How To Evade Liability Charges As A Real Estate Appraiser
By R Chandler Smith
The possibility of a lawsuit is real when you are a real estate appraiser. credit companies relentlessly force you for higher values, lenders are looking for scapegoats, and notorious "investors" are looking for easy target to help them commit mortgage fraud. Here are some things you have to do so as to handle this threat.

1.)Avoid it. Make yourself a less attractive mark.
2.)Movement. Reassign the burden to something else like a client or somebody else.
3.)Cope with it. The justice system is your ally; employ it to your advantage. Have Errors and Omissions Insurance from a reputable agency that will defend you with local contract lawyers.
4.)Admit it. Accept the fact that the threat is real and get yourself insured with some insurance agency.
5.)Turn a deaf ear. Assume it never happened and pray it never will.
6.)Throw in the towel. Alter your career to one that is less adversarial.
Here are a few common reasons why a home appraiser gets involved in a lawsuit and court cases.

1.)Failing to determine and report improvement and site flaws. On purchase appraisals, it is an excellent idea to get hold of the Seller’s Disclosure forms which have been signed if you request for a duplicate of the purchase agreement. Don’t forget to note that the appraiser have read and analyzed the Seller’s Disclosure Statement. Ensure that you obtain a duplicate of the Seller’s Disclosure Statement. When it is time to check the site, bear in mind to check with the retailer if there are issues about molds. The appraiser could even offer the seller with the appraiser’s own form with questions for the seller to review, answer, and sign.

2.)Incorrect calculation of gross living area. While on an assignment, the appraiser should not depend on what is in the MLS system for living area, the previous appraiser’s drawing, an old survey, and the county records pointing out the living area or the architect’s set of plans. Any construction details of the living area should be verified using a CAD program. If the appraiser waits for the final check up to confirm it’s is too late. If the seller has an addition to the living area, such as an enclosed carport/garage or veranda, this should always be separated in the report and in the sketch – even though the area is given the same contributory value. Any changes to the living area even if the calculated area is still the same should be noted separately in the report and on a separate sketch.

3.)Not indicating in the report that there’s leakage of the roof, wet basements, cracks in the foundation, infestation of termites, and major or minor mechanical failure.

4.)Reaching a decision in which the property is overvalued or undervalued. You’re likely to deceive if you don’t have the required skill and E&O won’t back you up if found guilty. Appraisers who are not experienced with their responsibilities and duites are prone to be convicted with fraud.

5.)Appraisal of not the right real estate.

6.)You did not confirm. Everything in the FNMA 1004 form should have been verified. Appraisals should be full of substanciation.

7.)Defamation. The review appraiser degrading the appraiser rather than the report itself, thus the appraiser defamed files a lawsuit against the review appraiser.

As an appraiser you cannot fully remove the burden of liability for your evaluations but by being aware of and steering clear of these hazards you may be able to avert any expensive litigation.

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This article was written by William Cobb with the assistance of R Chandler Smith. Mr. Cobb owns and operates Accurate Valuations Group and has been licensed as a home appraiser for 15 years now primarily in the Greater Baton Rouge, LA market area. For more information on William Cobb and Accurate Valuations Group, visit Baton Rouge Appraiser. R Chandler Smith is an adept real estate ace in the Houston area. He oversees Houston Appraisers