"Recertification Of Value"

[Ross (CO)]

We knew that you knew it all along too.....but we did not know that you were trying to build a string of replies to share with this MB. Oh, well.

I take it the "pound sand" conclusion was your determination that you preferred not to serve the type of personality that this individual presented to you.....and that is fine too. Sometimes the very clients who approach us and make their propositions to us are their own worst enemy.....it's not we who are the sticks-in-the-mud ! They refuse to learn the Rules of Engagement and we'd be danged if we failed to employ them from our side of the table.

But, I must ask.......when you side-stepped the "Recertification of Value" term and spoke in the alternative parlance of providing a "new appraisal report" for him......how did he handle THAT suggestion ? I'll bet that he choked and sputtered as it was realized that a "new" fee for a "new" appraisal would be required.......and he probably already PROMISED the property owner that there would be "no fees" associated with his efforts to strike a new loan deal for the h/o. Ooooops, no way this MB is going to pay for a new report !

That will surely be one of the big traps into which the broker community falls in the wake of the sub-prime meltdown. Everybody has seen too many hybrid varieties of those Countrywide commercials by now and heard too much about the "No Cost, No Fees" lure that they have cast before the masses. You know.....the commercials where he says "and no appraisal fees" and then beams brightly with his corny smile !

The vast marketplace is becoming far too accustomed to racheting down the valuation side of the industry and expects.....instantaneous turn-time, costs of FREE to less than $100, and the zany notion that the client will dictate ALL terms of the appraising process that our "report", our license and our signature will then carry. The race to the bottom......surges onward. Thanks to the "comp checkers" (and whatever other hybridized name one calls that process) for being a catalyst to our industry's deterioration.

....let the clients and prospects use Zillow ! It's free and they get their valuation in about 5 seconds ! They can print it out and staple it to all the other loan documents. How simple can THAT get ! ?

 

[Neil Anderson]

Sorry if I was misleading. He wasn't opposed to a fee but he knew that a new appraisal would mean a much lower value since the local market has tanked in the area. He thought I would go out and find a couple more comps that supported the old value, rubber stamp a new date, call it a "recert," and charge him a few hundred bucks.

There is something wrong in a world where the most professional, honest, and ethical people are the lowest regarded and at the bottom of the pay scale. I would have gone into politics if I wanted to be in a racket.

 

[Ken Lemoine]

It is a new report. I think it helps to remind ourselves that the appraisal is a legal document which serves a specific purpose. We seem to get in trouble when we try and modify this document to please the brokers. In my experience, I have found that sticking to your guns and doing things right always comes back to you in repeat business. Sure you will lose some business along the way, but your name will be spread throughout the industry as a dependable appraiser and the amount of good business will eventually outweigh the amount you may have lost in the past.

Sorry... I seem to be standing on my soapbox again....

 

[Mister Ed]

A mortgage broker is requesting a "recertification of value" for an appraisal I did back in February because the comps are now dated. Never done one and don't like the form - USPAP compliant? What say yee?

I simply explain to the MB that ALL a "recertification of value" would be is me writing a new brief letter re-stating "On Feb x, 2007, it was my opinion of value fo the subject property was $XX,zzz."

What they appear to be asking for us an update to an old appraisal with new comps (reported on a 1004D). The fee for that would be $<insert your fee here>.

 

[Webbed Feet]

They are asking for new comps, so a 1004D won't work. My opinion is that a new date and new comps = a new appraisal.

Mr. Anderson,

Yikes!

Ok, the 1004D is, without any doubt in the world, a NEW APPRAISAL! It has a new effective date, and a value conclusion... which is "Not less than" a prior value that is known as a benchmark... The prior value is your prior opinion of value..

