Many people who own their own homes or investment properties find it disturbing that another individual has authority over the value of their home. Professionals such as assessors, appraisers and inspectors have experience and training in identifying how to accurately price individual real estate holdings.
The figure that the professional eventually comes up with will determine how much financing you can secure for a property. It also impacts how much tax you pay on a property. Most people are happy to accept the figures provided by these professionals.
However, both mortgage brokers and potential home buyers may find themselves in a situation where they disagree and want to influence the outcome. Doing so may be grounds for a future charge of mortgage fraud.
Appraisers and assessors help keep the local real estate market balanced
The values of individual properties vary drastically from state to state or even among cities in the same state. Home values in Florida, on average, may be higher than the average property value in another state, such as Alabama.
However, they are also likely lower than the average property price for a similarly sized home in California. In order for financial professionals to put the right price on a home, they have to do thorough research and carefully inspect the property.
Generally, the best practices for this field of work include comparing the home to similar properties nearby, carefully reviewing the condition of key systems, including foundations and roofs, and looking at issues such as the performance of nearby schools.
Many subtle factors influence the end results of an appraisal, inspection or assessment. A payment or bribe by a seller, buyer or broker should not be one of them.
Bribery is illegal, and, in this situation, may be mortgage fraud
You may need to recoup a certain amount of money from the sale of your home in order to purchase a new one. You may simply hope that the appraisal comes in at a certain amount to ensure that you qualify for a mortgage on a property.
No matter how tempted you may feel to take matters into your own hands, offering money or extra business to an appraiser or an assessor for artificially inflating the value of a property is not the right step to take. Offering an incentive for an appraiser, assessor or inspector to change the value of your home in your favor is not only bribery, but it can also be a form of fraud.
Banks count on these professionals to protect their investments
Most mortgage companies are big businesses that operate across multiple counties, if not multiple states. They simply cannot bother with directly vetting the information about a property. In order to ensure that they are not defrauded by unethical people, it is common practice for mortgage lenders to require an assessment to validate the value of the home prior to closing.
If someone involved in the transaction influences the assessor or appraiser to inflate the price, a lender may provide more financing than the home can actually stand as security for. In that situation, if the homeowner defaults in some way, the bank may take a substantial financial loss.
Regardless of whether you work as a mortgage broker or you want to buy a home, it is never a good idea to attempt to influence or change the price a professional assigns to your property. Doing so could result in the allegations of mortgage fraud, which can have financial and criminal consequences.