More On Free Comp Checks

[Hamlet]

Appraizur is counting on "witness protection" to keep him out of trouble. Does his friends call him "Godfather", or more like the Teflon Don I wonder?

 

[Michigan CG]

............a numerical value is also expressed by talking...........

...........verbally it can't be proven in a court of law....

Contradiction in opinions?

............a value suggestion.........

Value suggestion...comp check....we now have a new word for it. Thanks, scummy AMCs and MBs will have a new term to use.

Originally Posted by George Hatch
It's people who constantly and chronically try to push the limits of what they can "get away with" who are to blame for some of our current events, including the downsides of the HVCC.

And, of course, George has is the voice of reason again.

 

[George Hatch]

Ohh and btw - if I express a numerical value in conversation - the research is done and that value is there. So, having to go to court to defend a verbal appraisal has never happened. However if it did and the only proof was a phone conversation a year ago, what would you plead? Never happened, or I don't recall or would you say YES!! I did !! and pay a huge fine and lose your license. But hey, it's worth it to prove your point - right? Keep your cred even if you're not an appraiser anymore, it was worth it to be totally honest and upright and admit to it, even if they have a trumped up fabrication they're throwing at you. Yep. Cause you're smart and you know the difference between an appraisal and a value suggestion when spoken by an appraisal professional. Way to go dude !!

I'm seeing this and I'm now wishing I hadn't clicked into this thread.

A lot of people seem to think that what we sell is value opinions; but in my view that's really not true. There's nothing special or marketable about having a value opinion. Everyone and their dog has a value opinion. What makes our value opinions marketable - let alone relevant - are our assertions of complete impartiality. We assert that we will ignore what everyone else wants in the way of a value conclusion, including our own clients.

When an appraiser conspires with a client to cheat the other intended users of that impartiality, by doing things they certify in the appraisal that they don't do, that detracts from their own integrity as well as to the public's perception of the integrity of the entire appraisal profession. That's because even if there isn't a 3rd party to bear witness and "prove" an allegation to a state board, the client themself knows of the appraiser's compromise. There is no such thing as a secret in our society.

Moreover, word of that appraiser's "cooperation" gets around, no matter what the client promises to their co-conspirator. These clients tell their borrowers, they tell their peers, and if jammed on a bad appraisal by a lender they'll roll over on the appraiser in a heartbeat. There are other progressions, too. Once that client knows they have a weak appraiser on the hook they become emboldened to ask for more compromises, including more serious compromises, based on the appraiser's demonstrated lack of personal integrity. The next step for that client is to project those same expectations to every other appraiser they deal with.

This sequence and its results are not a matter of idle conjecture. All of us have had the experience of clients asking us to do something we're not supposed to do and then professing surprise based on their past experiences that "every other appraiser does it". Even though that's usually a gross exaggeration the fact remains that there is a kernel of truth in there somewhere, thanks to some donkey who decided their point of no return is defined by their chances of getting caught.

So in answer to what the professional appraiser would do in the above situation, the answer is that they wouldn't be so foolish as to allow themselves to get into that situation in the first place. They'd use the "no" word right up front and let the donkey client go find their team player appraiser somewhere else.

I mean, it's not as if that donkey client is actually going to be grateful to their team player or show any loyalty. Usually what happens is they come to expect those "favors" as representing the minimum basis of their relationship. Its inevitable that the longer that relationship goes, the greater that client's sense of entitlement becomes and the less room they leave that appraiser to say "no". Such a relationship is doomed to die within a matter of months, if even that long. So there is no long term payoff for laying on your back for a client, particularly for a loan originator client.

This might sound like a lot or moralizing, but it's not. It's really about being practical. If what we really sell are our reputations for playing it straight down the middle then doing anything to undermine that perception among our clients only plays to the strengths of the AVMs and the BPOs and the lowest common denominators in the appraisal business. Taken to its logical conclusion, undermining our own integrity detracts from the economic lifespan of our profession. The "public trust" is the only thing that keeps the appraisal profession alive.

It's not altruistic to diligently try always to do the right thing; it's ultimately a matter of survival over the long term.

 

[fifteen]

George, with all due respect, a numerical value has to be expressed in at least part of the equation or there is no valuation.

PE Kiss my .... for this comment. You like to make things up as you go along. I never did speak a numerical value - I said it's doable and that person is allowed to interpret that any way they want.

Well you are slowly making progress ... now you admit you spoke a value .. but there must be a witness ... man you are a real piece of work. Id love to tell you what I really think at this moment, but I dont want to get thrown off the forum. However I will say that your argments and changes and parsing in this thread are simply pathetic.

Bear witness to that.

Hamlet - Please show me where I said it was a law that an appraisal has to be written. Thanks

AS far as the OP and this thread, yes you can do comp checks as much as you can tolerate. I wouldn't however allow a conversation to be recorded or give the client anything written or printed that suggests a value or value range. Nevermind these self-righteous windbags. They're not worth losing full fee clients over.

 

[PropertyEconomics]

Apprazur ... I kindly ask you to read Mr. Hatch's comments very carefully. He is not only a very good and ethical appraiser, he is also a Certified USPAP Instructor ... Id take his words very much to heart.

He has no ax to grind in this thread, other than to advise you the best he possibly can, because that is the type of man George Hatch is.

If you read no other words ... read his and contemplate very hard what they mean and what he is telling you.

I know this much .. he wouldnt lead you wrong.

 

[George Hatch]

Your interpretation is in conflict with the definition of an appraisal in the Definitions section of USPAP. Straight up. No amount of semantics will get you past that.

