Contract Price Change After Effective Date - Client Wants It In The Contract Section

[CANative]

Nonsense, balderdash, and poppycock.

 

[Workshop]

I'm assuming this issue is resolved considering it's Sunday. However, I will reply.

When I am faced with this situation I provide an updated report with the contract price changed and reference to this in the addendum with a new signature date.

Considering I inspected the property as of the effective date I dont look at this as a new assignment.

Question is...do you ask for a fee???

 

[CANative]

No. It's just one of those things that are built into the general pricing plan.

 

[The Bob]

Once again, appraisers are asked to address an underwriting issue. This is how I handle it.....

*Change page 1 to reflect new price

*Analyze new contract on page 1

*Add addendum stating what's happened and why, and include the analysis of the original contract.

*Change signature date to date you made these changes

*State that effective date in unchanged

I understand and respect other views. But this is one way to handle it. Its clear as day and the only person that could possibly be confused by it is maybe another appraiser

 

[residentialguy]

Another example of people mixing USPAP with client/assignment conditions.

The GSEs require their correspondent lenders provide the appraiser with revised contracts to "give the appraiser the opportunity" to analyze it. If the result of that analysis does not change the conclusions or opinions then the appraiser is not required to comment further. Of course, the entire point is for the appraiser to acknowledge that the clients obligation has been fulfilled so all that needs to happen is writing a comment in a dated addendum acknowledging receipt.

This is not a new appraisal assignment. Just issue a revised report with a new report date.

Yep.....and many here have probably missed your sneaky way of saying that it could even lead to a new opinion of value. Oh my, jg liked your post

 

[CANative]

If they just renegotiated to the appraised value then there is nothing for the appraiser to really analyze and nothing that would affect the opinion of value.

 

[residentialguy]

True. But if they negotiated to a different price, there might be reason for a new opinion of MV

 

[Mike Kennedy]

True. But if they negotiated to a different price, there might be reason for a new opinion of MV

That might be true IF the physical characteristics of the subject's site or site improvements changed. IF not - zero reason for OMV to change. MV is determined by the competitive market - OTHER buyers of OTHER properties which would serve as substitutes for a subject's real property.

The CP$ is totally irrelevant as it reflects only the hopes, dreams, goals, and aspirations of ONLY a particular buyer and a particular seller - NOT the competitive market. A purchase price may, or may not be competitive due to specific motivations of parties with vested interests in "doing the deal".

It may or may not be supported by the Competitive Market. Determining same is the primary reason for an INDEPENDENT, and wholly Objective (not subjective) Opinion of Competitive Market Value.

The other is for a Lender to have a compliance document - and an Appraisers' E & O insurance policy to target when the loan defaults because they floated a loan to people who could fog a mirror without adequate financial qualification.

Whether a contract exists, or not is irrelevant to Market Value. Regardless of who the seller, buy, or lender may be - OR the purpose of an appraisal (loan, trust, estate, bankruptcy, divorce etc.) - MV is demonstrated by the Competitive Market - NOT an Active Listing, a Contracted Listing or a Purchase Contract ALL of which are not yet confirmed by the competitivemarket and are mutable prior to closing.

 

[residentialguy]

or if something else was found out or disclosed.

 

[residentialguy]

You also could have had your OMV based upon as the single point in your range of equally most probable prices. It would be ballzy to change it, but you could with good reason, stating that the subject was found to the a good indicator of value. But typically the price change is offset by something like seller paids, therefore the OMV would remain the same