Can it be an EA if it cannot be found to be false ?

[ZZGAMAZZ]

Because you "think" it cannot be proven wrong or right, does not mean it cannot be. Someone somewhere knows the answer or will be able to know the answer upon inspection by an expert...etc. Perhaps a destructive test, nevertheless, knowable. It is not an unknown unknown. Soft spot in floor? Maybe termites. OTOH, maybe not. Not my call.

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The interior side of an attached garage is encroached upon by the outside 2 ft of a brick fireplace that fronts the living room. Original building permits don't address the extence of a garage although the JA doesn't know whether a garage would have been incuded in permits 60 years ago. The fact that the 1-car garage with what has become a 7 ft side-to-side width can't accommodate a full-size sedan as a source of functional obsolesence notwithstanding--also notwithstanding the non-conformity posed because the current legal garage min is 2 cars--the OP addresses the possibi;ity of applying an EA--although the absence of permits precludes the possibility of determining definitively whether the garage was a non-permitted afterthought, or integral to the original construction without being disclosed of in the permits.

 

[George Hatch]

"this line of questioning being based upon hypothetical testimony of an appraiser who would be hard pressed IMO to confirm the rationale for applying an EA, which could be neither confirmed nor denied, and consequently impinging his or her credibility . . "

That's a nice word salad you've got going there.

Try this: I saw something at the subject and I have reason to believe it to be purple, so for the purposes of this analysis I am assuming it actually is purple. If my assumption proves to be incorrect it could have a significant effect on my opinions and conclusions.

It doesn't matter what the thing in question is or why you're uncertain of it or whether it can effectively or literally be proven or disproven; you're still making an assumption in the appraisal. Subject to the limitations of the use of that assumption as laid out in SR1-2.f.

Moreover, if you're not certain of something and that something cannot be ignored in your analysis then you have to make an assumption one way or another. It's not some add-on upgrade that you can choose to buy or not buy, you have to do something in order to proceed with your assignment, so this is what you've chosen to do. SR1-2.f acknowledges your need to do it and provides the limitations that prevent any misuse of the EA.





In the example provided your rationale is that you believe this structure was permissible when it was added but you're not sure of it's permissibility. You need to deal with it one way or another in your analysis(i), you believe it to be permissible (or not permissible) because of zzz (ii), and you aren't lying or incompetent so on that basis your reader should consider the results credible (iii).

Whether or not the permit status can be confirmed using 2019 technology is irrelevant. The reasons why that may be the case are irrelevant. The fact is that you've run into a situation that you have to make a decision on one way or another, and in lieu of information to the contrary this is what you think.

 

[sputnam]

It says, ..."IF..." it is found to be false. It doesn't say that it's use is confined only to assumptions that are actually verifiable. The essence of the EA is... 'I don't know'. The HC says... 'I know it's not true, but I'm going to pretend like it is'.

 

[ZZGAMAZZ]

"this line of questioning being based upon hypothetical testimony of an appraiser who would be hard pressed IMO to confirm the rationale for applying an EA, which could be neither confirmed nor denied, and consequently impinging his or her credibility . . "

That's a nice word salad you've got going there.

Try this: I saw something at the subject and I have reason to believe it to be purple, so for the purposes of this analysis I am assuming it actually is purple. If my assumption proves to be incorrect it could have a significant effect on my opinions and conclusions.

It doesn't matter what the thing in question is or why you're uncertain of it or whether it can effectively or literally be proven or disproven; you're still making an assumption in the appraisal. Subject to the limitations of the use of that assumption as laid out in SR1-2.f.

Moreover, if you're not certain of something and that something cannot be ignored in your analysis then you have to make an assumption one way or another. It's not some add-on upgrade that you can choose to buy or not buy, you have to do something in order to proceed with your assignment, so this is what you've chosen to do. SR1-2.f acknowledges your need to do it and provides the limitations that prevent any misuse of the EA.



View attachment 43227

In the example provided your rationale is that you believe this structure was permissible when it was added but you're not sure of it's permissibility. You need to deal with it one way or another in your analysis(i), you believe it to be permissible (or not permissible) because of zzz (ii), and you aren't lying or incompetent so on that basis your reader should consider the results credible (iii).

Whether or not the permit status can be confirmed using 2019 technology is irrelevant. The reasons why that may be the case are irrelevant. The fact is that you've run into a situation that you have to make a decision on one way or another, and in lieu of information to the contrary this is what you think.

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Your Aristotelian insight could not have been "better put" by the proverbial 12 monkeys commissioned to revise USPAP so it makes sense to lowbrow minds like mine. Much appreciated.

 

[ZZGAMAZZ]

Morphing into a related issue . . . the intended users of this lending assignment are FHA and the mortgagee, although it seems that Public Trust would be enhanced if the buyers received a heads-up that their family vehicle might not fit into the garage of the home they're buying. The report will describe the garage dimensions (including the fireplace encroachment); and the corresponding functional obsolesence will be addressed in the "Condition," "Cost," and "SCA" (with the caveat that the salient JA perspective pertains to the absence of a 2-car garage regardless of the specific dimensions of the existing 1-car garage). So are the buyers who will be mosts affected considered to be additional intended users?

 

[Terrel L. Shields]

So are the buyers who will be mosts affected considered to be additional intended users?

No, a thousand times no. It is not YOUR JOB to add someone as intended user. It is the job of the banker to identify all intended users. And as I understand D-F and other bank laws, if the BORROWER is an intended user, then the bank cannot use the appraisal to support the mortgage. The borrower is supposed to be out of the loop. However, they are given a copy of the report and can see that for themselves.

 

[KONA]

Heed what TS is saying. You put yourself in a risk position.

 

[George Hatch]

It's never a bad idea to consider your readers, including those who may not be among your intended users.

One reason a borrower is not the intended user of one of these appraisals is because the appraiser cannot know what level of development and reporting will be meaningful to them, or exactly how they're going to use the appraisal if not for the stated use of making a mortgage - which you already know that borrowers don't do.


How relevant is knowing who an intended user is if you cannot know their use or what will be meaningful to them?

Are they using the appraisal as a substitute for a property inspection or to verify GLA or identify permit status? Are they using the appraisal to renegotiate the price? Are they using the appraisal to validate the price? Are they using it for a property tax assessment appeal? Are they using it in their divorce? Or with the IRS?

We've already got a thread going on the Fannie approach to handling 2 lot assemblages where one parcel is improved and the other is vacant; and their approach basically creates its own value which is not in line with all the assumptions of MV as defined. If they somehow get their way then the appraisal that is meaningful to Fannie under what amounts to their definition of Mortgage Value those terms will be different than an appraisal which actually answers the question of Market Value.


Adding users and uses increases the number and types of expectations the appraisal report needs to meet. And when some of those uses or users are in conflict or competition with each other it gets even more convoluted. Throw in the additional variable of not really knowing what these additional expectations are and it because an unwinnable situation.

 

[glenn walker]

A lot of assumptions, the problem is none of them protect the appraiser in fact, allmost every example would place the appraiser into a tenable position, if ever challenged, and his/her credibility would quickly be destroyed.

 

[ZZGAMAZZ]

A lot of assumptions, the problem is none of them protect the appraiser in fact, allmost every example would place the appraiser into a tenable position, if ever challenged, and his/her credibility would quickly be destroyed.

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Speaking of which . . . does evidence exist of a scenario when an appraiser's use of an EA was actually useful, as pertains to liability ?