Obtaining multiple valuations to select the most reliable valuation;

[NC Appraising]

How did I miss this? When did "value shopping become legal"

§ 1026.42 Valuation independence. | Consumer Financial Protection Bureau

§ 1026.42 is part of 12 CFR Part 1026 (Regulation Z). Regulation Z protects people when they use consumer credit.

www.consumerfinance.gov

3) Permitted actions. Examples of actions that do not violate paragraph (c)(1) or (c)(2) include:

(i) Asking a person that prepares a valuation to consider additional, appropriate property information, including information about comparable properties, to make or support a valuation;

(ii) Requesting that a person that prepares a valuation provide further detail, substantiation, or explanation for the person's conclusion about the value of the consumer's principal dwelling;

(iii) Asking a person that prepares a valuation to correct errors in the valuation;

(iv) Obtaining multiple valuations for the consumer's principal dwelling to select the most reliable valuation;

(v) Withholding compensation due to breach of contract or substandard performance of services; and

(vi) Taking action permitted or required by applicable Federal or state statute, regulation, or agency guidance.

 

[Terrel L. Shields]

Well...it is an opinion. Jumbo loans generally require 2 appraisals. The old original 3 person panel to determine an estate value - still used in certain counties in OK, was an effort to bring group effort to the cause and prevent relying solely upon a single person's opinion. The more complex or rare a property is, the better it is to have multiple viewpoints.

 

[J Grant]

How did I miss this? When did "value shopping become legal"

§ 1026.42 Valuation independence. | Consumer Financial Protection Bureau

§ 1026.42 is part of 12 CFR Part 1026 (Regulation Z). Regulation Z protects people when they use consumer credit.

www.consumerfinance.gov

3) Permitted actions. Examples of actions that do not violate paragraph (c)(1) or (c)(2) include:

(i) Asking a person that prepares a valuation to consider additional, appropriate property information, including information about comparable properties, to make or support a valuation;

(ii) Requesting that a person that prepares a valuation provide further detail, substantiation, or explanation for the person's conclusion about the value of the consumer's principal dwelling;

(iii) Asking a person that prepares a valuation to correct errors in the valuation;

(iv) Obtaining multiple valuations for the consumer's principal dwelling to select the most reliable valuation;

(v) Withholding compensation due to breach of contract or substandard performance of services; and

(vi) Taking action permitted or required by applicable Federal or state statute, regulation, or agency guidance.

The most reliable is not the same as the highest value, though who gets to judge and decide what is the most reliable?

Witn many too cheap to pay for one appraisal would like to see them order multiple ones lol-- note that it says "valuations,"-a valuation can be an AVM, or other, it might not be an appraisal

 

[Ricky LaFleur]

The most reliable is not the same as the highest value, though who gets to judge and decide what is the most reliable?

That's a fair concern, as the highest value will likely be deemed the "best" appraisal by the users lol. But Terrel has a point, especially the less cookie cutter they get.

Well...it is an opinion. Jumbo loans generally require 2 appraisals. The old original 3 person panel to determine an estate value - still used in certain counties in OK, was an effort to bring group effort to the cause and prevent relying solely upon a single person's opinion. The more complex or rare a property is, the better it is to have multiple viewpoints.

I had a family member with a larger custom home in a rural area appraised by some newer appraiser for around half a million (and apparently poorly done). Then it was reappraised for nearly double that by someone else shortly after. Not saying the latter was "better", I didn't see either one. Who knows, maybe they spooked the second one telling how low and "awful" the first one was so the second person was shooting for the stars.... shoot that almost sounds like the whitewash stories in the news!

 

[Terrel L. Shields]

In court cases, I've seen valuations that varied by tens of thousands of dollars, 30-40% difference. And, in one case I was involved, the bare land tract was judged to be either $900, $1100, or $1,400 per acre. There were five appraisers. I was there solely to testify that the mineral rights were part of the value and the minerals had value. The defendant said it was $900, the plaintiff $1,400, and a 3rd appraiser agreed upon by the other two appraisers came in the middle and that was the one the judge took as the "true" value. That appraiser did not testify as he had a wedding in NY to go to...but he prevailed. I knew 3 of the 4 appraisers personally despite the property being in central Arkansas.

