[StBernard] Appraisal Comment

[Westley Annis]

Hi Everyone,

I'd like to bring something to everyone's attention, particularly any one
who has had an appraisal done by me - or any other appraiser for that
matter. Specifically, I am talking about when you've hired me or another
appraiser to appeal what you believed to be a low "pre-Katrina" market value
given to you by the LRA Road Home program.

As many of you know, the LRA Road Home program has what I refer to as the
"20% margin of error" rule. This is where if you are unhappy with the pre-K
market value given to your home by the LRA Road Home program's appraisal,
then the LRA will accept the opinion of value from your own hired appraiser
(without question) provided your appraiser does not have a value more than
20% above what their value.

Furthermore, as many of you know and have personally experienced - not only
was the LRA appraised value low, but in many cases "extremely" below market
value just prior to Katrina. Because of that many of my appraised values
have been more than the 20% margin.

I have heard from some of you about this. In some cases I've been asked if I
could lower my appraised value to fit within the 20% margin. I'd like to
share with everyone my response on this should you experience the same thing
and think about calling me on this.

First, for me to change my opinion of value on your property - by my just
changing the final value number or by re-doing the appraisal to find
different sales that would serve as a tidy fit - either would be an ethics
violation on my part and likely have legal implications. This is because I
have already stated to you in a formal document (the appraisal report) my
professional opinion of value. For me to change it would also be admitting
that I was wrong on my first value - so why wouldn't the LRA then not
question my second opinion. After all, if I admit to being wrong the first
time up, there's a good chance I'm wrong the second time, right? You can see
how this would create problems for both of us. The credibility of both
appraisals would come into question.

Here's what I'd like everyone to keep in mind: the reason why my appraised
value of your home is more than 20% above theirs is because theirs is too
low to begin with. My value is not too high...their value is too low - and
this should be the starch position you take with the LRA, especially if you
agreed with my value. If their value would have been more in the ballpark in
the first place, then there would never be a problem with my value falling
within the 20%.

Folks, I've appraised properties in Corrine Estates and Jumonville that
anyone would recognize to have been $300,000 and up, yet the LRA value has
some of these properties well under $175,000. Can you see how bad it would
look for me to mis-appraise the same home for only 20% more. In short, you
don't ask your appraiser to come down to the level of "their error" - you
should get all over the back of the LRA to correct their appraisal.

Some, no many, of the homes the LRA has appraised have been "grossly" under
valued.

At this point I do not want to overstep my boundaries by giving advice. But
I do know you can request what they call "resolution" - and it is my
understanding Resolution is not just the LRA saying "nope, your appraiser
came in above the 20% rule so you have to go with our value, take it or
leave it." Again, that is NOT resolution. I have been told by some folks I
have done appraisals for who fall into this problem that their resolution
involved their sitting down with the Road Home folks and basically hashing
out a mutually agreed pre-K value of their home. Some told me the LRA sent
out another one of "their" appraisers to see if there was some kind of error
on their part. And in many cases, there were errors.

Here is what came out of some of the cases I was told about: First, they
discovered there was a difference in spec information on the property - the
amount of square footage, bathrooms, lot size, etc. Anything less than what
I had/used would certainly make a difference in value; Second, what
comparable sales did their appraiser use to conclude an opinion of value -
and this is a crucial point. You need to demand to see "their" appraisal so
you can compare it to that of your hired appraiser. If the Road Home person
cannot produce "evidence" of how they came up with "their" value, then I
would have to scream at them "then how can you say my appraiser is wrong if
you can't back up what you claim." Trust me (and you can say this to them),
if you ended up suing them over this, they would have to explain themselves
in Court.

Demand to see their appraisal and paperwork on how they arrived at their
value on your home - by law (the laws of disclosure) you are permitted to
see such documentation since any federal funding you are possibly entitled
to is based on that documentation....and the Road Home program is a federal
program that is only "administered" on the state level through the created
LRA.

Other than that, there's really not anything else for me to add. I could say
hire another appraiser, but that should not be necessary if the Road Home
program does their job correctly - and what if the next appraiser you hire
comes up with a value similar to mine? Then you're right back where you
started.

And, more importantly, you cannot ask an appraiser to come up with a
pre-determined or "manufactured" value just to make it fit within the LRA's
20% rule. Well, I guess you could ask, but any law abiding appraiser will
tell you he/she won't do that. All he can do is give you his honest opinion
of value - whatever that might be. Appraisers have lost their licences and
gone to jail for doing less wrong.

I hope I've been some help here. I wish everyone the very best with this
very trying experience.

John Scurich