Professionals make mistakes... my rant

This past week I wrote an offer on a property in Edmonton that was subject to financing. Of course, with all such offers, it was necessary to get an appraisal for the bank... paid for by me, the buyer, of course.

Well the appraisal was done, and the next day my mortgage broker called me to say the appraiser had stated the rent would be $500 less than I had allowed in my calculations. After asking a few questions I learned that the appraiser had understated the achievable rent for the main unit, a 3 BR townhouse, by about $500.

The mortgage broker said we could reposition the mortgage, but it would cost me another 1/4 point in interest. While I was angered by this error, the deal still made sense, so I was okay with it. In the meantime, I had five people working to get the appraiser to correct her very obvious error, which it turned out, came from a lack of knowledge of the rental market.

But, the mortgage broker kept asking questions about the legality of the basement suite. It turns out the appraiser has also said that the suite was illegal. She was unfamiliar with changes in Edmonton's policy on secondary suites. Again, it took five people a couple days (the same couple days as before) to get the appraiser to revise her appraisal report.

My point in this is that even professionals make mistakes. Keep your eye on their ball to ensure that their mistakes do not cost you money in the long run. When this deal closes I will be asking the appraisal company for a FULL refund of my fee. This professional did not have a full understanding of all the things she was commenting on. The bank relied heavily on her original opinion, and I paid for that error.