If The Appraiser Waits For The Final Inspection To Verify It Is Too Late

Business, Ethics.

How to evade liability lawsuits as a home appraiser - as an appraiser in the real estate industry, the danger of litigation is real. credit agencies continually pressure you for higher values, lenders are searching for scapegoats, and shady" investors" are searching for easy target to help them carry out fraud. Don' t do anything that can make you a liable target. ) Movement.

There are only a few options on how to cope with with this threat. ) Avoid it. - reassign the weight to something else like the client or somebody else. ) manage it. Create a relationship with a competent attorney who can aid you with your dealings to pre - avoid liability. Know and use the legal system to your benefit. Have an insurance company like Errors and Omissions Insurance from a reputable company that will defend you with local contract lawyers. ) Recognition. Assume it never happened and hope it never will. ) Leave it.

Do not Deny the fact that the threat is real and get yourself insured with an insurance company. ) Ignorance. - there are other careers that have more potential than this uncertain business. If you want to request for a duplicate of the purchase agreement, it is best if you can get the signed copy of the Seller' s Disclosure form. Here are some frequent reasons why a home appraiser gets stuck in a complaint and court cases. ) Failing to determine and declare improvement and site defects. Remember to indicate that you, have read and, as the appraiser analyzed the Seller' s Disclosure Statement. When the time comes to examine the house, remember to check with the seller if there have been problems about molds. Ensure that you get a duplicate of the Seller' s Disclosure Statement.

The appraiser can also present the seller with the appraiser' s own form with questions for the seller to review, and sign, answer. ) Wrong estimation of the living area. - if the appraiser obtains a set of details for proposed construction, those details should be confirmed with cad program to verify the living area size. Don' t simply depend on information from the former appraiser, data taken from the multiple listing system, or details from, county records the architect. If the appraiser waits for the final inspection to verify it is too late. All changes to the living area even though the calculated area is still the same should be noted separately in the report and on a separate sketch. ) Did not report leakage of the roof, settlement or foundation cracks, termite infestation and, wet basements mechanical defects. ) Overvaluation or Undervaluation of a property. If the seller has an addition to the living area, like an enclosed veranda or carport/ garage, this area should at all times be separated in the sketch and in the report - even though the area still has equal contributory value. Fraud is most commonly a competency issue and Errors and Omission Insurance doesn' t cover the appraiser when you' re charged with fraud.

Includes items of the entire FNMA 1004 form such as utility hookups, dimensions of the, zoning lot, County taxes/ assessments, correct owner of record, history of the subject( both listing and sales) , etc... Confirmation should be the chief job when doing an appraisal. ) Insult. - a study stated that approx. 15% of fraud cases deal with appraisers who have little or no experience. ) appraisal of wrong property. ) you did not verify. The review appraiser degrading the appraiser instead of the report itself, therefore the insulted appraiser sues the review appraiser. As an appraiser you cannot entirely take away the weight of liability for your evaluations rather by being conscious of and steering clear of these hazards you may be able to avert any costly litigation.