The Appraisal Blog

Lawsuits against appraisers who have conducted appraisal services for lenders are beginning to occur.  In this case, the lawsuit was settled by the Appraisal management company AMC Links.  The terms of the settlement were not disclosed other than that the appraiser had to watch a documentary called: "Our America: Lowballed."  The AMC "denied any wrongdoing" and the appraiser did not admit to engaging in "unlawful discrimination."

I was able to locate the subject doing a public record data search.  The subject is located in is Marin City just north of San Francisco.  It was a 1,720 sf 4/2 built in 1963 on a 9,600 sf lot.  They paid $550,000 in 2016, conducted a lower level add on sometime between 2019 and 2022.

The first appraiser placed the value of the subject at $995,000 January of 2020.  The second appraisal place the value at $1,482,000 5 weeks later, or 49% higher.  Obviously someone was wrong.  But who?  The default opinion seems to always be the higher appraisal was correct.  But was it?

The first appraiser used 2 sales in Marin City and 1 in Sausalito.  The second appraiser used 2 sales in Marin City and SIX in Sausalito.  Marin City is a small enclave of attached and detached homes, condominiums and businesses just north of Sausalito.  Have you heard of Sausalito, the ritzy community just north of the Golden Gate Bridge from San Francisco?  Of course you have.  Have you heard of Marin City?  Me neither.

Without getting to deep into the analysis each appraiser conducted, I took a look at Zillow ... which will allow you to look at the value of a property over time:

01/2020: $892,000
02/2020: $1,100,000
03/2020: $1,200,000
Current: $1,250,000

And here are some actual comps another local appraiser provided in one of the on-line forums:

50 Buckelew sold for $899,000 on 08/19.  1700 sf 3 bedroom w/ and ADU, remodeled kitchen and baths.
21 Buckelew sold for $1,100,000 on 05/21 (15 months after the 1st appraisal) 1590 sf 4/3 remodel.  Property sold higher than the 1st appraisal, which is to be expected, the market was appreciating, and WELL below the second.

I am not an appraiser in this area.  However the fact that properties sold well below the second appraisal after the original valuations is telling.  And it is curious that the second appraiser utilized so many sales in Sausalito versus Marin City.

I wonder how homeowners in Sausalito would feel about an appraiser going to Marin City for sales data to value their home?

Thoughts?

https://abc7news.com/home-appraisal-lawsuit-settlement-our-america-lowballed-systemic-inequities-in-racial-bias/12921112/