Now that is all covered, we need to know that the client asking for new comps or not is 300% beside the point. An "Update", which is a "New Assignment" reported on the 1004d form will almost always require new comparable regardless. Unless someone perhaps wants a "New Assigment" only a week after the first one. All of this is what leads to my opinion that the 1004D form, in it's current format and with nothing else added to it, is an abortion of a form that will lead most all users of it right into USPAP violations. Not only that, it's certifications for a "New Assignment" are not USPAP compliant. Read it's certifications and get out your USPAP manual and read the minimum required certifications for a real estate appraisal. We cannot say we are borrowing those we signed from a prior report. We have to sign new ones that are in compliance.

Then we have all the pitfalls of turning that puppy into a exterior only viewing complete without one single EA regarding the interior.. Just search threads regarding the 2055 use on that angle of sticking your neck out.

So, now that a bunch of people said to use the 1004d, but left all of the above out of their posts...... Perhaps when people start telling other people the 1004d should be used, they could bother to alert the people they are advising about more than just a couple shortcomings of that lousy form. Really, IMHO, the best thing to do is just inspect the subject again and provide a fresh URAR with the new effective date. The 1004d is not worth the hassles to get it patched up and the URAR gives you a reporting format we are all familiar with to make sure you have all your needed USPAP elements in there for a new assignment.

 

[Webbed Feet]

Sorry if I was misleading. He wasn't opposed to a fee but he knew that a new appraisal would mean a much lower value since the local market has tanked in the area. He thought I would go out and find a couple more comps that supported the old value, rubber stamp a new date, call it a "recert," and charge him a few hundred bucks.

There is something wrong in a world where the most professional, honest, and ethical people are the lowest regarded and at the bottom of the pay scale. I would have gone into politics if I wanted to be in a racket.

Mr. Anderson,

Sorry, I did not catch up on the entire thread. But "Use the 1004d" responses with no other discussion of that form almost always drives me right into an instantaneous tither!

You had one very confused mortgage broker there if he thought a new effective date was NOT a new assignment. Or even if he thought using the same effective date was NOT a new Retrospective assignment based on those expectations.

 

[Kevin Mc]

Agreed.

Unless someone perhaps wants a "New Assigment" only a week after the first one. All of this is what leads to my opinion that the 1004D form, in it's current format and with nothing else added to it, is an abortion of a form that will lead most all users of it right into USPAP violations.

the form is good for new construction completions and "updates" maybe a couple of weeks after the intial inspection, thats it.

 

[Camp1]

This is verbatim a portion of a new construction appraisal request from a major national bank, after they tell you the report must be USPAP compliant...

"For proposed construction, the appraisal may be "as completed" with the estimate of value based on the appraiser's review of the subject's plans and specification, subject to a final inspection. When the construction is completed, the appraiser must provide certification that the property was completed in accordance with the plans and specification considered in the original appraisal report. In addition, the appraiser must provide a re-certification of value that states that the subject's value is at least equal to the value estimate outlined in the original appraisal report. This re-certification of value must be based on the appraiser's exterior view of the subject property and knowledge or current market conditions.


What to do??

 

[Tim Hicks (Texas)]

The recertification of value is simply stating the conditions of the appraisal have been met. They want the 1004D update, too. Don't try to argue nomenclature with them. Just give them two separate reports and bill them accordingly. You can give them a new appraisal if it warrants, too.

 

[Camp1]

The recertification of value is simply stating the conditions of the appraisal have been met. They want the 1004D update, too. Don't try to argue nomenclature with them. Just give them two separate reports and bill them accordingly. You can give them a new appraisal if it warrants, too.

Someone correct me if I am wrong on this, but it seems to me that it would be impossible to issue a 1004d form saying there has not been a decrease in the value of the subject property on a house that will be completed 9-12 months from now and be USPAP compliant.

The question on the form reads: " Has the market value of the subject property declined since the effective date of the original appraisal? Yes or No"

Even though it is a simple question, it is asking for an opinion of value based on market conditions 9-12 months AFTER the original effective date. So essentially I would need to complete a new appraisal in order to properly answer the question.

Am I just being "too difficult" about this?