A comment such as "It's doable" is in obvious reference to a previously expressed numerical benchmark, whether you set that benchmark or not. That definition is in the book - black and white.

I'd also recommend you refrain from attempting to cloak your actions by use of non-appraisal terms such as "value suggestion". The USPAP definitions work based off the activity being performed, not the nomenclature you choose to use. Besides, it's not like there's any question among the regulars what your use of the term entails. You haven't stumbled onto some "new" form of appraisal practice; it's the same old thing and you're doing it for the same old reason.

Honestly, I think you'd be a lot better off selling Restricted Use DAs to your loan originator clients and phasing your assignments, even if you priced the DAs as a loss leader. I think it would even be better to give them the written report than to persist in providing the sloppy substandard and undocumented appraisal work you've been doing so far. Obviously I'd rather see you sell that work than give it away due to the complications it creates with the assignment contingencies you certify that you don't engage in every time you sign a Fannie report. However, as long as we're talking about compromising your ethics, why can't you choose a lesser compromise?

The reason I think the Restricted Use DA would work better for you is because it actually entails less work than providing verbals that you are then required to summarize for your workfile. That workfile requirement being another compromise your "value suggestions" are making. Besides, the written report would include all the assumptions and limitations that go with your valuation - more so than you would be able to convey in any verbal and much more than what any client would remember from such a verbal even if you could provide it. A written report prevents anyone from later rewriting what was and wasn't said or implied.

Lookit, nobody can force an appraiser to do what they're supposed to do. The most effective mode of appraisal standards enforcement comes as the result of the individual choosing to comply and therefore choosing to be part of the mainstream of professional practice. An individual can't constantly flout the Ethics Rule and still consider themself to be part of that mainstream - it doesn't work that way. They have to pick which "benefit" is more important to them and then they have to live with the downsides of that decision. It's decision each of us has to make every single day - a question we are challenged to constantly ask ourselves:

Regardless of what I've done up until now, what kind of appraiser will I be today?

 

[Samshile]

I disagree with Ken B and think he might be misusing the AI's little circle within a circle within a circle diagram explaining Appraisal service, appraisal practice and appraisal.

My point is that compliance with USPAP is required when either the service or the appraiser is obligated by law or requlation or by agreement to comply.

The purpose of the appraisal regulations in CA's BPC is compliance with FIRREA and pertains to federally related appraisal activity.

My personal opinion of comp checks is that it is poor appraisal practice and digusting. It dilutes the credibility of all appraisers and undermines the public trust in appraisal practice and this is antithetical to the purpose of USPAP as stated in the preamble.

im trying to find the part where it undermines the public trust.
Back in 1991 when I first started working for an appraiser who was the son of an appairser, who, taught many of the ealier classes and worked to get appraiser's licensed.
They all did comp checks. The subject is worth roughly 200-220k. Then they would do the report with a value of somewhere in that range. on ocassion they would find the property was worth less and estimate market value at 190k (example). All work was diligently researched and well supported by the market. The value of the subject did not change because a comp check was performed a week before. No one over- valued so they could get paid.

 

[Samshile]

George, with all due respect, a numerical value has to be expressed in at least part of the equation or there is no valuation.

PE Kiss my .... for this comment. You like to make things up as you go along. I never did speak a numerical value - I said it's doable and that person is allowed to interpret that any way they want.


Hamlet - Please show me where I said it was a law that an appraisal has to be written. Thanks

AS far as the OP and this thread, yes you can do comp checks as much as you can tolerate. I wouldn't however allow a conversation to be recorded or give the client anything written or printed that suggests a value or value range. Nevermind these self-righteous windbags. They're not worth losing full fee clients over.

Aprazur I never saw where you said you were over-valuing properties to get paid or hitting a doable number to get paid. I never saw where you were not reporting well supported market values. What say you?

 

[Samshile]

Do you realize who your client is? Its not the HOMEOWNER .. read other threads and you will realize that no appraisal is "useless" it may well keep a lender from making a mistake. I dont care who pays for it .. if you have issue with that then make your clients pay for it ... but the HOMEOWNER IS NOT YOUR CLIENT.

Comp checks are not against USPAP ... they are appraisals and Standards 1 and 2 apply .. you must have a fully documented file and a signed certification.

Its not my fault you guys dont wish to appraise per USPAP but would rather parse words and show you are right and all the USPAP instructors and others here are wrong. If you would just realize they are appraisals you would be on the right track.

Yes technically the LO is our client. I have over 17 years in the busines and have done thousands of reports that are now in closed loans files. Yes we are responsible to the lender.
However, I respectfully disagree. The borrower pays for the report not the lender. RE-fi expample:
I get paid at the door COD.
If an LTV requires the subject to be worth 300k and the report comes in at 250k. It is useless, there is not going to be any loan generated. $725 paid by the borrower for something that cannot be used, will **** off the borrower in return The LO will ask "didnt u check the value before u set up an appointment and did an inspection? Oh no Loyal client of the last 11 years. I was told on the appraisal forum and by Att GEn. CUMO I had to do the report completely oblivious to the value of the property. It had to remain a secret unitl I finished the report or I was vilotating USPAP. If I said anything they would construe my fee was based on a predetermined value.

 

[Kevin Mc]

Tragically funny. No wonder this profession is in the dumps.

There is nothing funny about it at all and it is no wonder to me or many others why this profession is in the dumps. There have been other appraisers on this forum who stood by the "doable" defense as well. Shake it,bake it anyway you want to, it doesn't wash. You can argue it until you are blue in the face but I'm not buying it. Many others aren't buying it. I doubt a state board would buy it as well but if that situation ever presents itself to you, good luck with it.