Request to Remove Addition from Appraisal

[AnonApprsr]

How about an extraordinary assumption that the addition has met all requirements. Reserve the right to reconsider if found to not have met all requirements.

Check Box 4?

 

[Mike Kennedy]

SR 1-2 (e) (f) (g)
http://www.USPAP.org/USPAP/stds/sr1_2.htm

Bullets 1, 2, 5, 6, and 10
http://www.USPAP.org/USPAP/frwrd/ETHICS_RULE.htm#conduct

 

[AngelEyes359]

In my market a deck, patio, finished basement and/or an in-law unit is almost NEVER known
to exist according to the town/municipality.
Our liability would be huge, if the town came after the homeowner, because of our inspection/declaration that we SAW IT.....

Fritz,

I have never been asked to verify permits for a deck or patio. I think that would be silly but I do think some issues are absolutely legitimate to look into. It's a legitimate question to ask if an in-law is legal. It's a legitimate question to ask whether an addiitonal unit in the basement is a legal 2nd unit.

Do you appraise many 2-4 family dwellings? A property with three units may only be a legal 2 family. A property with two units may only be a legal single family. How the heck do you sort out what the legal use of a property is in some situations if you are afraid to talk to the Building Inspector's Office or relevant Muncipal Authority?

If a home owner gets mad at me because I pulled the building jacket for his property and confirmed it was a legal two family with the building inspector instead of the three family he claimed it was, I'm not going to lose any sleep over it. If he has an unpermitted unit, it's either a problem he caused, bought or inherited. It's not my problem. It's theirs. The lender asked me to appraise the property. Sometimes before I can do that I need to determine what it legally is and the sometimes the only way I can do that is by talking to the building inspector's office.

My concern would be if I reported something incorrect and botched the legal use the like the last appraiser who appraised a legal two family as a three family. Who has more liability? The one that accurately reported what was there, the one who got it wrong or the one who knew a unit was not legal but looked the other way?

 

[Lee Lansford]

...

If a home owner gets mad at me because I pulled the building jacket for his property and confirmed it was a legal two family with the building inspector instead of the three family he claimed it was, I'm not going to lose any sleep over it. If he has an unpermitted unit, it's either a problem he caused, bought or inherited. It's not my problem. It's theirs. The lender asked me to appraise the property. Sometimes before I can do that I need to determine what it legally is and the sometimes the only way I can do that is by talking to the building inspector's office.

...

Just a thought:

What happens next following the building inspector's visit to your subject property following your discussion with the inspector?

I'm not suggesting that an appraiser should not verify what is legally permitted, but be certain that the parties with interest are aware of what you need to do.

 

[AnonApprsr]

I'm not a lawyer, I am not a building inspector, I am not the police, I am not a member of the zba, I am not part of the local planning department, and I'm not even a home inspector. I'm an appraiser.

 

[DMZwerg]

It is just a phone call to verify permits?

Not everywhere.

In Milwaukee if it is not online then one would have to drive downtown and look through decades of microfiche. Calling is of less than little use due to the old cold war between Building/Inspection and Zoning as they were located in different buildings for some time.

That is but one example.

Just saying.

 

[DMZwerg]

‘‘(c) EXCEPTIONS.— :snip:
‘‘(3) Correct errors in the appraisal report.

Therein lies the problem ... the UW believes it is a factual error.

Best reply would be "As per your documentation does an addition exist?"
"Then since it exists it is not a factual error but rather appraiser opinion whether or not to include it."

Removing the "factual error" element of the argument instead of addressing the issue as the UW sees it should free the appraiser from the stip.

 

[Mike Kennedy]

Therein lies the problem ... the UW believes it is a factual error.

Best reply would be "As per your documentation does an addition exist?"
"Then since it exists it is not a factual error but rather appraiser opinion whether or not to include it."

Removing the "factual error" element of the argument instead of addressing the issue as the UW sees it should free the appraiser from the stip.

Which is why I posted the Law and http://appraisersforum.com/showpost.php?p=2119483&postcount=42 :icon_idea:

 

[Mike Kennedy]

I'm not a lawyer, I am not a building inspector, I am not the police, I am not a member of the zba, I am not part of the local planning department, and I'm not even a home inspector. I'm an appraiser.

Kindly advise which definition of Highest and Best Use "As-Improved" (as of the Effective Date of Appraisal) is applicable to the OP and your assertion above - citing the source.

Thanks in advance.

 

[Mike Kennedy]

Just a thought:

What happens next following the building inspector's visit to your subject property following your discussion with the inspector?

I'm not suggesting that an appraiser should not verify what is legally permitted, but be certain that the parties with interest are aware of what you need to do.

Re the OP, the client and the Intended Users are already aware:

Permissible Use of Land
Fannie Mae does not purchase or securitize mortgage loans on properties if the improvements do not constitute a legally permissible use of the land.
Printed copies may not be the most current version. For the most current version, go to the online version at
http://www.efanniemae.com/sf/guides/ssg/. 532

Pg. 534

Highest and Best Use
If the current improvements clearly do not represent the highest and best use of the site as an improved site, the appraiser must so indicate on the appraisal report. Fannie Mae will not purchase or securitize a mortgage that does not represent the highest and best use of the site.

Examples of Unacceptable Appraisal Practices
The following are examples of unacceptable appraisal practices:
• Development of and/or reporting an opinion of market value that is not supportable by market data or is misleading.
• Misrepresentation of the physical characteristics of the subject property, improvements, or comparable sales.
• Failure to comment on negative factors with respect to the subject neighborhood, the subject property, or proximity of the subject property to adverse influences.
Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, General Appraisal Requirements
March 31, 2011
Printed copies may not be the most current version. For the most current version, go to the online version at
http://www.efanniemae.com/sf/guides/ssg/. 484

• Use of data—particularly comparable sales data—provided by parties who have a financial interest in the sale or in the financing of the subject property without the appraiser’s verification of the information from a disinterested source.
• Development of an appraisal or reporting an appraisal in a manner or direction that favors the cause of either the client or any related party, the amount of the opinion of value, the attainment of a specific result, or the occurrence of a subsequent event in order to receive
compensation and/or employment for performing the appraisal and/or in anticipation of receiving future assignments;
• Development of and/or reporting an appraisal in a manner that is inconsistent with the requirements of the Uniform Standards of Professional Appraisal Practice in place as of the effective date of the appraisal.
• Failure to address and note adverse factors or conditions that affect value or marketability with respect to the neighborhood, site, or improvements.
Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, General Appraisal Requirements
March 31, 2011
Printed copies may not be the most current version. For the most current version, go to the online version at
http://www.efanniemae.com/sf/guides/ssg/. 485


USPAP 2010 SR 1-2 (e)(i) (iv), SR 1-2 (h)
http://www.USPAP.org/USPAP/stds/sr1_2.htm

Subject: USPAP AO-28 / Due Diligence is Required
5. A real property appraiser accepted an assignment to appraise a three-unit residential property. The intended use of the appraisal was for mortgage financing. The client requested that the appraiser not verify the legal status (e.g., compliance with zoning, building codes, use permits) of the three units with municipal officials.

[FONT=&quot]The appraiser withdrew from the assignment because she concluded that the client’s assignment condition limited the scope of work to such a degree that assignment results are not credible in the context of the intended use. [/FONT][FONT=&quot] The use of an extraordinary assumption about the legal use of the property would not produce credible assignment results in the context of the mortgage financing use.[/FONT]