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  #1  
Old 03-07-2006, 03:08 PM
Debra's Avatar
Debra Debra is offline
 
Join Date: Jan 2002
Location: Tennessee
State: Tennessee
Professional Status: Certified Residential Appraiser
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Default Appraisal order for somebody that I know...

Hello,

I just received an order for a purchase. The borrower is my Aunt's husband's son and his wife. Do I need to state that I know the borrower in the report? If so, where and what is a professional statement for this situation? The lo does know that we know each other. The borrower requested me.

Thanks,

Debra
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Old 03-07-2006, 04:36 PM
Jerry Bone Jr's Avatar
Jerry Bone Jr Jerry Bone Jr is online now
 
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Location: Salem, Oregon
State: Oregon
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Don't open that can of worms.
  #3  
Old 03-07-2006, 04:57 PM
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Joker Joker is offline
 
Join Date: May 2002
Location: Hicksville, Appalachia
State: Ohio
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You can disclose the relationship, if you believe it to be relevant. However, you must certify that you are a D3P. The fact that you are asking the question here apparently raises questions in your mind.

In a rural area such as the one I live in, it is darn near impossible to NOT know or be related to the borrower (No comments from the peanut gallery, please). But I still need to determine if I am a D3P. If you cannot be a D3P in your cousin's (or step cousin's) appraisal, obviously you shouldn't do it. There are times it's better to walk away.
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  #4  
Old 03-07-2006, 05:01 PM
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Liz Mura Liz Mura is offline
 
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Location: Mesa, AZ
State: Arizona
Professional Status: Certified Residential Appraiser
Posts: 852
Default Walk away

Way better to say you can't do the appraisal as you are NOT a disinterested 3rd party than to have your estimate of value get thrown back in your face by "family". They either won't be happy with your estimate, or they won't be happy with your fee. Standing rule for me...never appraisal for family or friends.
  #5  
Old 03-07-2006, 05:46 PM
Mike Boyd Mike Boyd is offline
 
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Location: Santa Rosa, CA
State: California
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Default someone you know

I see nothing wrong with doing the appraisal. I get referrals all the time. Just be honest.
  #6  
Old 03-07-2006, 06:02 PM
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Charles Witt Charles Witt is offline
 
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Location: Delaware
State: Delaware
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You were probably requested since they respect you and know you will not pull any fluff! However, it is not permissible for a bank to allow a borrower to name the appraiser according to the OCC. The bank must order it independently.
If you feel you may have a conflict decline the assignment.
Possibly you miught want to disclose you are related.
Also that you are a disinterested third party!
  #7  
Old 03-08-2006, 09:18 AM
Brad Ellis Brad Ellis is offline
 
Join Date: Feb 2006
State: California
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Debra,

Taking this assignment is about as smart as going into business with a friend or family member. The business might work out but you will spend the rest of your life arguing over something and the friend is likely not to be one in the near future.

Technically you can do this if you disclose your relationship but it is still not a good idea.

Get someone else to do it and you can even pay the fee- it will probably cost you less in terms of time and gried over the long run.

Brad
  #8  
Old 03-08-2006, 09:39 AM
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Marcia Langley Marcia Langley is offline
 
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Location: Springfield, MO
State: Missouri
Professional Status: Certified Residential Appraiser
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Debra,

You would definately have to disclose your relationship in the report.

Most lenders will not accept an appraisal if a disclosure is made regarding the appraiser's relationship to a party to the transaction.

Sometimes lenders will tell you that they are OK with the situation but they don't realize you have to disclose, or they don't realize that if you do disclose how it might affect their lending process.

My advice to you is not to do it. However, if you decide to do it despite all this good advice, I reccommend you check once more with the lender (not just the LO) and make sure they understand that you have to disclose in the report.
  #9  
Old 03-08-2006, 11:18 AM
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Dave Smith Dave Smith is offline
 
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Location: Sister Bay, Door County, Wisconsin
State: Wisconsin
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Debra:

I deal with your kind of situation on a daily basis because I live in a small town market where I know most every one. I have appraised the majority of the houses on my half mile long street, some of them several times, no problems.

If I said no to all the assignments involving borrowers I am on a first name basis with I would cut my work load in half. Not going to happen... particularly in a small town.

I simply discuss the situation with my client whenever I think the client should know it is my neighbor, my friend or a business associate that is the borrower. I let the client decide if they feel there is a conflict of interest, which the client seldom does. I have even appraised the LO's house for their loan... several times... no problem. Most good clients would rather have the local appraiser do the work than to bring someone in from outside the area that is not as knowledgeable as the local guy. Besides, I am the only appraiser in town.

Simply be ethical in what you do. Discuss, disclose and make some money... unless you are uncomfortable with the situation. You and the client should make the decision.
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