Real Estate Appraisal Forum

appraisersforum.com logo
The Premiere Online Community for Real Estate Appraisers!
 Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
 
 
Go Back   Appraisers Forum > Real Estate Appraisal Forums > Fannie Mae, Freddie Mac, USPAP
Register Help Our Rules Calendar Archives Mark Forums Read


Closed Thread
 
Thread Tools
  #1  
Old 08-10-2007, 09:08 PM
Ty Lam Ty Lam is offline
 
Join Date: Feb 2003
State: Texas
Professional Status: Certified Residential Appraiser
Posts: 16
Default Uspap Standard 1-5

I got an assignment to appraise a property for contract negotiation. The seller/client bought the property less than 3 years ago. He does not want the sale history to be reported. Will I be violating Standard 2-2 if I don't report the sale history of the subject? Also, I'm not sure how to label the report as Self-Contained, Summary or Restricted Use, as the buyer will also be using the report as part of the negotiation. Any input would be appreciated.
Sponsored Links

  #2  
Old 08-10-2007, 09:20 PM
Fred Fred is offline
 
Join Date: Jan 2002
State: Virgin Islands
Professional Status: Retired Appraiser
Posts: 11,390
Default

IMO, you have to report the prior price. It seems you already know it. so, it was clearly available in the "normal course of business." I can understand that the seller might not want the buyer (an intended user) to see it, because it may appear he is making a large profit, but you cannot favor one party or the other.

As to what to call it, restricted is out because there are two intended users. No one really knows what self-contained means. That leaves you with the usual "safe" choice, summary.
  #3  
Old 08-10-2007, 09:28 PM
Tom Woolford Tom Woolford is offline
 
Join Date: Nov 2005
Location: Nature Coast
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 5,297
Default

Though you apparently were retained by the seller, apparently the buyer is an intended user. To favor one party over the other would, IMHO be a clear violation.
  #4  
Old 08-10-2007, 11:50 PM
leelansford leelansford is offline
 
Join Date: Mar 2002
State: Illinois
Professional Status: Certified Residential Appraiser
Posts: 13,487
Default

Quote:
Originally Posted by Ty Lam View Post
I got an assignment to appraise a property for contract negotiation. The seller/client bought the property less than 3 years ago. He does not want the sale history to be reported. Will I be violating Standard 2-2 if I don't report the sale history of the subject? Also, I'm not sure how to label the report as Self-Contained, Summary or Restricted Use, as the buyer will also be using the report as part of the negotiation. Any input would be appreciated.

First: When you state that the "buyer will also be using the report", does that mean that you have agreed (after, I assume, discussion with your client) to specifically identify the prospective buyer as an Intended User?
If you identify the prospective buyer as an Intended User, you can not communicate a Restricted Use Appraisal Report (see current USPAP, Std. Rule 2-2, lines 687-690).
And do keep in mind, that ANYONE can "use" your appraisal report, but only you can specifically identify an Intended User (but this important detail--who is an Intended User--might be lost on a disgruntled prospective buyer who believes that he is a "user" of your appraisal; be careful!).

Second: See Standards Rule 2-2 (a) and (b) in part (side-note: also see "c"):
"When reporting an opinion of market value, a summary of the results of analyzing the subject sales...in accordance with Standards Rule 1-5 is required."
Now, this same section goes on to state: "If such information is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required."
IF you were communicating a Restricted Use report, I believe that the latter statement could apply: the owner already is aware of the prior transfer and the appraisal report is intended solely for your client. Given the circumstances that you are working with, I don't think I would want to take the position that the prior transfer lacks relevance.

Good luck.
__________________
Lee Lansford, IFA
"My opinions & my opinions only!"

Last edited by leelansford : 08-10-2007 at 11:55 PM. Reason: added more comments
  #5  
Old 08-11-2007, 12:35 AM
CANative's Avatar
CANative CANative is offline
 
Join Date: Jun 2003
Location: Hopland, CA
State: California
Professional Status: Certified Residential Appraiser
Posts: 44,800
Default

Your client is hiring you to provide an appraisal report he can wave in front of his buyer. I don't think that makes the buyer an intended user (unless you say so) Exclude the buyer as an intended user and tell your client that you have to report the sales history. Your client can always use a big fat Sharpie to cover up any information he doesn't what anyone else to see.
__________________
"OMG! What's wrong with you?"
  #6  
Old 08-11-2007, 09:20 AM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is offline
 
