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Editor’s Note: Dr. Kübler-Ross is a 20th century psychiatrist who famously defined the seven
stages of grief: shock, denial, anger, bargaining, depression, testing, and acceptance.
Kübler-Ross and the Certified Letter
By Hal Humphreys of Appraiser eLearning
It can’t be good…the certified letter in your inbox. Lurking there in the basket, it’s wrapped in that return-receipt green. You sign for it. You look at it. Your heart skips a beat.
You run the letter opener along the fold. It is several pages. The reference line says “Case No. XXXXXXX.” Your heart stops. I would suggest that you take a minute to breathe. Calm yourself. But I know that’s nearly impossible. You read the letter. It’s passive in construct and official in language. Your mind is racing. You turn to the complaint and you remember the client. You remember the house. You remember the day. You want to throw up.
I would suggest again that you take a minute to breathe and calm yourself. But I’m pretty certain that’s not going to happen. You feel dread. You can’t believe this person has turned you into the state. You think—in rapid fire—of ways to make this go away. “How can I avoid this?”
You can’t. It’s a process.
You take the complaint and read it again. You want to call the person and give them a piece of your mind. You want to respond immediately with a rage-induced denial of every point. You want to point out that the complaint is baseless and in bad faith. You want to yell at someone. Don’t. Take a minute to breathe. Calm yourself.
You call a friend, a trusted colleague. You run the letter and the complaint by them. You ask if they know a guy at the board. You ask if they know the lender. Can you call the lender and make this go away? You check your email thread with the client. You look for things they said that you can use in retaliation. You seek in vain for a way out.
It starts to sink in. You have a complaint filed against you. You have to deal with this. This is not the end of the world. I know it seems stressful and painful but it’s just part of the process. There is a way to address the issues and, if handled properly, come out a better appraiser. Once you get through the depression part, it’s time to knuckle down and find solutions. This is where the hard work gets done.
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The first call should be to your E&O insurance carrier to report the claim. You should consult with an attorney. Have counsel review the complaint and review your responses. You should also consult with a professional appraiser advocate: an advocate who knows appraisal theory, USPAP, and real estate. Most attorneys know the law. Several attorneys understand real estate. Very few understand appraisal theory. This is why I always suggest an advocate who knows the real estate appraisal business. Armed with a competent attorney and an appraisal advocate, you can begin to test theories to address the complaint.
You’ve worked your way through the shock, denial, anger, bargaining, and depression. The depression may return on occasion. That’s normal. But the sooner you get to acceptance the better. Once you reach this stage, you’re ready to move through this. I’ve seen this process a number of times. I’ve reviewed complaints for the State of Tennessee on a fairly regular basis over the past several years. I can tell you without hesitation that this is not the end of the world. You’re a good appraiser. You approach your work with integrity and professionalism. Some people just want to be upset. Most complaints that I review are baseless and ill-informed.
Here are the steps you can take to mitigate the problem of being under investigation.
1. Talk to an attorney. This is an official state investigation and you need counsel. Your lawyer can review the complaint and offer legal advice. Any time you find yourself facing a regulatory review or investigation of any kind, you should avail yourself of the advice of counsel. If you have errors and omissions (E&O) insurance, there’s a good chance it will cover at least part of this expense. You are required to report the claim to the carrier in a timely manner. You’re going to have to let them know anyway, so you may as well get out in front of it with and maybe get the help of their attorney.
2. Hire an appraiser advocate. Your attorney will know the law. That’s his job. You need an appraiser advocate who knows real estate appraisal theory and is deeply familiar with the ins and outs of USPAP.
3. Get your workfile in order. Your state regulator has the right to request your workfile. Take some time to organize the workfile. If you make reference to external information (Marshall & Swift cost information, sales research, surveys, etc.), go ahead and gather that information and include the actual documents in your workfile. It’s okay to make reference in the workfile but take a few extra minutes to provide the source documents.
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4. Once you have the workfile organized, take a half day to review your report—the one in question. Read it once without considering the complaint. Review it for mistakes, calculation errors, and extraneous information. Next, take the complaint and review your report in light of the issues articulated in the complaint. In many cases, you’ll be able to address each issue simply and easily. It’s time and money out of your pocket but it’s an exercise you must complete.
5. If you made a mistake, own it. Just go ahead and get that out of the way. “The complainant is right in pointing out that I misspelled Squeezepenny Lane.” (Yes, there really is a Squeezepenny Lane in McKinney, TX.) Remember, there is no such thing as perfection. (SR 1-1 (c) states “perfection is impossible to attain and competence does not require perfection.”) Of course, you’d like to have no mistakes but the powers that be realize that mistakes happen and they’ve generously given a pass to us boots-on-the-ground appraisers in many instances.
6. Have your appraiser advocate review the report in question for USPAP compliance. Again, if you made a mistake, just address it— calmly and concisely.
7. Take your appraiser advocate’s notes and craft a reply. Keep it short. There’s no need to explain in great detail the circumstance of the inspection, the difficulties of sales research, or the lack of cooperation from the homeowner. Address the issues raised and attack them point by point. Again—and I can’t stress this enough—have your attorney review this document.
8. Get ready for a hearing, if you’re called. Bringing your attorney to a hearing can change the tenor of the meeting. Talk with your lawyer and your appraiser advocate and make an informed decision about whether or not to have counsel present for your hearing. I personally like to have the attorney there. Others disagree passionately.
9. If you go to a hearing, dress professionally. Slacks and a sport coat work. Wear a tie. A suit isn’t necessary unless that’s your usual attire. Be comfortable and look professional. Bring your file. Know it inside and out. Be ready to admit your mistakes and be ready to explain your actions. Answer the questions asked, NOTHING more. Be polite. Be helpful. Do not be—in any way— obstinate or combative.
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About the Author
Hal Humphreys is a partner at Appraiser eLearning. He is a lifelong learner and educator. He is a practicing Certified Fraud Examiner and professional investigator. Hal is a CDEI certified instructor through IDECC. He writes, lectures, and he walks … a lot.
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