2055 Exterior

[Don Clark]

B) There should be no reason this cannot be done with a properly developed scope of work. This would include a detailed outline of the fact that you did not do an interior inspection, and that you are relying soley on the data avaiable from sources you deem to be reliable but make no guarentees or warranty as to the condition of the interior of the subject. If you have data sources that are unreliable, or that you have no confidence in, then that is another story. The whole scope of work issue should be clearer once USPAP is changed, departure is eliminated, and the Cope of Work Rule becomes effective in mid 2006. This idea that one size fits all, and that a property can only be appraised with an interior inspection is contrary to common sense, logic, and USPAP which does not require that a property ever be inspected, subject or comparables, only that you report the degree to which a property has been inspected, if it is in fact inspected. Reliabilty attaches directly to the scope of work, not whether or not an interior inspection was done or not.

 

[Greg davenport]

First thing first. What is the use of the report? We do several pre REO 2055 a month for one company. The just want to make sure the property still stands, and if the value is close to what was loanded on it. For them a 2055 based on good county records is all they want and need.

Check your scope of work, and TALK to your client. find out what THEY need and want before doing anything.

 

[The Bob]

What the hell does the "value range" have to do with the report format. If you can develop a reliable opinion of value based on exterior inspection and available data, then why not do it? If you're worried about increased liablity because of the value, that's one thing, but it has nothing to do with whether or not your opinion of value based on exterior inspection can be relied upon.

 

[KD247]

What the hell does the "value range" have to do with...

What the hell? Kind of makes a person sit up. I'm going to try harder to begin questions with "What the hell"..., "Why the hell...", and "How the hell...".

Some clients are likely to doze off while discussing additional fees. But I bet they pay attention when I shout out, "How the hell do you expect me to appraise a 40 acre ranch for $325?"

 

[Otis Key]

Wasn't it in CA in the pre S&L fiasco where an S&L had been loaning money on a house based upon "drive-by" appraisals and then the borrower/owner died and they found out that the "estate view" from the public street was a facade and there was only something like a 1,000 sf trash house behind it?

 

[Webbed Feet]

Originally posted by Peter LeQuire, IFA@Sep 30 2005, 09:37 AM
Lastly, I won't do an appraisal based on an exterior-only inspection for any client other than a lender, and I make sure that the lender is named as the only intended user I specifically exclude the borrower as an intended user.

Good luck with the new Fannie Mae forms then. :blink:

Barry Dayton

 

[Peter LeQuire]

Seems like we've parsed the new Fannie forms to death, but, correct or incorrect, my take on the infamous #23 is that reliance on the appraisal is limited to a mortgage finance transaction. (To me the open door is the borrower running to multiple lenders with the appraisal, not that the borrower will use the appraisal for estate planning or for selling the property.) Since the intended use of the appraisal is limited to a mortgage transaction, and the intended user is the lender/client, I"d argue that any other use or user is not contemplated and is outside the scope of the appraisal - just like now. Will I do appraisals predicated on "drive by" inspections? Probably: but I'll probably do them at something less than 60 mph.

Otis -

A thousand years ago, in my previous life as a mortgage person, I got a call one end of month day from our appraiser indicating that one of the houses we were supposed to close for our largest homebuilder was a shell: the exterior, including yard, drive, porches and decks were done, but the interior was open stud walls with no plumbing or electrical rough-in. Sometimes you gotta do a little more than just take pictures.