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
Posts: 38,830
Default

Quote:
Your client can always use a big fat Sharpie to cover up any information he doesn't what anyone else to see.
...or simply open up the report and doctor it up the way he likes it..
__________________
"What does not kill you, makes you stronger, except bears. Bears will eat you"
  #7  
Old 08-11-2007, 09:59 AM
Fred Fred is offline
 
Join Date: Jan 2002
State: Virgin Islands
Professional Status: Retired Appraiser
Posts: 11,390
Default

Quote:
but only you can specifically identify an Intended User

Your client is hiring you to provide an appraisal report he can wave in front of his buyer. I don't think that makes the buyer an intended user (unless you say so)
Sorry, but both of these arguments are wrong. Accepting an assignment means accepting the legitimate assignment conditions that come along with it. The client states what they intend to do. Your options are to agree to that or not.

It is hard to imagine either of you arguing that if a bank tells the appraiser that they need a FNMA appraisal, and that it would be OK for the appraiser to unilaterally usurp the client’s intended use and violate the guidelines. Or a bank asking for an appraisal for an FRT, and the appraiser agreeing to do the appraisal, but trying to limit the use to exclude FRT's.
  #8  
Old 08-11-2007, 11:03 AM
xm72mhd xm72mhd is offline
 
Join Date: Aug 2005
State: Florida
Professional Status: General Public
Posts: 5,224
Default

Quote:
Originally Posted by Steven Santora View Post
Sorry, but both of these arguments are wrong. Accepting an assignment means accepting the legitimate assignment conditions that come along with it. The client states what they intend to do. Your options are to agree to that or not.

It is hard to imagine either of you arguing that if a bank tells the appraiser that they need a FNMA appraisal, and that it would be OK for the appraiser to unilaterally usurp the client’s intended use and violate the guidelines. Or a bank asking for an appraisal for an FRT, and the appraiser agreeing to do the appraisal, but trying to limit the use to exclude FRT's.
Would you say the definition and even the concept of intended user as we once knew it has been usurped into an unrecognizable oblivion? I doubt it is even any help in staving off liability. Intended use may have some life left in it, but it is dying too?
  #9  
Old 08-11-2007, 11:41 AM
CANative's Avatar
CANative CANative is offline
 
Join Date: Jun 2003
Location: Hopland, CA
State: California
Professional Status: Certified Residential Appraiser
Posts: 44,800
Default

Steve,

I'll have to defer to your superior experience with the USPAP. Since the other party is an intended user, would the appraiser owe a responsibility to that additional intended user to provide an unalduterated copy of the appraisal report should the client delete information?
__________________
"OMG! What's wrong with you?"
  #10  
Old 08-11-2007, 11:49 AM
xm72mhd xm72mhd is offline
 
Join Date: Aug 2005
State: Florida
Professional Status: General Public
Posts: 5,224
Default

Quote:
Originally Posted by Greg Boyd View Post
Steve,

I'll have to defer to your superior experience with the USPAP. Since the other party is an intended user, would the appraiser owe a responsibility to that additional intended user to provide an unalduterated copy of the appraisal report should the client delete information?
I know you adressed your question to Steve, but I have an observation. That is just one of the concerns about the expanding universe appraisers are finding themselves in. They are in a tight right now since we can't be sure any longer that the clients aren't modifying our stuff.
Sponsored Links

Closed Thread


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump




Copyright © 2000-, AppraisersForum.com, All Rights Reserved
     Terms of Use  Privacy Policy
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com

Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
Partner Sites:
AppraiserUSA.com - National Appraiser Directory AllDomainsUSA.com - Domain Name Registration
DeadbeatListings.com - Deadbeat ListingsAppraiserSites.com - Web Hosting for the Professional Real Estate Appraiser
Find FHA Appraisers - FHA Appraiser Search Commercial Appraisers - Commercial Appraiser Search
Relocation Appraisal - Find Relocation Appraisers Domain Reseller - Business Opportunity
Home Security Buzz - Home Security Info Radon Testing - Radon Gas Info
My Medicare Forum - Medicare Info Stop Smoking Help - Help Quitting Smoking
CordlessPhoneStore.com - Great Cordless Phones AndroidTabletCity.com - Android Tablet Computers

Follow AppraisersForum.com:          Find us on Facebook            Follow us on Twitter


All times are GMT -5. The time now is 02:05 AM.

SiteMap: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93