Abester - I'd read up on Special Use properties and H&BU carefully (wrestling with that myself at the moment).
Rob:
With some sympathy for your position... and full acknowledgement that there is likely no way to win this war... I'd write a stiffly worded demand letter... and to do that competently lets go straight to the source:
XI, 406.02: Selection of Comparable Sales (06/30/02)
If a property is located in an area in which there is a shortage of truly comparable sales-either because of the nature of the property improvements or the relatively low number of sales transactions in the neighborhood-the appraiser might need to use as comparable sales properties that are not truly comparable to the subject property or properties that are located in competing neighborhoods. In some situations, sales of properties that are not truly comparable or sales of properties that are located in competing neighborhoods may simply be the best comparables available and the most appropriate for the appraiser’s analysis. The use of such comparables is acceptable as long as the appraiser adequately documents his or her analysis and explains why these comparable sales were used (including a discussion of how a competing neighborhood is comparable to the subject neighborhood).
The appraiser must report a minimum of three comparable sales as part of the sales comparison approach to value. The appraiser may submit more than three comparable sales to support his or her opinion of market value, as long as at least three are actual settled or closed sales. Generally, the appraiser should use comparable sales that have been settled or closed within the last 12 months. However, the appraiser may use older comparable sales if he or she believes that it is appropriate, and selects comparable sales that are the best indicators of value for the subject property. The appraiser must comment on the reasons for using any comparable sales that are more than six months old. For example, if the subject property is located in a rural area that has minimal sales activity, the appraiser may not be able to locate three truly comparable sales that sold in the last 12 months. In this case, the appraiser may use older comparable sales as long as he or she explains why they are being used.
The appraiser may use the subject property as a fourth comparable sale or as supporting data if the property previously was sold (and closed or settled). If the appraiser believes that it is appropriate, he or she also may use contract offerings and current listings as supporting data. However, in no instance may the appraiser create comparable sales by combining vacant land sales with the contract purchase price of a home (although this type of information may be included as additional supporting documentation).
SO- I am not saying that you didn't do the best you could with what little you had to work with... but it looking at the use of the words
might, must and
may it kind of looks like you 'coulda-shoulda' thrown in some bogus third sale no matter how incomparable.... and relied on the prior sale of the subject heavily - I am in full agreement that if the subject is the BEST sale - you MUST use it and weight it heaviest! Some appraisers do some don't.
Were there any land/build jobs in that exclusive area - or is it fully built up?
IF the cleint did not ask that you remedy this concern, and merely shot your fee... I would submit to the cleint that the actual guidelines are unclear.
They do not concretely preclude the use of the of the subject prior sale as one of the three, one can read the guidlelines in more than one way - seriously LOOK at them. The use of 'may' in the 'fourth comparable paragraph' does not absolutely preclude use as one of the THREE sales. If they meant CAN NOT they shoulda written CAN NOT. My objection is not weasel-wording the possible intent of the Guidelines, if they can't write em in black n white, then they better be prepared to deal with grey-line responses.
I have been in professional appraisal classes where this topic has been hotly debated... the USE of a useless non-comparable sale can be considered misleading and you all know what USPAP has to say about THAT kind of behavior.
...According to the Code of the Order of the Brethren... but you are dealing with a Pirate Captain: he is telling you:
First, your return (of this appraisal)... was not part of our negotiations nor our agreement so I must do nothing. And secondly, you must be a pirate for the pirate's code to apply and you're not. And thirdly, the code is more what you'd call "guidelines" than actual rules. Welcome aboard ...
I'd probably go after them on the basis of theft of services... and hound the cleint for direct contact to that so-called chief appraiser... my guess is the issue never actually made it to that level.
Again a demand letter for payment and agreement to discuss the matter with QUALIFIED individual shoudl be you next step if you want any money for yoru time.
Be aware that they can file some bogus complaiint with the state board.... keep your response and communications professional and IN THE FILE.
