid the appraiser.

He does haves E&O.

Still haven?t heard from the VA on if I may deal with him directly or not. If I don?t hear anything by tomorrow by lunch, I?ll call the appraiser directly and try to clarify on what he thinks right looks like, if he plans to go through his insurance company, etc. so I can at least gauge him.

And let me be clear, I don?t want to destroy the dude or have his life ruined, but he messed up, knows and admits it, and seems to want to make it right.

The impact to the lender is past tense and immaterial at this point. That loan is paid off. But I still lost a lot of potential money due to the improvements we made and the market value at the time we sold the house. And since we sold it for more than we paid, we are subject not only to the loss of the increased value vs what the gain should have been, but also to capital gains taxes which, in conjunction with the cost of the improvements we made, results in a true loss regardless of having ?made? money from the greedy gubment?s perspective.

As long as attorneys aren't involved, there should be no issues taking to him. If either of you aren't acting adults, then letting a third party handle the situation is ideal.

I’m far enough removed from the situation that I’m confident I’m not gonna be dumb from emotion. But, as weird as this sounds, I don’t want him to screw himself by being in a panic. I simply don’t know what right is, so even though I want this made right, I don’t want him to be stupid either. He made a mistake. He needs to rectify it. But that doesn’t mean he needs to go in full bore without someone advising him. I just want it made right. I don’t want to destroy the dude.

I didn't think you were behaving badly. I'd often tell people not to talk to each other when I was the claim rep for auto accidents. No legal reasons, but those conversations tended to get out of hand more quickly than when they would talk to me as the intermediary. Thought it was worth a mention for those following along, more than for you. Good luck.

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Originally Posted by CS1983

Yes, I paid the appraiser.

He does haves E&O.

Still haven?t heard from the VA on if I may deal with him directly or not. If I don?t hear anything by tomorrow by lunch, I?ll call the appraiser directly and try to clarify on what he thinks right looks like, if he plans to go through his insurance company, etc. so I can at least gauge him.

And let me be clear, I don?t want to destroy the dude or have his life ruined, but he messed up, knows and admits it, and seems to want to make it right.

The impact to the lender is past tense and immaterial at this point. That loan is paid off. But I still lost a lot of potential money due to the improvements we made and the market value at the time we sold the house. And since we sold it for more than we paid, we are subject not only to the loss of the increased value vs what the gain should have been, but also to capital gains taxes which, in conjunction with the cost of the improvements we made, results in a true loss regardless of having ?made? money from the greedy gubment?s perspective.

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Pardon my ignorance, but how would you have lost money paying less tax on capital gains you didn't' receive?

Knowing a little about your history, I assume you didn't meet the criteria of living in the residence for two of the last five years.

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Originally Posted by Bailey Guns

The lender may order the appraisal but the buyer almost always pays for it, either directly or at closing.

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Right, but just because the buyer pays the appraiser, that doesn't mean the appraisal is for the benefit of the buyer.

The purpose of the appraisal is to protect the LENDER, not the buyer.

Think about it: If you are buying with cash, do you even NEED an appraisal? Why would you?

The appraisal is paid for by the buyer because getting an appraisal is one of the conditions for the lender loaning the money to the buyer.

Lender says "you want to borrow my money to buy a house? Then YOU pay for an appraisal to make sure I don't end up with a $100,000 house as collateral on a $200,000 loan."

Based on that, I'm not sure the buyer of the house has recourse against the appraiser. Certainly the lender might have had recourse, for example, the buyer defaulted and the lender foreclosed and only afterward found out that the house is worth a lot less than they thought it was.

But if the house has been sold and the lender has been paid back, then from the lender's viewpoint, it's no harm, no foul.

So once again, it goes back to this: Does the appraiser owe a legally enforceable duty to the buyer? And is the buyer entitled to rely on the representations of the appraiser who is there to protect, not the buyer's interest, but the lender'?

As I said above, that may be determined by what is stated in the contract, or by statute or by case law in that state.

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Originally Posted by brutal

Pardon my ignorance, but how would you have lost money paying less tax on capital gains you didn't' receive?

Knowing a little about your history, I assume you didn't meet the criteria of living in the residence for two of the last five years.

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I was probably unclear in phrasing on that. What I mean is that we lost money due to improvements cost but are subject to capital gains tax. If the valuation had been properly done on the original purchase, the house/property, with improvements and market conditions at the time, would have still been worth the price at which we sold. So we not only lost potential gains, but have to pay capital gains on which is actually a loss due to the cost of improvements we made to bring the residence and property to that value.

So, at the time of our selling the house to move back, we had done improvements which brought it up to +39k over original sale price. However, we also put somewhere around 25-30k into improvements[perimeter chainlink fence, new flooring, paint, remodeled two bathrooms, other property improvements on the outbuildings, etc.] (I'd need to go back and calculate all actual costs based on what receipts I have left). After closing costs, etc., we received a check for around 13k. So, from the government's perspective we "made" money. In fact, we lost not only real money but also the potential money which would have been made with a proper valuation.

