"underwriting conditions" valid or not?

Discussion in 'Urgent - Help Needed' started by Ca Ar Independent, Oct 7, 2011.

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  1. Ca Ar Independent

    Ca Ar Independent Senior Member

    2
    Sep 24, 2011
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Can anyone please clearly define what "underwriter request" is legitimate and part of "clarification" of the appraisal and what is NOT legitimate and outside the scope of work. I have had occasion (one currently) where the "Underwriter" (for the bank or the mortgage insurance company?) has requested an "appraisal revision" in which I am asked to add an addendum and complete the cost approach for a detached condo (on the condo form). From my perspective, this is outside the appraisal scope of work, not my area of expertise and essentially the lender's attempt to have me do additional workm2: so they can close the loan. I have put the request back to their appraisal department for direction, but what IS and what IS NOT my responsibility is unclear. Is the appraiser required to do endless revisions each time a different UW looks at the appraisal? AM I required to comply with "requests" from the mortgage insurance company? My mortgage broker friends are unclear about this...as am I.
     
  2. Randolph Kinney

    Randolph Kinney Elite Member

    14
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    You can explain that the cost approach is not applicable in this assignment and is not meaningful and not necessary to determine market value in a condominium development. There is an undivided interest in common ownership that makes this outside the scope of work.
     
  3. Riick

    Riick Elite Member

    11
    Aug 14, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Delaware
    ^^^
    EXACTLY..
    What is the cost to build when the owner of a condominium unit owns "the structure" from the paint film inward, and in one sense, owns airspace and the right to use that space.
    (( In some areas it's the paint film, in others, inward from the wallboard.))
     
  4. Ca Ar Independent

    Ca Ar Independent Senior Member

    2
    Sep 24, 2011
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    This (almost verbatim) comment is already IN the appraisal in the approach to value comments. Thank you for taking the time to respond. I believe this is a ridiculous request and well outside of the scope of work.
     
  5. Smokey Bear

    Smokey Bear Elite Member

    0
    Dec 8, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    CA_AR - off topic, but what part of Cali are you in? I'm making a list of OC (or closeby) appraisers to schedule a lunch so we can all meet each other.
     
  6. 23Degrees

    23Degrees Senior Member

    3
    Jan 31, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Beyond the argument that it is not necessary etc. that others have brought up it could also be helpful to point out that this was not a condition of the original engagement.
     
  7. zdfenton

    zdfenton Junior Member

    2
    Nov 13, 2008
    Professional Status:
    Certified General Appraiser
    State:
    Wisconsin
    What's the big deal if you have to add it or not? If your fee didn't include a cost approach, let them know what you will additionally bill them for this service
     
  8. Terrel L. Shields

    Terrel L. Shields Elite Member

    58
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    You can extract a contributory value for the site, but obviously that "land" value includes the amenities of the development and is an undefinable co-interest in property. I would simply point out that it was not in the original scope of work and is unnecessary and you are NOT going to do it.
     
  9. leelansford

    leelansford Elite Member

    14
    Mar 29, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois

    As Brother Terrel notes, if the CA was not a requirement of the assignment, the request following the communication of the appraisal is nothing more than a new offer for a new service.
     
  10. JamesRockford

    JamesRockford Senior Member

    0
    Oct 22, 2010
    Professional Status:
    Certified General Appraiser
    State:
    California
    The Cost Approach is not applicable to Condos.

    If anyone disagrees, please explain in detail how you arrive at the land value.
     
    Last edited: Oct 7, 2011
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