Do I have an "Ethical Obligation"?

[ZZGAMAZZ]

Although I've been remiss in failing to research the intended use of reporting prior transfers, it's my gut feeling that value--absolute or relative--is beyond the intent of the rationale for this standard. That is to say, going above min reporting requirements is a win-win, but going "outside" a standard by reporting info that appears to obfuscate the intent displays a lack of competency. But I don't know if USPAP addresses that scenario....

TOTALLY TOTALLY TOTALLY COINCIDENTAL--LIKE OFTEN PERTAINS TO AN AF THREAD--I encountered Form MPA3 today for the first time ever that includes the Section entitled Sales History of Subject Property, with a checkbox for "All prior sales . . . that are listed below and reconciled to the appraised value..."

So I stand wayyyy corrected although I don't understand why this optional form as an addendum for example to the 1004 can be used to report prior sales of the subject, although the same section of the main form 1004 doesn't include those instructions.

 

[ZZGAMAZZ]

It could be -discrimination is not always or only about race or ethnic. It is discrimination against a person or group for X reason. It is going way beyond SOW -

A lender is responsible for vetting their own applicants' buyers' financials and credit rating. We are not and in fact could create a problem for the client - a borrower could claim they were indeed a loan because of that info showing up in an appraisal.

Yep. And it might be easy to depict statistically significant differennt financial difficulties among different ethnicities.

 

[shrubberyvaluation]

I have a property that I inspected and eventually the owner met me there, after someone else provided access. This is over 9,000 sf, over 1.5 acres, pool, tennis court, separate indoor half basketball court, grill, outdoor fireplace, and a fire pit, and being leased. When I asked about the current rents, he didn't remember and had to back to the office and check, eventually he got back to me and said it was $30,000 monthly, but while he was there he told me his brother is leasing the property.

Well, after doing some research I found the property was under the name of their company, in March 2025 it was transferred out of the company and to the brother that is leasing it, and in April 2025 it was transferred to the brother that is the current owner of title. After some more digging I found out that the company filed bankruptcy and the property was up for some type of auction sometime in June 2025, and with some more research, found that the current owner was in the same boat on his residence.

Basically, the brothers owned the company together, it went under while the company held both of their personal residence. They transferred from the company to their own name, then transferred each property again to the other, so they are now technically leasing their own residences from their sibling. Is there any ethical obligation I have to report the shadiness of all this, or just report all the transfers for my property that I'm working on? Oh, and lets not mention the fact that I have absolutely no rental properties in that price point.

You have to analyse prior transfers....stick to the facts.

 

[Terrel L. Shields]

You have to analyse prior transfers...

even when you have no information to analyze, except for the transfer date, deed stamps (if any) and usually we have no source to say whether or not the transfer was arm's length, especially if not a prior history in the MLS. Easily half the transfers in the record are not included in the MLS. Name changes, DOD, transfers to Rev trusts - none of that appears in the MLS, only the public records. And USPAP is clear any such transfer is to be included in the history.

 

[ZZGAMAZZ]

even when you have no information to analyze, except for the transfer date, deed stamps (if any) and usually we have no source to say whether or not the transfer was arm's length, especially if not a prior history in the MLS. Easily half the transfers in the record are not included in the MLS. Name changes, DOD, transfers to Rev trusts - none of that appears in the MLS, only the public records. And USPAP is clear any such transfer is to be included in the history.

So... do you have specific verbiage when the nature of the transfer seems obvious but you dont know for sure, e.g. "the transfer appears to have been..." Or, can the appraiser's SOW include a blanket disclaimer that pertains to the status of issues that must be addressed, without definitive info? [I'll prob get blasted for lack of competence, or courage, but it's an issue that confuses me each time I analyze prior transfers... and as an aside, although I love love Spark, it makes me wonder whether the Spark default protocol to download all priors is sufficient. Your insight greatly appreciated as always.

 

[Tom D]

The whole original issue with transfers was fradulent flipping to spike the value. You note whatever you see over the X years. My program put transfers, dates, amount, name, etc on a seperate page. You have done your job, you state the facts, not an assumption of anything.

But, your appraised value maybe looked at closer to make sure you ain't helping value wise. How it's transferred isn't your legal opinion. The lender will decide.

And the price and size. I wouldn't want to do it. That seems like too easy a property to make some mistake. If the lender is nervous, they will get a review.

i'm more worried about the appraisal, than the legal ownership.

 

[ZZGAMAZZ]

The whole original issue with transfers was fradulent flipping to spike the value. You note whatever you see over the X years. My program put transfers, dates, amount, name, etc on a seperate page. You have done your job, you state the facts, not an assumption of anything.

But, your appraised value maybe looked at closer to make sure you ain't helping value wise. How it's transferred isn't your legal opinion. The lender will decide.

And the price and size. I wouldn't want to do it. That seems like too easy a property to make some mistake. If the lender is nervous, they will get a review.

i'm more worried about the appraisal, than the legal ownership.

Wonder whether the forthcoming form changes will remove reporting requirements about factors beyond the SoW of real property?

 

[Tom D]

The issue isn't the transfers. It's the increase in sale prices. With the subject, if you can't give a good answer to the recent price increases like being rehabd. Then the lender will not go ahead, will probable order a 2nd appraisal. Or all the comps were once owned by the current seller.

Way back before USPAP some small town in pa had like 60 fraud higher values.

A good reason for a recent price increase is a simple question to the owner. 1 minute investigation. Ethically, beyound my lawyer talents, the lender has those compliance people to look at the red flag on the report. But if your value is correct and everyone happy what was done wrong. However, my value may question as to what was trying to be done.

 

[Terrel L. Shields]

do you have specific verbiage when the nature of the transfer seems obvious but you dont know for sure,

No. I tell the truth. I do not know nor have information on any that transaction except public information. And transfers of heirship are just that.