 

[Tom4value]

How did I miss this? When did "value shopping become legal"

§ 1026.42 Valuation independence. | Consumer Financial Protection Bureau

§ 1026.42 is part of 12 CFR Part 1026 (Regulation Z). Regulation Z protects people when they use consumer credit.

www.consumerfinance.gov

3) Permitted actions. Examples of actions that do not violate paragraph (c)(1) or (c)(2) include:

(i) Asking a person that prepares a valuation to consider additional, appropriate property information, including information about comparable properties, to make or support a valuation;

(ii) Requesting that a person that prepares a valuation provide further detail, substantiation, or explanation for the person's conclusion about the value of the consumer's principal dwelling;

(iii) Asking a person that prepares a valuation to correct errors in the valuation;

(iv) Obtaining multiple valuations for the consumer's principal dwelling to select the most reliable valuation;

(v) Withholding compensation due to breach of contract or substandard performance of services; and

(vi) Taking action permitted or required by applicable Federal or state statute, regulation, or agency guidance.

Really? I’ve always respected your expertise so, in all respect, I am confused.

The only, for lack of a better word, “rebuttal “ is to ask to consider other “properties”. Only the appraiser can consider them, “comparables”. I get this and I address each property directly. I only do it once. If they come back with, “ok, how about these?” I shut them off, claiming “influence”.

The client can always ask for further detail. I learned from day one that writing the report is most important and an art form. The client is entitled to understanding your work. I have gotten this request many times in my 34 years (the latest last week). I am a great appraiser and know what I mean but maybe they don’t understand what I meant. Do it!

Correct errors? Come on! If it is a factual error, correct it!

 

[alebrewer]

I believe the action is permitted so that a lender is not 'stuck' with a crappy appraisal.

 

[NC Appraising]

Really? I’ve always respected your expertise so, in all respect, I am confused.

The only, for lack of a better word, “rebuttal “ is to ask to consider other “properties”. Only the appraiser can consider them, “comparables”. I get this and I address each property directly. I only do it once. If they come back with, “ok, how about these?” I shut them off, claiming “influence”.

The client can always ask for further detail. I learned from day one that writing the report is most important and an art form. The client is entitled to understanding your work. I have gotten this request many times in my 34 years (the latest last week). I am a great appraiser and know what I mean but maybe they don’t understand what I meant. Do it!

Correct errors? Come on! If it is a factual error, correct it!

Not what I was speaking of. I should have taken out the others to avoid confusion. I would, but you can no longer edit posts.

Title of thread: (See my post after this one)

Obtaining multiple valuations to select the most reliable valuation.​

I have no problems with rebuttals or correcting errors.

This was the purpose of post: (iv) Obtaining multiple valuations for the consumer's principal dwelling to select the most reliable valuation;

 

[NC Appraising]

I believe the action is permitted so that a lender is not 'stuck' with a crappy appraisal.

Probably was put in there for that reason. Or the lenders lobbied so that they can have a way out to order another appraisal so that they would not lose out to their competition.

I remember coming in low on a purchased 4 years ago. I accidentally checked "slab", even though I took the pic of the foundation and the crawl space. The order was for a conventional loan....Did the lender asked to to correct this? No. Did I get a call from the buyers agent asking if homes with crawl spaces have more value? Yes.

After not receiving any more orders from this company, I checked to see if the loan went through. It did. They must have used that one error to order a new appraisal.

My appraisal was not crap, just one error that did not affect the value (as I said, they had a pic or the crawl space and the pic was labeled crawl space.) If they asked me to fix the appraisal, they could not justify ordering a new appraisal....for value shopping purposes.

I have another lender that will research the heck out of my appraisal and for comps when I come in low....looking for a reason to order another appraisal or to reject the report to lower my score (less orders).


FWIW, I think lenders are abusing what was supposed to be a meaningful change in the practice. Instead of when seeing a juiced appraisal and ordering another one, they are doing the opposite. They are nick picking the reports just to have an excuse to order another appraisal.

 

[Tom D]

definition of r.e. value. the most reliable, to be picked by happy lender & buyer. but i haven't seen a low value since r.e. was going up 10% a year.
if you don't like a doctor's opinion of your problem, you don't get a 2nd opinion.
funny thing about an over priced sale. the happy buyer becomes the angry owner when they can't refi in a couple of years.