I'd have had to pay capital gains, yes. But I wouldn't have had to pay "gains" on what was actually loss.

Finally got a hold of a human being at the VA to see if we could even interact with the guy outside of their process.

Denver Regional Loan Center said this is simply a civil issue, and then we talked a bunch about the way the VA views this sort of issue: not favorably, at all. And, they stated that if they kick this appraiser out of their program, it could also impact his ability to appraise for FHA, HUD, etc. In Oklahoma that's a darn big deal. He could be stuck with Conventional loans only, or, if the Appraiser's board takes that away, he's basically looking for a job.

If defaulted, this would have been a major liability to VA who would have removed their guarantee and lender would have had to eat the whole thing. Would not have been my fault as regards the upside down valuation, and I would have suffered no loss of VA benefits in this regard, so that's good.

Then he asked if I wanted to be transferred to/talk with Houston whose answering party promptly deflected to "I cannot give legal advice." Um, lady, I am not asking for legal advice. I'm asking if the VA cares if I talk to the guy outside of your complaint process. Nope. Mum's the word. "Legal" advice. So I'm going to call the guy today and just feel him out for what's what. Denver said we could have the other appraiser do a retroactive appraisal to account for the actual market value at the time of the original appraisal, for presentation to the E&O insurance company/Appraiser.

However, I also just got a reply from the VA Houston office via email, in response to my original question about dealing with the appraiser, post-appraiser call:

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Mr. XXXXXXXX, first, thank you for contacting the VA Houston office and thank you for your service.

I suspect the appraiser contacted you because we contacted him regarding what has transpired. If the appraiser is willing to make amends, offered to make restitution, in some fashion, then if I were the homeowner, I’d be inclined to entertain the offer. In answer to your question, No, we don’t need to be involved in that process, and No, there would be no VA backlash.

I would be interested in how the appraiser intends to resolve the issue, though, and would respectfully request you keep us informed as things progress.

Hope that helps. Any questions, let me know.

[REDACTED]

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Originally Posted by CS1983

Denver Regional Loan Center said this is simply a civil issue, and then we talked a bunch about the way the VA views this sort of issue: not favorably, at all. And, they stated that if they kick this appraiser out of their program, it could also impact his ability to appraise for FHA, HUD, etc. In Oklahoma that's a darn big deal. He could be stuck with Conventional loans only, or, if the Appraiser's board takes that away, he's basically looking for a job.

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Appraiser may be contacting you in hopes that if he comes to a settlement with you, you won't report him to the appraiser's board in that state which could cost him his license (or whatever he has to have to be an appraiser in that state.) You may also be able to file a claim with the appraiser's board to see if they will offer restitution. Colorado has a program like that for attorneys, basically there is a fund that is managed by the attorney registration office of the State Supreme Court so that if people are defrauded or otherwise financially harmed by their attorneys they can be at least partially compensated through this fund. There may be something similar for appraisers in OK.

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Originally Posted by Martinjmpr

Right, but just because the buyer pays the appraiser, that doesn't mean the appraisal is for the benefit of the buyer.

The purpose of the appraisal is to protect the LENDER, not the buyer.

Think about it: If you are buying with cash, do you even NEED an appraisal? Why would you?

The appraisal is paid for by the buyer because getting an appraisal is one of the conditions for the lender loaning the money to the buyer.

Lender says "you want to borrow my money to buy a house? Then YOU pay for an appraisal to make sure I don't end up with a $100,000 house as collateral on a $200,000 loan."

Based on that, I'm not sure the buyer of the house has recourse against the appraiser. Certainly the lender might have had recourse, for example, the buyer defaulted and the lender foreclosed and only afterward found out that the house is worth a lot less than they thought it was.

But if the house has been sold and the lender has been paid back, then from the lender's viewpoint, it's no harm, no foul.

So once again, it goes back to this: Does the appraiser owe a legally enforceable duty to the buyer? And is the buyer entitled to rely on the representations of the appraiser who is there to protect, not the buyer's interest, but the lender'?

As I said above, that may be determined by what is stated in the contract, or by statute or by case law in that state.

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The VA has specific conditions to protect both the buyer and the VA as the guarantor. They are the guarantor, not the lender, and the lender defers to them on the loan, simply. The specific purpose of the VA Home Loan program is to ensure not only that veterans have access to home loans, but that they are not taken advantage of.

A conventional loan is apples and oranges for particular requirements, and regardless you seem to be ignoring the reality of a serious mistake in GLA, a basic appraisal function. It would be akin to a paramedic not assessing a patient before beginning treatment or a cop not frisking someone before they put them in their car. Again, it wasn't like he mistakenly added $3k of value for granite counter tops when they're actually formica. He effectively added an entire studio apartment's worth of non-existent GLA, and that because he didn't do a basic function of his job: measure the GLA.

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The VA appraisal establishes the fair market value of a home being purchased or refinanced with a VA loan. VA appraisals are a key part of VA loan approval and are required by the Department of Veterans Affairs for VA purchase and cash-out refinance loans.

