Bad appraisal for VA loan - complaint filed/restitution

[Martinjmpr]

So I just did a basic google search for the question "Who does a real estate appraiser work for?" and got this:

"The mortgage lender or financing organization typically hires the appraiser. "

Assuming that's true in all cases (obviously a Google search is not real "legal research"), although it's clear that YOU suffered a compensable injury by overpaying for the house, the question would be whether you have to file a claim against the lender or against the appraiser.

If you didn't hire the appraiser (either directly or through a POA arrangement) then the appraiser may have owed no legal duty to you, the buyer. His duty was to the lender.

Certainly the lender is going to be pissed that they loaned money on a house for more than the house was worth, but the question is going to be this: If you relied detrimentally on the appraisal done by an agent of your lender and paid too much, do you have recourse against the lender for the negligent act of their agent, the appraiser? Or does the law presume you to be sophisticated enough to be responsible for negotiating a price that is agreeable to you and to look out for your own interests?

From a legal standpoint the question would be whether you, the buyer, are entitled to rely on the representation of the appraiser. That may be controlled by contract (your contract with the lender), or by statute, or by case law in that state.

[Bailey Guns]

I went thru an appraisal nightmare when the ex re-fi'd the house into her name. The appraisal was important because it would determine my share of the equity.

We paid $330k for the house then added a $30k garage/shop. We did some other improvements as well. According to real estate records for the area homes increased in value, on average, 5% to 12% per year from 2015 thru 2019. This knucklehead came out, did the appraisal with comps, etc and submitted his report. According to him the appraised value was $388k. Both the ex and I figured the appraisal should've been in the $425k ballpark. I had another appraiser review the report and he agreed it seemed low. But, short of some sort of egregious error, like what happened to the OP, there was nothing I could do unless I wanted to take it to court...and there wasn't. I wasn't in a position to do that or I would've. It also wasn't my re-fi so I couldn't just hire another, competent, appraiser.

She's going to be selling the place in the near future and I'm gonna be pissed when that place sells for $425k. His shitty appraisal probably cost me $15k to $20k. And there are some weird rules about appraisals. That house is 3200 sq ft. But because half of it is below grade, only the portion above grade counts as livable area, regardless of how well the below grade area is finished off. I learned a lot about appraisers. I view them about the same as "journalists" in terms of their integrity.

I hope this works out for you, CS. It's kind of a helpless feeling.