Industry News

Real estate’s dirty little secret

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Editor's note: Bending the numbers on home valuations is often referred to as appraisal inflation, and appraisers say it's common for colleagues to do this in order to satisfy clients and stay in business. Appraisers nationwide say commission greed among their clients is feeding the corruption. In this three-part series, we examined the problem and what the industry is doing to try to stop it. (See Part 2: Real estate appraisal laws lack teeth, funds and Part 3: Two sides to appraisal technology debate.) Verne Hebert, owner-operator for Ashwood Real Estate Appraisal Service in Kalispell, Mont., recalls one home appraisal he conducted where the appraisal came up $400,000 short of the number that was needed to close the transaction. For days, the mortgage broker, both Realtors and the underwriter at the bank called him, and one Realtor even offered to take him out to dinner to discuss the appraisal. Hebert said he has also received some sobering advice from clients, "'Here's the de...