New Commercial AVM.hmmm.

[Roger Murdock]

This has trouble written all over it:

http://www.firstamprs.com/products_services/survey_site_coordination/commercial_evaluation_services

And a sample "evaluation report":

http://www.firstamprs.com/sites/default/files/pcer_sample_6-2012.pdf

To my semi-trained eyes, that looks pretty damn similar to an appraisal. A bad appraisal, to be sure, but an appraisal no less. The only material difference I can discern is that it states, "this is NOT an appraisal". So, does such a disclaimer magically transform it into an "evaluation"? Is it really just a matter of semantics?

In any case, these look like they are generally not going to be worth the paper they are written on (or the pixels, as the case may be). Working strictly off of assessment data? Good luck with that!

I'll be the first to admit that human commercial appraisers are hardly infallible, but who would seriously place any degree of reliance on this degree of "analysis"?

 

[tsiegel]

I have a couple of bank clients begging me to do these as an appraiser and call it a restricted report. They are paying >$1,000 for each "Eval" and don't expect a very involved scope. My deal was, I would think about it, but not for >$1,000. I would do it closer to right and charge $1,500 to $2,000. They don't want to pay that. Oh well...

 

[Meandering]

Wow,

That's gutsy stuff.

No way, no gonna do it.


.

 

[hastalavista]

If not done by an appraiser, it isn't subject to USPAP.

If completed by an appraiser (with the assignment being given to the appraiser because he/she is an "appraiser"), then it is a non-USPAP compliant appraisal.

This is someone's answer to an "evaluation".
The AI has good guidance on how to complete an Evaluation: it is effectively "follow SR1 & SR2". :new_smile-l:

 

[JTip]

http://www.firstamprs.com/sites/def...ntempi_sczerba_thomas_front_back_jan_2013.pdf

fees

 

[GregoryK]

We did something similar to these at the company I worked for in Memphis. However, we also provided complete comp write-ups and independently verified each sale and/or lease used. The key is properly identifying the scope of work here. Having said that the fee structure they show is unrealistic. We got between $1,000 and $1,200 for these reports.

These reports were usually for low value loans where there was little risk, or a very low loan to value. Sometimes the borrower would pledge substantial liquid assets for recourse. Other times would be to re-classify a loan that was in arrears, or to update earlier appraisals. Occasionally, they may be used prior to foreclosure.

The issue is that were provide a service to our clients, We must provide a service that they require, not what we wish to provide. Have you looked around a seminar or chapter meeting lately? Very few people are entering the industry, and many are retiring. This further causes issues with our clients, and they will use whatever means they must to solve the problem at hand, if that means using brokers opinions, or assessment records, that may well come about. I think any service we can provide, both ethically, and in a manner that is not misleading and is perceived as a value to our clients is the proper way to conduct business. Again the issue is a proper scope of work.

 

[hastalavista]

Again the issue is a proper scope of work.

Scope of work is the driver for the level of analysis and communication required in the report.
SOW needs to be consistent with the intended use.
If all of that lines-up, and an appraiser is doing the analysis, then it (the "it" being the product identified by the OP) is an appraisal, structured within the relevant analysis and reporting requirements, and must be consistent with USPAP.

That really is the benefit of including an appraiser into this particular type of valuation tool (which is an appraisal, and needs to be USPAP compliant if completed by an appraiser):
An appraiser would be responsible for making a determination if the SOW is consistent with the (a) problem to be solved and (b) the intended use. The appraiser would be required to stop and engage the client in modifying the SOW to ensure the results are meaningful and consistent with the intended use if there were a concern.
I don't think another real estate professional (such as a broker) has that same obligation. I'm not saying they wouldn't say
"hey, for the Empire State Building, you need something more than this...",
but I feel confident in saying that if an appraiser thought the SOW was not sufficient, then he/she would be required to stop and not proceed unless that changed.

 

[GregoryK]

Denis I agree whole heartedly. My point is that I think many appraisers do not properly identify the proper SOW. They key I am focusing on is "the intended use."

In the situations were use these on, generally the property has been appraised earlier in a summary report. Second, the client is familiar with the property, which permits a lesser amount of descriptive information of the property. Third they are knowledgeable and understand the limitations of such a report. I think all of these points are necessary to be identified un the SOW decision.

As to my other point, I think the appraiser is the best one to provide these services. That is why I went on the rant about the BPO and Assessment information. to totally disregard a growing segment of the industry is I think catastrophic for appraisers. I feel more comfortable having an appraiser with many years of experience performing these so called "evaluations" than anyone else. Do you agree?

 

[Mountain Man]

If not done by an appraiser, it isn't subject to USPAP.

If completed by an appraiser (with the assignment being given to the appraiser because he/she is an "appraiser"), then it is a non-USPAP compliant appraisal.

This is someone's answer to an "evaluation".
The AI has good guidance on how to complete an Evaluation: it is effectively "follow SR1 & SR2". :new_smile-l:

There is one AMC who keeps sending us request for "evaluations". To top it off, they conveniently put in a maximum fee, usually $800 or $1,000. Their last request... was a foreclosed full developed subdivision. m2:

 

[hastalavista]

Denis I agree whole heartedly. My point is that I think many appraisers do not properly identify the proper SOW. They key I am focusing on is "the intended use."

In the situations were use these on, generally the property has been appraised earlier in a summary report. Second, the client is familiar with the property, which permits a lesser amount of descriptive information of the property. Third they are knowledgeable and understand the limitations of such a report. I think all of these points are necessary to be identified un the SOW decision.

As to my other point, I think the appraiser is the best one to provide these services. That is why I went on the rant about the BPO and Assessment information. to totally disregard a growing segment of the industry is I think catastrophic for appraisers. I feel more comfortable having an appraiser with many years of experience performing these so called "evaluations" than anyone else. Do you agree?

Yes, I do agree.
I've always thought of USPAP as being appropriately flexible in allowing appraisers to provide valuation services while balancing the requirement for meaningful and credible with intended use and and SOW.

Where friction occurs (IMO) is this:
A. The appraiser is not sure what he/she can or cannot do.
B. The client requests something that cannot be done in the manner that they want it to be done (which, usually means can I get this level of reliability if you only do this level of work?)

As a lender, once I have an asset pledged as collateral, I may need to monitor the value from time-to-time. I do not see that as requiring a full-fledged appraisal every 8-quarters. What was necessary for me to make the initial lending decision may be much more than I need to satisfy my collateral-value monitoring requirements. :new_smile-l:

As an appraiser, as long as I can match what the client wants to the level of credibility and reliability that the intended use requires, I'm ready for the assignment.
The only thing left to determine is if the client is willing to pay what I want to charge for that appraisal. :new_smile-l: