real-estate civil-law
Can I sue an appraiser for assigning a low value to my property?
<p>Due to the low value assigned to my home by an appraiser, I didn't get a loan and it did cost money.</p>

<p>However, when I went to another bank, two new appraisers gave a higher value and I was able to refinance my mortgage. </p>

<p>An appraisal is a professional <strong>opinion.</strong> As such, you can't sue someone for an appraisal and win, even if it is "low," unless the opinion clearly violated professional standards.</p>

<p>There are three basic methods of appraising a house: 1) replacement cost 2) multiple of rent and 3) "comparables," that is, what do similar houses in the neighborhood cost.</p>

<p>In an "ideal" world, the three methods would give similar values, but in practice, they often give very different values. That is particularly true between a "disciplined" appraisal method such as X times rent, and a more "subjective" valuation based on how "hot" an area is, and how many people want to live there, which might bring about a multiple, Y, higher than X (the general multiple) for just one area.</p>

<p>As long as an appraiser used an accepted method, he wouldn't be liable. The only way is if he used a totally unreasonable assumption, like assuming that a mortgage would have to pay an interest rate of say, 10% (not uncommon even thirty years ago, but out of place today).</p>

<p>You can sue. You will lose.</p>

<p>The valuer doesn't work for you so you have no claim under contract. Under their contract the valuer's primary duty is to their client: the bank.</p>

<p>You could sue for negligence but to do so you would need to show (among other things) that:</p>

<ul>
<li>They owe you a duty of care. Given that any duty they owe you is subordinate to the duty they owe the bank this is a long bow.</li>
<li>They failed in that duty. They must have been negligent in their valuation: do you have any evidence of this? A different value from a different valuer at a different time isn't evidence of negligence. If they did all that was reasonable for a valuer to do to arrive at their valuation then they weren't negligent.</li>
<li>You must have suffered harm. What did you lose?</li>
</ul>

<p>You could try to sue for anything, right or wrong... but you'll probably spend more money on the lawyers and not get anything in return. </p>

<p>I would say best to just let it go, unless you lost more than $50k.</p>

<p>This could vary from jurisdiction to jurisdiction. Under the general principles of common law, if you hire an appraiser, and there is no contractual or statutory waiver of a right to sue, you would have to show that (1) there is the standard of professional conduct applicable to the appraisal profession in preparing the appraisal that requires the use of the best available comparables (probably with an expert witness certified as an appraiser), (2) the appraiser in this case engaged in conduct that breached the standard of professional conduct applicable to appraisers, (3) this breach caused you harm that was reasonable foreseeable at the time the appraisal was prepared, and (4) that you suffered quantifiable damages that were foreseeably caused by this breach of duty. </p>

<p>You would also have to show that there were no reasonable ways to mitigate the harm caused by the low appraisal (such as retaining another appraiser to redo it) and if there was a way to mitigate the harm you would be limited to the damages you would have suffered if you took that course of action.</p>

<p>Realistically, this would be extremely difficult, but not necessarily impossible to do. It would take really egregious facts and serious damages caused by the conduct to make the case stick, and I doubt that you could find an appraiser willing to testify as an expert witness that this conduct rose to a violation of the standard of care for an appraiser, even if it was not a case of "best practices" in the profession. And, showing that the appraisal caused you harm would be particularly difficult.</p>

<p>Maybe more facts of the case would make it sound more plausible, but for a case that would cost perhaps $75,000 of attorneys' fees and costs to litigate in the U.S. with no prospect of an award of those fees to you if you prevailed in the U.S. (except recovery of your filing fees, out of pocket costs and expert witness fees for things other than attorneys), and a risk of paying the other side's expert witness costs if you lost, the provable harm would have to be in the many hundreds of thousands of dollars and the mistake would have to be very glaring before that kind of case would make sense to seriously consider bringing. Also, often there are special procedural rules for lawsuits against licensed professionals that vary quite a bit from jurisdiction to jurisdiction, and there are often waivers of rights in listing agreements.</p>
