A little USPAP help.

[pkbarnhart]

Standard Rule 1-5 says I need to analyze any current listing. (binding)

I am completing a 2055 which has no blanks for "listing data" on a home that was listed for approx. 6 months and is now off of the market. The owner says that they decided to "add on" rather than "move up". I don't see where the past listing has any affect on the current market value and LO says that if I mention that the home was listed within the past 6 months then the company won't make the loan.

What do you think? Do am I legally required to discuss past listings if I determine that they have no relevance to the current market analysis?

Any feedback would be greatly appreciated.

 

[Tim Hicks (Texas)]

Look at the line under the market grid on the 2055. It says "analyze any current agreement of sale, option or listing and prior sales of the subject and comparables.

 

[pkbarnhart]

Tim- Thanks for the reply. But- the question I guess I am asking is do I need to discuss any PRIOR listings if it is not listed on the inspection date?

 

[Tim Hicks (Texas)]

That is where the gray area is in the report. I believe you should state any listing of the property in the past year. It is pertinent, would be discovered in any field review, and would take away any thoughts that you would be providing a misleading report. If it was listed for $59,000 and you appraised it for $79,000, don't you think an explanation would keep you out of hot water. I would tend to think that if a property was listed for six months and did not sell, then it is likely it was nto worth the list price. There is no guideline that says you have to mention it, but don't you think it sould benefit you to mention the fact?

 

[Tater Salad]

My opinion is that you would be making an error of omission if you did not report it. If you don't tell underwriting that it was listed for sale in the past 6 months, how else are they going to know?

They rely on us to disclose any prior listings, sales, etc. Not disclosing would be putting your fanny on the line, especially knowing that the loan would not be made if this information was disclosed.

I've been screamed at many times for disclosing this, but never by an underwriter. Only by an LO trying to hide it.

 

[Restrain]

Whether the borrower gets the loan is not your business. Your job is to research, investigate and report. John Q. Borrower listed his home, report it in the addendum section of the 2055. Cite how much, how long, and that it is off the market.

Hypothetical situation: Borrower lists home for $150,000 for 6 months, has no acceptable offers and takes home off market. He then wants to refinance, giving a qualifying value of $200,000. Appraiser ignores listing information, appraises home at $200,000. If you were reviewing the appraisal, would you cite the appraiser for ignoring the listing? Of course you would.

Now I'm sure that you wouldn't do that, but it's better to include more information than less.

 

[Tim Hicks (Texas)]

Also, don't we have usually add USPAP addendums to our reports to cover things that are not on the form? You should not leave it out just because it is not on the form. What is proper and correct can not be covered up by any inadequacy of a form.

 

[Mountain Man]

I am with Tim on this one. I would mention the recent marketing history and the explaination from the home owner "that they decided to add on rather than move up." I report any activity within the year to CYA :!:

It is the appraiser's job to report the truth and give a supported opinon. It is the LO's job to place the loan. I don't care if he has trouble placing the loan, it is not my worry. I am protecting my client's interest, which is NOT the LO. :wink:

 

[Tim Hicks (Texas)]

The old saying, "better safe, than sorry" really carries a lot of weight in the appraisal profession. Go see the disciplinary actions at the TALCB site. Also, note that Jo Ann is quoted in a manufactured home assemblage issue.

 

[Jo Ann Meyer Stratton]

I am going to have to read those sanctions again, I do know I am quoted in their article on their website, but I didn't notice it in the sanctions. Heavens to betsy, I am going to have to be more careful what I say!!

Also check out on the Appraisal Foundation website the the changes for 2003 that is posted in June. That is where the update gets changed to a reference. And also the 3 year history, I am jumping on that band wagon and not only including a three year sales history for my subject and all comparables but also their three year listing history. Should really get interesting in the future.

You home work assignment this week is to read the changes to USPAP for 2003 and determine what they will mean in the future!