In Southwest Non-Profit Housing Corp. v. Nowak, Southwest, a company which buys distressed properties and rehabilitates them for resale, sued 3 appraisers for negligence in the preparation of appraisals of 3 separate properties, alleging that the negligent appraisals had caused the lenders to refuse to fund the loans when the appraisals on the properties came in significantly below the sale price.  The three cases were consolidated for purposes of Appeal.  In each case the trial court had dismissed the lawsuit on the grounds that the seller, Southwest, had not relied on the appraisal and was therefore not owed a duty by the appraisers.  Southwest cited a previous case which had held that a buyer could bring an action against an appraiser, where the appraised value ultimately appeared to have been inflated, on the grounds that the buyer had relied on the appraisal to close the sale.  In contrast, Southwest had already signed contracts to sell for the properties for a sum certain and did not rely on the appraisals to set the sales price.  The Court of Appeals upheld each of the dismissals this past March.  In considering this case, if a seller could hold the threat of a lawsuit over the head of an appraiser if the appraisal was not at least as much as the sales price, such a threat would inevitably chill the appraiser’s impartiality and skew the entire market.  As the Court of Appeals noted it is lenders who commission the preparation of  appraisals in the first place and it is in the best interest of the lender and buyer that a property does not sell for an amount significantly in excess of its market value.  Although not mentioned in the decision and perhaps not practical, but a seller can commission his own appraisal if he wishes.  Sellers’ real problem in this area is that sales contracts uniformly allow lenders and buyers to back out of contracts where the property does not appraise for the sales price.