Contract Price

[J Grant]

That's why you should use different certifications for the first appraisal report when submitted on the URAR. No problems there because you don't intend to generate an XML file with that first submission. "Purpose" and "intended use" are interchangeable terms. How many assignments have you completed for divorce, estate, purchase evaluations, pre-listing purposes, etc. on the URAR prior to the widespread adoption of GP forms? Should we all turn ourselves in to the USPAP & Fannie Mae police for that?

Purpose and intended use are not interchangeable terms - far from it.

The purpose of the appraisal defines what the appraisal and appraiser seeks to establish- market value in most cases and it says it right ther on the URAR ( purpose an opinion of market value )

The intended use ( in the certs of a URAR ) addresses how clients and their users/affiliates will use the appraisal. ( Evaluate the subject property for lending )

 

[alebrewer]

Is section B of the selling guide for the lender or the appraiser?

It is for the lender, and underwriting is a function of the lender. That is the context of the example.

Both.

If the appraiser 'MUST' (as you'll be forced to agree), then the directive is for the appraiser. I'm cool with your assertion that the underwriter has to verify that the appraiser did, but the fact remains that it's the appraiser who MUST, not the underwriter. In which case, the guidance is written for the appraiser.

To carry your logic to its conclusion: the Selling Guide isn't written for the appraiser, thus the appraiser does not need to follow it, because it's written for the underwriter. That is ludicrous.

 

[Mike Ault]

Purpose and intended use are not interchangeable terms - far from it.

The purpose of the appraisal defines what the appraisal and appraiser seeks to establish- market value in most cases and it says it right ther on the URAR ( purpose an opinion of market value )

The intended use ( in the certs of a URAR ) addresses how clients and their users/affiliates will use the appraisal. ( Evaluate the subject property for lending )

Okay then. And when the intended use of your appraisal changes from "determining a contract price" to "mortgage underwriting", you have performed a new assignment. Which means you can't simply "revise your report" and remain in compliance, can you? "Intended use" is an important assignment element and changing that triggers a new assignment.

 

[J Grant]

Both.

If the appraiser 'MUST' (as you'll be forced to agree), then the directive is for the appraiser. I'm cool with your assertion that the underwriter has to verify that the appraiser did, but the fact remains that it's the appraiser who MUST, not the underwriter. In which case, the guidance is written for the appraiser.

To carry your logic to its conclusion: the Selling Guide isn't written for the appraiser, thus the appraiser does not need to follow it, because it's written for the underwriter. That is ludicrous.

Well, USPAP does not say the appraiser must have entered a CS price, or even have a contract, in order to proceed with an appraisal that can be a purchase.

If the bank. Lender, Fannie, etc, insist the appraiser must enter the CS price; then we are on the same page. The appraiser enters the CS price when that is provided. Then the lender can submit the loan. The CS price can be needed to submit the appraisal to fannie and Freddie, but the CS price is not needed to develop the appraisal.
n

 

[J Grant]

Okay then. And when the intended use of your appraisal changes from "determining a contract price" to "mortgage underwriting", you have performed a new assignment. Which means you can't simply "revise your report" and remain in compliance, can you?

The intended use was never spelled out as determining a contract price.

I am developing an opinion of market value. The parties are free to set a contract price on it, or decide not to proceed, whatever.

The intended use is what the users might do with the appraisal, not what the appraiser is supposed to do. Teh purpose is to develop an opinion of MV.
If a user or even an unintended user decides to base or negotiate a purchase price from the appraisal, that is out of our control, though since we are aware of it, we soujld comment on it.

 

[alebrewer]

Well, USPAP does not say the appraiser must have entered a CS price, or even have a contract, in order to proceed with an appraisal that can be a purchase.

Correct - it doesn't. That is an assignment condition you implicitly agree to when you agree to perform an assignment for secondary market purposes. If you don't want to follow the F/F selling guides, don't accept secondary market assignments. Easy peasy.

 

[Surf Cat]

I'm in the "there needs to be two appraisals" crowd. First one on a GP form to determine market value (since it's a intra-family transaction, not a pre-listing) then the second on a 1004 for the loan.

Having said that, I'm wondering if the op has contacted the lender to inform them of the conundrum that there is no purchase price on the contract. Conveying to the lender that the purchase price is going to be determined by the appraised value.....

I would certainly do that via email as I would want that in my work file if they stated to proceed without a price in the contract section OR the price entered in the contract section AFTER I determined my opinion of value.

 

[alebrewer]

I'm in the "there needs to be two appraisals" crowd. First one on a GP form to determine market value (since it's a intra-family transaction, not a pre-listing) then the second on a 1004 for the loan.

Having said that, I'm wondering if the op has contacted the lender to inform them of the conundrum that there is no purchase price on the contract. Conveying to the lender that the purchase price is going to be determined by the appraised value.....

I would certainly do that via email as I would want that in my work file if they stated to proceed without a price in the contract section OR the price entered in the contract section AFTER I determined my opinion of value.

And to the folks crying that 'it's not fair to have to pay for two appraisals' - they're not. Anyone in their right mind is not going to replicate all of the steps from start to finish for the 2nd appraisal. They're going to change forms, copy and paste, and change the signature date. I'd probably charge $100 for the 2nd iteration.

 

[J Grant]

And to the folks crying that 'it's not fair to have to pay for two appraisals' - they're not. Anyone in their right mind is not going to replicate all of the steps from start to finish for the 2nd appraisal. They're going to change forms, copy and paste, and change the signature date. I'd probably charge $100 for the 2nd iteration.

Difference of opinon, I see no need for two appraisals ( which has nothing to do with a fee ) Imo, a revision that adds a contract price to the first appraisal is what would sufice.

 

[J Grant]

I'm in the "there needs to be two appraisals" crowd. First one on a GP form to determine market value (since it's a intra-family transaction, not a pre-listing) then the second on a 1004 for the loan.

Having said that, I'm wondering if the op has contacted the lender to inform them of the conundrum that there is no purchase price on the contract. Conveying to the lender that the purchase price is going to be determined by the appraised value.....

I would certainly do that via email as I would want that in my work file if they stated to proceed without a price in the contract section OR the price entered in the contract section AFTER I determined my opinion of value.

Need two appraisaals if the buyer orders the appraisal and then it is done on a GP form.

But if the lender orders it on a URAR form, do the appraisal for market value and state the SC price was not provided, and enter it later if they exucte the contract with a price and lender /clientneeds you to revise teh appraisal with the price entered for submission.