Property Valuation
A West Virginia appraiser who is pressured by a loan officer to hit a specific value that would qualify the borrower for a larger loan should:
ACooperate since the loan officer needs the deal to close
BRefuse to adjust the value to meet a predetermined target — the appraiser must remain independent and objective✓ Correct
CNote the request in the appraisal report but comply to keep the business relationship
DSplit the difference between the market value and the requested value
Explanation
USPAP and federal law prohibit appraisers from adjusting values to predetermined targets. Pressure from lenders, borrowers, or others to reach a specific value must be resisted.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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