USPAP question

[Stephen J. Vertin MAI]

The subject has two property condition reports done by respected companies. The older report is more credible than the newer one. However, the client wants to use the newer report. Can a hypothetical condition be invoked to do so?

This is not someone trying to pull-a-fast-one. There are legitimate reasons.

 

[Tom Woolford]

Seems like since your name and insurance are on the line you use your own observations.

 

[George Hatch]

The appraisal would be based on an assumption (not an HC) but there are limitations to the use of an assumption, and using one you don't consider that credible will probably cross one of those limitations (namely, 1-2.f.ii below):


We can't EA (or HC) our way out of using information we consider to be not-credible. The whole purpose of an assumption is that we believe the info is true.

We can't use an HC to say this is what the value would be if this not-credible info was true because we can't get to credible off of not-credible info.

 

[PL1957]

The appraisal would be based on an assumption (not an HC) but there are limitations to the use of an assumption, and using one you don't consider that credible will probably cross one of those limitations (namely, 1-2.f.ii below):
View attachment 43657

We can't EA (or HC) our way out of using information we consider to be not-credible. The whole purpose of an assumption is that we believe the info is true.

We can't use an HC to say this is what the value would be if this not-credible info was true because we can't get to credible off of not-credible info.

He didn’t say “not credible”, he said “more credible”. I take that to mean both have validity. I’m assuming the reports cover areas which are beyond an appraisers expertise.

 

[Gobears81]

The older report is more credible than the newer one.

Who is competent enough to determine the credibility of said reports? If we don't have the expertise to complete these reports, then we probably don't have the expertise to determine their credibility either.
EA is the way to go, if you decide to go that route. But I recall my USPAP instructor answering several questions in the update course on it being a business decision more than a USPAP decision, which might be relevant here.

 

[George Hatch]

He didn’t say “not credible”, he said “more credible”. I take that to mean both have validity. I’m assuming the reports cover areas which are beyond an appraisers expertise.

Certainly. I wasn't trying to imply that the 2nd report couldn't be used, only that there's a limit to how lesser the lesser could be before it becomes unreasonable to use it.

 

[KHS445]

Does the client/intended user have access to both reports? If so how do you explain using one vs. the other? Sort of like saying I wasn't at that location and then having someone produce a dated & timed video of you being there.

I would probably disclose the existence of both reports and then explain why I relied more on one than the other. Could be a number of reason, just explain your thinking. Kind of like when we were all in school and the teacher would say I don't care how you get the answer, you have to show your work.

 

[Michael P Jacobs MAI]

<SNIIP> ...This is not someone trying to pull-a-fast-one. There are legitimate reasons.

Ouch, I hate these situations. If it were me, I would have to explain both reports and why I'm placing most weight here or there, and it would be an extraordinary assumption. YMMV. I just couldn't do it any other way without looking over my shoulder.

 

[J Grant]

The subject has two property condition reports done by respected companies. The older report is more credible than the newer one. However, the client wants to use the newer report. Can a hypothetical condition be invoked to do so?

This is not someone trying to pull-a-fast-one. There are legitimate reasons.

Once we know something about a property we can not "un know" it - have you read both condition reports? Or are aware there are two done but have not read them ? ( aka on what basis is the first report more credible ) .
I would disclose the two reports and whatever difference known between the two reports, then state client asked you to use the more recent report report for X reason- (I suppose you do not want to state the reason here, but what is a legit reason to base an appraisal on a less credible report-) I personally do not see a way to HC it, you simply agreed to appraise based on X client assignment condition.

Which brings up the question is it a better choice to turn down the job based on the client assignment condition .

 

[George Hatch]

Ouch, I hate these situations. If it were me, I would have to explain both reports and why I'm placing most weight here or there, and it would be an extraordinary assumption. YMMV. I just couldn't do it any other way without looking over my shoulder.

^^^ What he said

You can't uncrack an egg and you can't un-know about the other report or its conclusions. And whatever the reason is for using the one over the other, that bears disclosure, too.