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A customer issued a stop payment on a real estate appraisal. What can be done to enforce payment?
A customer requests an appraisal. The customer feels that his house is worth $650,000. an appraisal provided by a state Certified Appraiser indicated that the property was only valued a $450,000. The customer paid for the appraisal at time of inspection. After the customer was informed that the property didn't appraise at $650,000, he had his bank stop payment on the check. Where do I go from here?

Posted by Tony on 04/03/08
Total Answers: 7

Answers-

Sue in small claims

Answer posted by goz1111 on 2008-04-03 05:50:19

You can take him to small claims for non payment of services or put a mechanic's lien on the property.

Answer posted by hollywoodmelody on 2008-04-03 05:54:33

Warn the person you will send him to collections. And it seems to me when I've refinanced, the mortgage company orders the appraisal, and they charge their customer. So maybe in the future you should handle it that way.

Answer posted by ann on 2008-04-03 06:09:42

You rendered a service. SUE THAT CREEP in Small Claims Court! NEXT TIME: Don't tell anyone what any property is worth until AFTER the appraisal is prepared AND the check clears! Thanks for asking your Q! I enjoyed answering it! VTY, Ron Berue Yes, that is my real last name!

Answer posted by Ron Berue on 2008-04-03 06:21:34

You just take her to small claims court. That is all you can do. Part of this, I hate to say it, is your fault. It has to do with the way you are running your business. $200K is ALOT to be off....appraisers in my area, when they start to do the "homework" on the appraisal looking for comps, and before they have got too deep, if they are THAT off on an appraisal (or even just tens of thousands), they'll call up the client and say, "Hey...I can't do this appraisal for you...what you are requesting is about $200K off from everything else in the area...I just don't want to take your money for something that isn't going to serve your purpose." Then, instead of being the bad guy, you become the hero...you are instantly seen as being an honest business man, will get referrals for days and days. There wasn't any reason why when you got the appaisal order...you KNEW probably when you pulled the first 2 or 3 comps that it was going to be more than 6-figures off. To me, that is bad business. You went ahead and did a full report, KNOWING it was going to not even be close...that is because you were more interested in feeding yourself for a day than feeding yourself for the year. I have good relationships with tons of appraisers where they will do free, verbal "ballparks" for me when I need it. Banks will cut you off in a second if don't forwarn them on something THAT off in advance and before you send in a bill. In other words, if you were $20 or $30K off in value...no one is going to scream at you for that....it is what it is...but $200K? Come on!

Answer posted by Expert Realtor on 2008-04-03 07:23:12

I agree with Ron. Since he essentially wrote you a bad check you can sue for over the amount. I think the amount is state specific, but you could look it up easily enough. In CA it is 3 times the amount of the check.

Answer posted by Landlord on 2008-04-03 07:24:33

You can either take them to small claims court, or submit it to the DA ( I think). You were hired for a job, and it is a violation of USPAP to take a job with a predetermined value, or contingent upon it meeting a specified value. For the viewing pleasure of other readers, please note it often takes time and effort to get to a point of realizing even what a rough estimate of the opinion of value will be. Especially in this current climate, it can be pretty much unknown until more analysis (and time and effort) is made. From a business standpoint, the appraiser, if they were able to realize (speculate and support) a decision that an "estimate of value" was improbable, they have options. Some appraiser have contacted their client and only charged for the time, etc spent. It might be that the appraiser underbid that assignment, and really doesn't want to eat 3 days of work-where he/she only got paid $350 as an example. I personally never assume what the value will be until I finish the report. I have been surprised before. However, I also will decline a job knowing that the client's hopes will probably not be realized in 5 or 10 years :-), unless the information they provided me was incorrect to begin with. Perhaps the home had an ocean view behind an 8 ft fence that the homeowner didn't realize they could have shortened, or removed. I actually found that once upon an inspection. This is an industry that is not based on commissions of sales. If you hire an tax accountant, do you pay them less because you don't like the outcome? They base their fee on the complexity of the assignment. If it were possible for appraisers to value properties without doing due diligence and analysis, there would be no need for appraisers.

Answer posted by Cathy on 2008-04-06 17:04:34

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