This week alone, literally all the business calls accept one, were for "value checks". I am disgusted. I did a cursory search on the Internet and found that almost all of the San Diego Real Estate Appraisers offer comp checks as a selling feature. AS A SELLING FEATURE!!! Unbelievable!
Mr. and Mrs. Loan Officers, why would you want us to give you a value before you order our services for an Appraisal (which is another word for "value", if you could figure it out on your own)? Isn't that a little backwards?
I know I have talked about comp checks before, but let me just share something about myself that you may not know. I used to perform comp checks. But the following situation is what made me realize what comp checks actually were and that they were unethical.
*ring, ring*
Me, "San Diego Appraisers, how may I help you"?
Loan Officer, "Hi, my name is Josh and I am a loan officer and xyz mortgage company, do you perform appraisals in Riverside, San Diego County"?
Me, "Yes, of course. And I provide excellent service".
Loan Officer, "Oh great, and are you FHA Approved"?
Me, "Yes sir I am"
Loan Officer, "Oh good, because I have this borrower that is pretty close to the mark on what his home needs to be worth for this loan to work and I do not want to wast the borrowers money on an appraisal if it does not come in with the needed value and I was wondering if you do comp checks"?
Me, "Sure, I can do that for you. Now what criteria do you want me to pull the sales by..one mile radius and 200+/- square feet"?
Loan Officer, "Sure, that sounds good".
Me, "Ok, I am sending the email to you right now, it looks like there are sales in the list running from $130k to 230k".
Loan Officer, "Could you possibly narrow down what the value might be on this particular one, because that is an awfully big range".
Me, "Well, no..I haven't even inspected the property yet, it is kinda hard to tell".
Loan Officer, "OK..let me talk to my borrower and I will let you know if we are going to move forward with this".
Me, "Sure, no problem, let me know".
Wow, can you believe how unbelievable that conversation was? And that was TYPICAL! Ok, now here is the follow up call from the loan officer:
Loan Officer, "Just as long as you think it will hit value, go ahead and perform the Appraisal".
Me, "I can never promise a value".
Loan Officer, "Well, just do the best you can, I am faxing it right now".
Me, "Well, I can't promise anything, but I wish the best of luck".
UNBELIEVABLE!! Do you see so far where this stupid comp check game got me? Ok, now lets take this a step further. This is the follow up phone call from the loan officer after the appraisal was turned in with a $125k estimated value.
Loan Officer, "You told me that the value was good to go, this is ridiculous".
Me, "I never promised a value and told you I would not do so before you ordered the appraisal".
Loan Officer, "You promised this value, I even have the paperwork right in my hand, you gave me a range of 130k to 230k".
Me, "I provided you with sales, no more. I did not promise I would give you a value within the range of values of the sales that I provided you".
Loan Officer, "You did tell me this was the range, can you at least bring in the value a little bit higher"?
Again...UNBELIEVABLE!! Do these Appraisers in San Diego not realize what they are doing or do they just not care? Comp checks were a scam game made up by.. guess who? THEM!! THE LOAN OFFICERS OF AMERICA!!!
Do you see from my example how the loan officer was able to apply pressure from the very beginning and even right after the appraisal was finished? He was able to apply the pressure utilizing the comp check that was done for him. If this is what comp checks are used for, then why are you Appraisers in California and all across this country supplying them?? I can understand if you are new in the business and were taught as a trainee that comp checks are a part of the business, but you Appraisers that have been in the business long enough, should have realized whats going on by now. So those of you that still choose to do them, shame on you.
On an up-note (imagine that, something upbeat), for those Appraisers that have decided to be ethical, I applaud you. And to those loan officers that send me orders without conditions or comp checks, you are a rare kind and you are much appreciated!
Disclosure: All the statements contained in this post are not wholly factual, accept for the point that I was making, which is COMP CHECKS SHOULD BE AGAINST FEDERAL LAW!
