Adam Johnston, SRA, is a long time appraisal veteran, and currently a chief appraiser for a national real estate settlement services company (and a longtime fan of Soapbox). On a daily basis, he speaks with appraisers and lenders across the country having observed the rise and fall of the sub-prime lending market. I am glad to have him share his views with us …Jonathan Miller

There has been some recent discussion regarding the process of disputing
an appraisal. As expected, this topic tends to illicit passionate

As a profession, we like to believe that appraisers opinions are formed
from a rigorous examination of the market and a boundless understanding
of market forces and dynamics. We believe that people should
unequivocally respect an appraiser’s opinions. Unfortunately, some
appraisers believe that such respect is demonstrated by insulating
appraisers from critical questioning or examination. These same
appraisers tend to believe that questions pertaining to the accuracy of
the value opinion or report content are tantamount to an attack on the
appraisers integrity and aptitude. Any such questions are met with
moral objection and are viewed as insipid and inherently sinister.

To start, I believe that an appraiser must render appraisal services as
a unbiased professional, without advocacy or favor. An appraiser, much
like in scientific discovery, must seek the truth from the data. To
this end, I believe that the appraiser should independently gather and
examine data without the injection of influence during the development
of the appraisal. Some entities and organizations offer a codified
venue for ostensibly biased individuals, including borrowers and real
estate agents, to submit uninvited data to the appraiser during the
development process. By doing this, I believe that these entities and
organizations are potentially facilitating the co-opting of the
appraiser into a suggested outcome. In contrast to this practice, I
believe that all petitions and value reconsiderations should be
prohibited until the appraisal report has been completed and delivered.
In this way, we engage a process where the appraiser’s opinions and
conclusions are based upon an independent data gathering process,
unaffected by the uninvited supplications of others.

However, once the appraisal report has been completed and delivered, I
fully support a restrained process by which individuals may entreaty the
appraiser to consider alternative data and arguments. This would
encompass both value reconsiderations and disputes related to any other
elements of the appraisal report or development process. I recognize,
as should every reasonable professional, that perfection is elusive.
Additionally, maturity teaches us to consider the opinions of others,
regardless of how objectionable they may seem. It is my opinion that a
prudent and professional appraiser, while acting within the bounds of a
proper appraiser-client relationship, should be willing to consider
argumentative data and probable conjecture, regardless from whom it

Please understand that I am not suggesting that an appraiser be
compelled to consider an endless stream of data and arguments without
just compensation. However, because compensation is a matter of
business negotiation and therefore subject-to the savvy and preferences
of each appraiser, it must be neutralized for this discussion.
In an ideal scenario, all value reconsiderations and supplemental data
should be screened prior to submission to the appraiser by persons
having sufficient appraisal knowledge and training. This method will
reduce the incidence of irrelevant and non-persuasive data reaching the
appraiser. In addition, threatening or objectionable matter could be
censured. I am firmly opposed to commissioned or quota based mortgage
salespersons directly interacting with appraisers. In addition, I
question the wisdom of empowering anyone with negligible formal
appraisal training to interpret, screen or supply data and value appeals
directly to the appraiser. Although it may involve additional cost, I
submit that regulated mortgage lenders should be expected to employ
licensed/certified appraisers to manage post-delivery value
reconsiderations and dissenting arguments. Anything less constitutes an
unacceptable sacrifice of lending prudence, often for the primary
benefit of constricting payroll. As we have seen from the recent
residential lending implosion and epidemic over valuations, the cost of
lax controls is disastrous and far outweighs the added payroll burden of
qualified appraisal staff.


  1. Edd Gillespie September 8, 2008 at 12:57 am

    “These same appraisers tend to believe that questions pertaining to the accuracy of the value opinion or report content are tantamount to an attack on the appraisers integrity and aptitude. Any such questions are met with moral objection and are viewed as insipid and inherently sinister.”

    I quoted this particular section of your editorial because I believe the element of self righteous arrogance that inspires that sort of reaction among appraisers also infects review appraisers.

    That impression comes from my experience in speaking with appraisers who actually are involved in completing review whether of my appraisals or those of someone else.

    In my experience, there just isn’t much respect for one another in this profession and jealousy runs really, really deep. Maybe professional insecurity among appraisers is chronic.

    While I appreciate your contribution of a solution to one of our more persistent problems, please come up with something that we can rely on to identify appraisers who know what they are doing, either in review or appraising. That would be big help.

    So many in this profession are convinced theirs is the way, the truth and the light when they have no better way of putting on their pants than the rest of us. Show me an appraiser who wants to learn and knows he doesn’t have all of the answers and I’ll show you an appraiser who has promise as a reviewer.

  2. John Cicero September 8, 2008 at 10:12 am

    Adam, Well said. I have long maintained that, just as questioning our government’s actions is not “unpatriotic”, questioning an appraiser does not rise to the level of “appraiser pressure.”

  3. Adam Johnston September 8, 2008 at 1:10 pm

    Edd and John,

    Thank you both for responding to my post.

    Edd, your points are well taken and insightful. I am firmly in agreement with your observations about self-righteous arrogance in the realm of review. Arrogance can lead a reviewer to make unreasonable assumptions, and in some cases improper demands, of the appraiser. In fact, some of the passionate responses (to which I refer at the beginng of my editorial), may be an expression of frustration brought on by years of improper communications directed at appraisers from various participants in the mortgage lending process, reviewers included.

    However, when discussing possible methods to address the problem of proper versus improper communications, I believe that we need peel away the emotions and objectively consider some potential solutions. This was the root of my statement regarding the manner in which some people react to questions about an appraisal report. An “us against them” approach, as some have embraced, tends to result in eager defensiveness and further entrenches existing prejudices.

    Thanks again for your thoughtful response and observations.

  4. Edd Gillespie September 9, 2008 at 12:16 pm

    I do think mortgage related appraising has degenerated to an “us against them” name calling situation. Not only is the appraiser pitted against underwriters and reviewers of all kinds, but appraisers are pitted against appraisers to offer the fastest and cheapest appraisal since that is what the market demands. Quality of any kind in mortgage appraising has become simply a veneer that doesn’t violate the Frannie guides.

    Appraising in mortgage work has become a game of the “pot calling the kettle black” and so it will remain until the client really wants an appraiser’s opinion of value in his loan file for some reason other than to CYA from the FDIC or whoever may be looking over their shoulder.

    You are correct about the results of an “us against them” attitude, but I wonder if it is at all fair to require the change to begin with appraisers who for the most part already have low income and no respect. I am convinced that appraisers are perceived in the current system as have absolutely nothing of value to offer mortgage lenders, and yet most of them I know continue to endeavor to be relevant in their work. Apparently, hope springs eternal.

    What appraisers do is not what the lenders want. Appraisals are nothing more than a tax, an unwanted, unproductive tax to those lending in mortgage work. No matter how accommodating and understanding an appraiser’s attitude is, he still has to deal with clients who don’t want him in the loan process under any circumstances.

    I think I’ve grown cynical. It’s a wonder that a systemic bad attitude is all that has surfaced.

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