Killing a Deal with a ‘Low’ Appraisal


Within the first few weeks of becoming an appraiser, I knew I had a choice to make. I was already being pressured by lenders, real estate agents, and others to ‘hit value.’  Other things were being asked of me that I felt were unethical or even bordering on illegal.  It was clear that some of my peers were giving into such pressures and, at least in the short term, they were being rewarded for it.  I made a commitment early on however, to always live true to my conscience and let chips fall where they may.


Over the years, I have angered a lot of banks, homeowners, and agents when I have valued real estate where the market would support and appraisalpurchasenot where someone else thought it should be.  In some cases, I have felt like I have done the potential buyer a huge favor by saving them the pain of a financial mistake in paying too much for a home.  They do not always see it that way.  Rather than appreciating an appraiser’s professionalism, we are often viewed as the enemy for ‘killing the deal.’  In a rare moment, the opposite happened to me in early September.


I was commissioned by the Veteran’s Administration to do an appraisal for a new construction.  The plans and specs arrived and I began my initial look through.  It was immediately obvious to me that this home was of high-end quality, but had some unusual features.  For example, though the home was made of wood (common in my area), the truss system was steel (not common my area).  The cost of the roof system alone was 4Xs the cost of a normal roof.  To make a long story short, the home did not appraise for the cost of construction.  This was your typical ‘cost does not always equal value’ scenario.


Two weeks later, I got a call from the potential buyer.  “Oh boy.  Here we go,” I thought. I prepared myself to be taken to the woodshed for killing his deal.  What came next was surprising.


He said, “”I cannot thank you enough for what you did for us.  Where most appraisers would just rubber-stamp the deal, you didn’t.  Your appraisal was honest and kept us from entering into a major financial transaction and already being upside down.  There needs to be more appraisers like you!!”  I was floored and told him as much.  I said that in over two decades of appraising, I had never, not once, had a potential buyer whose sale did not go through due to a ‘low appraisal’ thank me for my services.  I asked him if I could use his quote in the testimonial section of my website and he agreed. In fact, he went on to say that if I ever wanted to send anyone to him for a verbal recommendation I could keep his number on speed-dial.


It can be frustrating at times to wonder if our good deeds ever get recognized or appreciated.  Sometimes we might wonder what others think of us.  In the end, I believe that no good deed goes to waste.  What we put into the universe comes back to us.