Sad.
That’s the only search-engine search that has given hits on my blog. It happened AGAIN this past week! And, that’s still without promoting the blog since it’s really not been ready for the big wide world.
Did YOU find me on that (or similar) search? Let me make you happy, then: YES, YOU CAN SUE AN APPRAISER! Of course you can. You can sue anybody you damn well please. Whether you have a case, or not, is a different matter. I can’t tell you THAT, because I’m not a lawyer. However, if you’re the one who was looking for “can I sue an appraiser for a faulty appraisal” - let me ask you this: who are you that you can judge an appraisal as being “faulty”? And, at that, faulty to the extent that it merits a lawsuit?
What IS a faulty appraisal??? Faulty?
The Appraiser has to abide by USPAP (Uniform Standards of Professional Appraisal Practice). Foremost is to not be misleading in the approach to and conclusion of value. In my opinion, everything else just follows suit. Competence, verification, research, reporting, identification of the problem (i.e., HOW to appraise a particular property for the particular purpose at hand). If any of those factors are ignored or not adequately addressed, the end result is most likely going to be misleading.
A lack of competence is often a factor when an appraisal appears “a little strange” - and most of the time that reflects a lack of experience. Typically, this does not lead to a disasterous or misleading value conclusion, and depending on the situation would probably not get the appraiser into deep trouble - more on the “reprimand” level. I very seriously doubt that the average consumer would know enough to even be able to identify just where the actual problem lay, other than possibly just finding the report “strange”. Yes, the appraiser should know his/her limitations and ask for assistance in such a case, but maybe he/she didn’t see any particular problem and therefore saw no need to ask. There would have been no intent to mislead. In my opinion, a case like this would have to be quite extreme to warrant severe punishment. One mistake does not a bad appraisal make - it actually takes a compounding of errors to get there. And most appraisers do not want to get there!
Intentionally misleading is a different ball of wax. That’s when the appraiser “knows” a property is worth, say, $100,000.- (fair market value) but yet reports an appraised value of, say, $125,000.- (fair market value). Or - actually - the other way around, too! The appraiser is “making it happen” by bending the rules just enough to make things look right, for the sole purpose of inflating (or de-flating) the value or distort some other aspect of the property being appraised. This is pure deception and I cannot see justification for this under any circumstance.
As far as the current market, especially with all the “loan modifications” offered, one shock to the system may be that a lot of areas may not have distinguishable REO markets versus “open/fair” markets. In other words, THE market may be dictated by the REO’s. That’s not pretty and doesn’t make the appraiser happy, but if that’s what it is, that’s what has to be reflected in an appraisal, even if the subject property is NOT REO (or similar distress situation).
Did you know that an appraiser cannot charge a percentage of the appraised value for his/her services? It has to be a flat fee, quoted up-front. Under some circumstances the fee can be adjusted, but it can never be based on a percentage of the appraised value.
Ponder the consequences of this rule, if you will… 
