Wednesday, July 23, 2003

Do bribes work?

The wife and I are early in what for us is a multi-stage process of buying a new house (more on that to come in days ahead). The part we're in right now involves refinancing the current house to a super-low 3-year ARM rate to provide some financial cushion in case we end up carrying two mortgages for an extended period of time.

It's interesting how the financials of pulling a refi on a house you plan to sell in a couple of months can actually work out well. The costs we'll pay to close the new loan are actually slightly less than our current monthly payment; and when you get a new loan you don't make a payment until the month following the first month after you close, so it's really a wash there.

Anyway, I've got an appraisal scheduled for the current house on Saturday. Back when I refinanced for the first time just over a year ago, I used the lower rates (7% -- yippee!) to get some cash out of the house to pay off all my other debt while keeping the same basic monthly payment.

And that was a good deal. Bye-bye credit card debt and all that.

But now, with that debt riding on top of the cost of the house (and with real estate prices no longer skyrocketing), it's doubtful that the house will appraise high enough for me to have 20% "equity" and avoid the best thing to ever happen to mortgage lenders - PMI.

It's not a huge deal; even with PMI we'll save more than $300 per month. But it raises a question in my mind:

Could I pay off the appraiser to set my home's value where I need it to be?

For the purposes of the refi, Mr. Appraiser is the sole determiner of my home's value. He'll come out on Saturday, armed with his tape measure, digital camera and note pad, and what he ends up writing down as my home's "value" will determine if I pay PMI of about $100 a month.

He'll make $250 to do this.

Could he be bought for another $100? $200?

I did a Google on "+bribe +house +appraiser", but that was inconclusive. The first result was some message board where somebody asked "Can anyone tell me how I can get an appraiser to appraise a house for the value that I want?"

One reply was "Typically a substantial under the table bribe might work. Assuming that the appraiser will not report you. While this is highly illegal, it is the only way I know of."

That's promising, I guess. Some other guy wrote that appraisers are going to jail in Chicago and Baltimore for taking payoffs.

The rest of the results were state laws governing appraisers and whatnot.

I don't think I'd make a good briber, anyway. I don't know how to go about it the proper way.

Is it the "Florida State Handshake" where I slap a C-Note in the guy's palm when he's leaving? Do I leave bills on the kitchen counter hoping he understands what I'm doing and takes it? The direct approach of "What'll it take to get my house to appraise for $X?" Having the wife wash his car while he's doing the appraisal? I just don't know.

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