So, at the moment I’m working on getting a home equity line of credit. The county sends me a doohickey every year that tells me how much the house is worth. So does Remax. So do about 200 mortgage companies. They all pretty much agree on how much the house is worth.
I called [name deleted] to see if they had any good programs that could help me out. They asked how much the house was worth, and I told them. After all, all of those people that send me doohickeys can’t be THAT far off.
The lender, [name deleted] then informed me that according to their system, my house was worth $30,000 more than I had just told them. “Why did you ask me if you already knew?” I asked. “Well, we just want to make sure your number isn’t higher. We’ll do a full appraisal, of course.”
So this morning the appraiser came to my house. He walked around the outside (no doubt laughing at the woodpecker hole), measured the length and width, and then knocked on the door. The dogs went crazy, so I took the opportunity to grab both of them and then sit on top of the spot where they ripped the carpet up. I figured the appraiser didn’t need the dogs jumping on him, and I didn’t need him seeing the hole in the carpet. He wandered down the hall and looked into my bedroom.
Then he walked back to the front door, turned around and said (I’m not making this up) “So, how much do you think the house is worth?” I’ll make up some numbers to illustrate the story… I said “Well, the county and Remax say the house is worth 166k, and that’s what I told the lender. The lender then told me THEY think the house is worth 190k.” The guy just looked at me and with a straight face, said “Well, where in that range would you like the appraisal to come out?”
So I said, “Well, the higher the better, I suppose.”
Then he left.
But this got me to thinking…. if the appraiser is supposed to be objective, but he’s asking me what I want the number to be, doesn’t that undermine the bank’s interests… and isn’t that foolish considering they hired him and they are the ones with something to lose if I don’t pay the loan?
And that got me thinking about the fact that 99% of appraisals come out EXACTLY the amount that the bank is attempting to loan. That’s when I realized that our entire economic system is based on the premise that the more lenders can loan out, the better off the world will be. If appraisers stopped being dishonest, banks wouldn’t be able to lend, and the entire economy would collapse as people would be forced to live within their means.
Who knew appraisers had so much power?