The appraiser of my commercial property, apt. bldg, went into a bad neighborhood for his comps, can I sue?

Question

I own an apartment building in a nice neighborhood. I wanted to re-finance the building. The appraiser, who was hired by the lender, and lives 2 hours away went into the bad neighborhood two miles away from my property, and used those as comps. Not too much has been sold in my hood for a couple years. he came in about half the value. Can I sue him? Who do I sue. This is 100s of thousands $$$ of loss. He is comparing my property, to those in crack neighborhoods. WHAT CAN I DO??

Answer 1

You really have no basis to SUE, per se, but you CAN challenge the appraisal. The way you would do this is to have the comps pulled from your area, or a comparable area, and redefine the value. At that point you contact his supervisor, and make a complaint, and ask that it be reevaluated using the appropriate comps. There are several basis for making an appraisal...recent home sales, and income basis are probably the most appropriate for your situation.
I suggest that you contact a Realtor, that has access to the MLS to assist you in looking up recent sales in your neighborhood to find the appropriate somps, and to have them do a CMA. A good Realtor, that knows your market SHOULD be within 5% of fair market value.
Once again, since the appraisal is only a professional OPINION of value, usually the only liability that an appraiser can incur is that of the price of the appraisal. However, if you can prove gross negligence, then you can report it to the state licensing board, and you may get somewhere with them. I recommend that you start with getting a CMA, to ensure that you have a REAL case of negligence, and then that you challenge the appraisal from within the company. If all else fails, have another one done. They are not cheap, but you may consider it for your peace of mind. Remember, the appraisers do NOT work for you, they work for the bank, to ensure that the bank does not get stuck with a below-market valued property. Complain to the bank. If they value you as a client, they will listen.

Answer 2

Suing can be an option. As a commercial appraiser here is some advice. First, appraising commercial property is a whole different type of appraisal then residential. There are limited comps and you will have to travel a far distance in some cases to find them; not like residential where there are many recent sales in close proximity. If the appraiser went to an inferior location he/she should be making positive adjustments to the value of your property to make up the difference. You should take it upon yourself to find comps in comparable neighborhoods that the appraiser overlooked (a realtor could help you out). Also, the appraiser is at a disadvantage if they are unfamilar with the area. If the appraiser is open you can resolve this issue with him/her armed with some solid evidence. Also, you might want to consider using a different bank that might be using a local appraisal firm.

Answer 3

Um mm what are you going to sue over? It's one appraisal,why don't you request that your lender have another appraisal done this time correctly by someone who is familiar with the neighborhood/demographics etc. They are suppose to be unbiased and factual if you have a discrepancies with the first findings you need to ask them how they determined the comp...go from there...if you start making threats of "suing " off the bat it won't help your case until it is valid.I would start by asking for a second appraisal and explain why you felt it was un-fair or go to a different lender...good luck! :)

Answer 4

Why go through the lawsuit? It may take you up to 9 months to get the issue resolved. Instead, focus on disputing the appraisal or review thereof. Hire another appraiser if you have to. There are better ways to handle your issue. It may not be too late to find another lender and get the money you deserve. Good luck.

Answer 5

Hate to be obvious but, why not just call a real estate attorney and get his input over the phone for free.