Earlier this month, Pasco County found a foreclosed home in Aloha Gardens in Holiday that it wanted to buy with federal stimulus money. But first it needed a private appraisal.
So officials sent out an appraisal request letter. It gave the address and the $85,000 contract price.
But the letter also contained something else: The amount the appraisal needed to be for Pasco to buy the house.
"The (federal housing) program requires that the sales price be at least 1% less than the appraised value," the letter said. "The appraised value must be at least $86,000 in order for the County to approve the purchase."
That's the standard form Pasco County Community Development Division has been sending out as it uses much of the $19.5 million in federal Neighborhood Stabilization money to buy foreclosed homes on behalf of nonprofit housing agencies, fix them up and get them back on the market.
But that appraisal form could be trouble, say a number of appraisers contacted by the St. Petersburg Times last week and shown or read examples of the request letters.
"I'm very shocked to see something like this from a county," said Debra Dietz, a Sarasota appraiser who is on the board of directors for West Coast Florida Chapter of the Appraisal Institute. "It's unethical."
The problem, say Dietz and others, is that Pasco is telling the appraiser the value it needs.
Federal guidelines, which are incorporated into state law, say appraisers should refuse assignments that include the reporting of "predetermined" values. And that's how the forms could be construed, appraisers say.
"That's a real problem," said Tampa appraiser Michael Colias, also a director on the institute's board. "Appraisers can't take an assignment like that and follow (the guidelines)."
"I, as an appraiser, would not take an order like that," said Fran Oreto, a west Pasco appraiser who sits on the Florida Real Estate Appraisal Board.
County officials say they hadn't heard any complaints until a reporter asked about the forms.
"We never ask anybody to give us a predetermined value," said David Edwards, who oversees Pasco's real estate division. "We've had appraisals come in that didn't work. If the values didn't come in where we needed it, we didn't beat them over the head over it."
Under the federal rules, homes must be bought at a discounted price. Local governments must buy the homes at least 1 percent less than the appraised values. Initially, the sales price had to be at least 15 percent less than the appraised value.
George Romagnoli, Pasco's community development manager, said that when the county first got its federal Neighborhood Stabilization funds, it put out appraisal requests with little information, not even the contract price.
Appraisals were coming in too low for the county to approve the purchases.
Romagnoli said he went to Edwards for advice, and Edwards told him "it's absolutely appropriate to tell the appraiser what our mark is."
Edwards said in an interview that appraisals had been off by "minuscule" amounts, such as $250 in some cases. He said he had called appraisers and asked if their comparable sales would support a slightly higher amount.
In some cases, they did. In some cases, they didn't.
"It's part art, it's part science," he said.
Romagnoli said Pasco has requested appraisals on about 500 homes. The county could not purchase about half of those, he said, a number of them for appraisal reasons.
Of the more than 200 homes Pasco has purchased on behalf of the nonprofits, the typical sales price has been about 95 percent of the "as is" appraised value, according to an analysis of county figures.
Romagnoli said that, in effect, Pasco is simply doing the math for appraisers since the federal government's 1 percent requirement is already publicly known.
"We could take that (language) out now," he said, "and everybody knows the rule anyhow."
Appraisers hired by Pasco get $250 per appraisal. Some of those contacted by the Times last week declined to comment. Others said they didn't see a problem.
Nan Charity, a Spring Hill appraiser who has looked at four houses for Pasco, said she didn't recall the language. But she said she didn't see it as any kind of pressure.
"They don't ask you to do anything funny," she said. "It's very straightforward."
She said talk to the contrary is "sour grapes" from appraisers who aren't getting the work.
Josie Wallace, a New Port Richey appraiser, also called the setup a "straightforward process" though she declined to comment specifically on the request forms, saying they are "confidential."
But other appraisers who aren't working for the county say the wording on the request forms is reminiscent of what got many in their industry in trouble.
Appraiser-related fraud contributed to the real estate bust — and helped spur a federal code last year that put even more guidelines in place when it comes to lenders and appraisers. With some exceptions, the Home Valuation Code of Conduct bars direct contact between appraisers and loan originators, meaning appraisals must now be arranged by a third party.
Tim Shea, a Trinity real estate agent who maintains his appraiser's license, had problems with the forms as well as some other parts of the program. He took his concerns earlier this month to the Florida Real Estate Appraisal Board, which is the statewide licensing board.
He and two other west Pasco real estate agents, Bob Memoli and Victoria Barley, also met with state Sen. Mike Fasano, R-New Port Richey, last week to discuss their concerns.
Shea said he supported the program, but, "You've got to do it right."
The Department of Business and Professional Regulation, which is the enforcement body for the appraisal board, declined to discuss the request forms, saying that commenting might call its objectivity into question.
Joni Herndon, a Tampa appraiser who sits on the Florida Real Estate Appraisal Board, said that, in the end, it's up to the appraisers to let their clients know the rules.
"We've got to let our clients know what's acceptable," she said. "It's our rear ends on the line."
But Oreto said that having a government client may make appraisers less vigilant.
"Appraisers are trying to do the right thing, and they're not sure because it's coming from the government," she said. "It's coming from the government so it must be okay."
Jodie Tillman can be reached at [email protected] or (727) 869-6247.