Questions and answers on how consumers can ensure they are getting an honest appraisal when buying or selling a home, refinancing an existing mortgage or taking out a home equity loan or line of credit:
Q: Who orders an appraisal?
A: Most appraisals are ordered by lenders, who use the information to determine the collateral value of a home when deciding whether approve a mortgage loan. But consumers can also order an appraisal, and might choose to do so for a number of reasons. Among the most common is to help them decide on a fair price for a home they wish to buy or sell.
Q: What should I look for when I hire an appraiser?
A: First, look for an appraiser who is licensed and certified by your state. Most states have an appraisal board that should be able to provide an appraiser's qualifications, as will the Web site of the federal Appraisal Subcommittee: www.asc.gov.
Q: Will that Web site tell me what I need to know?
A: Yes and no. The Appraisal Subcommittee's Web site will feature information about an appraiser's qualifications. But it will only list disciplinary action that is current. Suspensions and other past disciplinary actions won't be listed.
Q: Can't I get that information from my state's appraisal board?
A: Not really. State appraiser boards are generally reluctant to release any information about an appraiser's disciplinary history. That includes how many complaints have been filed against an appraiser.
Q: So, how can I make sure I'm getting a fair appraisal?
A: That's a tough question. To start, make sure your appraiser is independent — don't allow a lender to pick the appraiser. Also, use a common sense test. If the home next door just sold for $150,000 and the appraiser values the home in your deal at $200,000, you have reason to be suspicious. You can also hire another appraiser for a second opinion.
Q: If I have a complaint, whom should I contact?
A: Every state has an appraisal board or agency that accepts and investigates complaints, holds hearings and disciplines appraisers. Some states, however, do not accept anonymous complaints, and disputes can take years to be resolved.