lifelessons MELANIE MCLANE
You can’t make this stuff up AS A PRACTICING appraiser, I occasionally do review work. One of the worst reviews I ever did was of an appraisal that turned out to be fraudulent from beginning to end. It started badly, and got worse. I received the entire report by e-mail, printed it out, and then found and brought up the picture of the house and the tax card information via the county website. To begin with, the photos of the house in the appraisal did not look anything like the photos of the house on the county site. Giving the appraiser the benefit of the doubt (courthouses make errors too) I continued the review. The tax parcel number was wrong; the census tract number was wrong; the flood map number was wrong. One or two errors, sure — but really? All those numbers wrong? The comps looked great — until I tried to find them. This was a “field review,” which meant I went out into the field and inspected the subject and the comps from the street. First of all, guess what? The courthouse photos of the subject were correct! The photos in the report of the “subject property” — well, they were of someone’s house — just not this owner’s. Then I began looking for the comparables. Although there were real photos of real houses, they simply did not exist — not here, anyway. One comp, for example, was supposedly located in the 2700 block of a street ... which dead-ended in the 2400 block. I could find none of the comps anywhere where the appraiser said they were. It was a shame, because the appraisal “came in” beautifully — very few net and gross adjustments, very tight range of value. Of course, I realized as I was reviewing it, if you can make up the facts as you go along, it’s easy to get the value you want. This appraiser had “appraised” this house so it had doubled in value in just 12 months — very unlikely in my market area. At the end of my review, morbid curiosity overcame me. Usually, when I receive a review, the original appraiser’s name is redacted from the report, so I don’t know who I’m reviewing. In this case, because the 14 JULY/AUGUST 2011
appraisal had been sent via a PDF file, I could see both the name and the license number. With that information in hand, I went first to the appraisal board website where I saw the following notation: “This license has been permanently revoked.” Permanently revoked is as bad as it gets from a licensing board. It is beyond suspension, beyond “maybe we’ll give it back to you in a year or so.” It is gone for good. I then Googled the name of the appraiser. Lo and behold, he was doing time in the state penitentiary for fraud. Moral: Whatever the fee he received for that fraudulent appraisal, it certainly wasn’t worth what it cost him — his license and his freedom! ●
Melanie J. McLane, ABR, CDEI, CRB, CRS, ePRO, GREEN, GRI, RAA, RSPS, SRES, SRS is a practicing real estate appraiser, broker, consultant, and educator, and former owner of a brokerage. You can see Melanie live at the REal Show — she’ll be teaching courses on “Pricing in a Competitive Market” and “Relocation: Best Practices.” Register at REalShow2011.com. WWW.VAREALTOR.COM