What constitutes a lawsuit, can I sue an appraiser?

Question

Not that I want to get involved in a law suit, but I am wondering what constitutes one in the situation I am in. I have a deal on a duplex, where the financing has been delayed for several weeks because of the appraisal process. On my estimate I am being charged two appraisal fees of $450, and one reappraisal fee of $150. Only to receive and email from my lender stating the underwriter may not be able to finance the deal due to the fact there is only one furnace, one A/C unit and one set of duct work.

I emailed my lender back as I have been through this house several times and after looking at the appraisal report and pictures there was nothing concerning the attic. I sent my lender back and stated had the appraiser went into the attic, which is not hard to find being as it is a man sized door when opened leads to a full size set of stairways leading up stairs to a standing room floored attic with a complete furnace and duct work running into the upper unit.

My question is

1. If the deal falls through and I lose my $1,000 earnest money can I then sue the appraiser for non performance? effectively also costing me a rental property that would generate $1,500-$1,800 monthly.

2.  If the deal now does go through after making my lender aware, and I am being asked to pay $1,050 in appraisal fees, can I sue the appraisal company for non performance of those fees being that I am the underlying reason if the deal goes through it will be because of information I provided.

I understand no one in this forum is in any way to give legal advice, but this is just a general question and I am obviously frustrated as it is a fresh wound. Is it legitimate to be thinking this way?

Wayne Brooks · Answer

Not even close to being a winnable lawsuit, let alone for a couple grand.

Dominic Bouchard · Answer

This isn't a legal advice, but I don't think so.

You'll need to prove a professional negligence on the part of the appraiser and non-performance would not qualify for that.

Honest mistakes happen all the time, and by reading your post, it's possible that the deal goes through anyway.

Hence proving the absence of a definitive link between the appraiser action and your deal.

Maybe you could arrange something with the appraiser company instead?

Hope that helps.

Drake Espenlaub · Answer

I made it through, I took it to my lenders attention that there is an hvac furnace in the attic and we got it through! Thanks for the advice!

Kevin Manz · Answer

Welcome to buisness. If others performed even at half the rate as we do, running a buisness would be alot simpler.What deciphers the great from the dreamers, is if you can perform despite others,and navigate thru all the crap. Weve all been taken by contractors, tenants, appraisers, and you name it. The great are great because we make it happen no matter what. If you try suing everyone that makes your business harder or loses you money, your going to be a broke dude. As Dave Ramsey says, "Business is easy until people get involved". Best of luck @Drake Espenlaub

Scott Steffek · Answer

If you truly feel like pursuing it, take them to small claims court. It won't cost much to file, but that's a tough case to win. Good Luck.

Adrien C. · Answer

if the sale is contingent on your ability to get financing, you should be entitled to getting the EMD back if you can't get financing. If the sale is not contingent on financing, you're SOL and look at it as a $1000 lesson plus appraisal fees. Not worth the time or money as most have said to go after the appraiser. In RE, you win most and lose some.

Andrew Johnson · Answer

@Drake Espenlaub Like most others, I'd say that there's no ROI for your time or money in suing the appraiser.  And you'll never be able to sue for "what the rental property would generate" in my purely-non-legal opinion.  But I'm not a lawyer so who knows.  What doesn't make sense to me is why you're being charged for 2 appraisals and 1 re-appraisal.  So there were 3 trips to the property and nobody ever went into the attic?  Or they went the third time but not the first two?  Why were there two trips?  Maybe you can get the appraisal company to refund one of those appraisals?  I don't know but it makes a lot more sense to ask for than that to try and sue them.

John Thedford · Answer

Forget it!

DISCLAIMER: this is NOT legal advice! I say forget it because chasing 1K will be more trouble than it is worth even IF you had cause.

Chris K. · Answer

@Drake Espenlaub

1. You can sue anyone you want. The question is whether it's wise to do so. In PA, you generally can't recover attorney's fees in a situation like this. Even the most mundane, simple lawsuit between parties will cost anywhere from $5,000 to $10,000 at the trial level.

Another way to think about this: many lawyers charge around $200 to $300 for an initial consultation that can last anywhere from 30 minutes to an hour of meetings and document review. Are you comfortable paying that amount to discuss this issue with an attorney from Indiana only for the attorney to tell you that you have no case? If the answer is no, then you probably don't have a meaningful case.

2. No. I would have a hard time making that argument to a judge with a straight face. In PA, you again will need to weight the balance of paying attorney's fees.

I also don't know where you invest. But if you invest in a smaller area, think very carefully before suing another professional or party within the area. For example, there are probably about 10 appraisers in my area that regularly do work for the banks. As a lawyer, investor, and just a community member, I will run into these people over and over again. If you decide to sue one of them, you are not only burning the bridges with the appraiser but potentially other related parties. Is that worth it over $1,000?

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.

Nick C. · Answer

I'm not a lawyer, but I would be shocked if the appraiser could be sued for this, only because appraisers would be getting sued constantly. Almost anyone who has bought and sold houses on a consistent basis has had appraiser issues at one time or another that has cost them deals.

What constitutes a lawsuit, can I sue an appraiser?

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