The VA appraisal process isn't intended to unreasonably raise the bar when it comes to quality in a new or existing house; instead it's designed to protect the borrower, ensuring the home is safe, sanitary and fairly priced.

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https://www.valoans.com/articles/va-appraisals/

In short, the home was not fairly priced.

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Originally Posted by Martinjmpr

Appraiser may be contacting you in hopes that if he comes to a settlement with you, you won't report him to the appraiser's board in that state which could cost him his license (or whatever he has to have to be an appraiser in that state.) You may also be able to file a claim with the appraiser's board to see if they will offer restitution. Colorado has a program like that for attorneys, basically there is a fund that is managed by the attorney registration office of the State Supreme Court so that if people are defrauded or otherwise financially harmed by their attorneys they can be at least partially compensated through this fund. There may be something similar for appraisers in OK.

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That ship already sailed. He was reported to both the Oklahoma Appraiser's Board (paper packet) and the VA (email duplicate of the OK paper packet).

If he wishes to truly settle, and God willing without involving a lawyer on either side, I'd be happy to argue on behalf of him to both the VA and the OK board that he did what was right upon his mistake being brought to light. If he's had no other complaints, that should be taken into account as well.

But, as my very first Platoon Sergeant used to say: you can have a thousand atta-boy's, but all it takes is one ah'shit.

Just want this made right.

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Originally Posted by CS1983

A conventional loan is apples and oranges for particular requirements, and regardless you seem to be ignoring the reality of a serious mistake in GLA, a basic appraisal function. It would be akin to a paramedic not assessing a patient before beginning treatment or a cop not frisking someone before they put them in their car. Again, it wasn't like he mistakenly added $3k of value for granite counter tops when they're actually formica. He effectively added an entire studio apartment's worth of non-existent GLA, and that because he didn't do a basic function of his job: measure the GLA.

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No, I'm not ignoring that at all. I agree 100% that the appraiser was negligent.

What I think you may be ignoring is that merely being negligent is not enough for YOU to have a claim against the appraiser. Because a claim of negligence can only be filed by someone who is owed a legal duty of non-negligence.

There are 4 elements of a negligence tort:

1. The Defendant owed a DUTY to the Plaintiff
2. The Defendant BREACHED that duty
3. The Plaintiff was harmed
4. The proximate (closest in time and place) cause of the Plaintiff's harm was the Defendants' breach of his duty.

All 4 have to be proven in order to have a claim of negligence.

Clearly the appraiser owed a duty to somebody. But the question is, did he owe a duty to YOU?

Quote:

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https://www.valoans.com/articles/va-appraisals/

In short, the home was not fairly priced.

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But who's responsibility is it to ensure that a home is "fairly priced?" Is it the appraiser's, or is it the VA's? It may be that the appraiser only owed a duty to the VA. If that's the case, then you would have to file a claim against the VA because their agent, the appraiser, was derelict in his duty and did not accurately appraise the home, and you suffered damage as a result.

But that, of course, opens up a whole other set of issues and problems because once you start dealing with a government agency, a lot of the rules of common law don't apply.

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Originally Posted by Martinjmpr

Right, but just because the buyer pays the appraiser, that doesn't mean the appraisal is for the benefit of the buyer.

The purpose of the appraisal is to protect the LENDER, not the buyer.

Think about it: If you are buying with cash, do you even NEED an appraisal? Why would you?

The appraisal is paid for by the buyer because getting an appraisal is one of the conditions for the lender loaning the money to the buyer.

Lender says "you want to borrow my money to buy a house? Then YOU pay for an appraisal to make sure I don't end up with a $100,000 house as collateral on a $200,000 loan."

Based on that, I'm not sure the buyer of the house has recourse against the appraiser. Certainly the lender might have had recourse, for example, the buyer defaulted and the lender foreclosed and only afterward found out that the house is worth a lot less than they thought it was.

But if the house has been sold and the lender has been paid back, then from the lender's viewpoint, it's no harm, no foul.

So once again, it goes back to this: Does the appraiser owe a legally enforceable duty to the buyer? And is the buyer entitled to rely on the representations of the appraiser who is there to protect, not the buyer's interest, but the lender'?

As I said above, that may be determined by what is stated in the contract, or by statute or by case law in that state.

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I understand all that. My only additional comment is the appraiser really doesn't work for anyone. In my experience, a lender has a list of appraisers in a particular area. They need an appraisal they start to work their way down the list. An appraiser should remain a "free agent" to avoid conflict of interest. You obviously don't want a lender "owning" an appraiser who might compromise home appraisals in favor of a lender. Same way a buyer can't say to the lender, "Yeah...my Uncle Fred's an appraiser and he'll cut me a deal on the fee. Let's just use him."

And I would also say their job is to protect everyone in the transaction...not just the lender.

One thing I've noticed after buying or refinancing numerous houses is the appraisal almost always comes in right where it needs to be on transactions where the estimated value of the home and the requested loan amount are close. Coincidence? If you (in general) say so.