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  #1  
Old 08-01-2005, 05:11 PM
CANative's Avatar
CANative CANative is offline
 
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I did an appraisal for a new client last week. The order form did not mention that this is a purchase transaction.

They want me to change rural to suburban (I don't care, it's a close call either way.)

But during the conversation I was told that this is a purchase. It's a private sale and was not listed in MLS, no one at the property mentioned a sale. So anyway, I say fine, send me the purchase contract and I'll revise the report and change rural to suburban.

They call me back a few minutes later and state that is illegal to send me the purchase contract. Then they say it's against company policy to send the purchase contract and they've closed hundereds of loans. They say their appraisers just state that the purchae contract was not reviewed. After some silence, she says she'll talk to the broker if this is a sticking point with me. I state that it is.

I know we can just state that we could not obtain a copy of the contract if it's not available in the normal course of business, but this particular situation does not sit well with me.

Should I be stubborn about this?
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Old 08-01-2005, 05:23 PM
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George Hatch George Hatch is offline
 
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Ask them to put their refusal into writing and state why they cannot or will not do that (including their 'legal' reference), and then tell them that the letter will be included in your report as the explanation of why you were unable to review the sales contract in accordance with SR1-6.

You have a legitimate reason for asking, let's see of they have a legitimate reason for refusing.

I'ts possible that the terms of the sale are other than has been communicated to you.
  #3  
Old 08-01-2005, 05:24 PM
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Greg,

I have done many like that. Buyer does not want the appraiser to see the contract. Just disclose it.

That said, those often turn out later to be a problem. Seller did not have it listed with an agent, cause no agent would take it at the pie in the sky amount the seller wanted.

Buyer, almost always from out of town, wanders through, makes offer. Appraisal is at a realistic value, everybody is pi$$ed.

Is this a tough one or pretty cut and dry?

If you hold your ground, this is one you want all of your i's dotted, two or three times, and your t's should look like tic tac toe boards.
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Old 08-01-2005, 05:25 PM
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"The lender would not provide the sales contract to the appraiser for analysis."

You can only do what you can do. I have to put that statement in appraisals all the time. Why? Because they are going to get my opinion of value regardless of any sales price, concessions, contributions or other hidden item.

It is possible that the lender wants to know what the property is worth without any outside influence on the appraiser.
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  #5  
Old 08-01-2005, 05:32 PM
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It is an older farmhouse with a dated floorplan, an old barn and an old garage on 16 acres just outside of town. It may have been a hard one to appraise for another appraiser or for me except that I have recently appraised 3 other properties in this area recently on similar acreage as well as a couple of land appraisals. It appraised a little higher than the "estimated" value which in retrospect appears to be the sales price.

I can probably just make the statement like daff and bill have suggested but I like George's idea better. I suddenly don't like this client.
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Old 08-01-2005, 05:34 PM
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Addition: With all that said above, I have been known to be sneaky about getting a copy of the contract. I will call both agents, the borrower, the loan officer and/or the processor and attempt to obtain the contract.

Remember, we are under "the normal course of business" in completing our job.
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  #7  
Old 08-01-2005, 05:34 PM
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And now that I know it's a purchase I'm kind of uneasy with my less then usually over-meticulous inspection for purchases.
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  #8  
Old 08-01-2005, 05:46 PM
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Greg, since they aren't overly "generous" with their cooperation, then I might remind them about how fast I can get those changes made.....Comparable turn time for comparable turn time. I.E., PA for changed report.

I do agree with Tim about getting sneaky about getting a copy under the "normal course of business" aspect. I definitely like George's suggestion. Then, if it happens, once you've got the letter of denial, I'd call back and ask to verify the name of the person who signed the letter. "WHY"? Well, I want to make sure I have all the facts correct for my files should I have to go before the state board.
  #9  
Old 08-01-2005, 05:47 PM
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Advisory opinion 1 (AO-1). page 126 of 2005 USPAP

In cases where the property being appraised is known to be the subject of a pending transaction, but the appraiser is not privy to the terms of the pending transaction and the parties to the transaction have declined to disclose the terms of the transaction to the appraiser, the sales history to be included in the appraisal report might include a comment such as the one shown below:

The property being appraised is known to be the subject of a pending purchase and sale agreement, but the appraiser was unable to obtain the terms of the agreement. The current owner confirmed that the property is under agreement but declined to disclose the terms of the agreement or to discuss the nature of the agreement.
  #10  
Old 08-01-2005, 05:49 PM
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Ines, you're such a stickler for details. :rofl: :rofl: :rofl:

:hug: For a newbie, you're alright.
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