A Question to Stir Up a Little Discussion

[Richard Carlsen]

I don't like stirring the pot like this. Especially when everyone is so busy but this really happened to me. I'd like to hear what you would have done and why to this situation. I'm not going to tell you what I did until later.

Keep the answers short and to the point. (Consider this a question with summary responding)

Three weeks ago I received an assignment for a 1004 from an AMC for a small house on a small acreage parcel. It was a sale. A copy of the P.A. and listing sheet was sent. I contacted the listing broker and was told the house was vacant. A key was hidden on site. I did the inspection and wrote the report and sent it in via e-mail. There was nothing wrong with value. In fact, it came in right at the listing price.

Two days after sending the report off, I received an order from a different AMC for a 2055 appraisal on the same house and with the same borrower. They did not report that it was for a sale financing nor provide me with a P.A.

Question: What would you do and why?

Addendum #1: I should make it clear that the orders were for different AMC's and for different lenders.

 

[jtrotta]

1) Would not release anything/nor do the new request until payment was made. Been there/done that before.

2) Charge the same Fee for #2 (another AMC-hey their charging)

3) Make arrangements for Dinner for two - with lots of bubbly :lol:

8)

 

[Jo Ann Meyer Stratton]

I have had similar situations due my small, isolated area and my personal comfort level is:

I inform the second client that I would not be able to complete an assignment for them without permission from the original client because of a very recent assignment for someone else. I don't go into details of who, how and why. If you had accepted the second assignment, you would need to disclose the pending sale if it has already been posted as pending in the MLS. If for sale by owner or still posted active then that offering for sale would need to be describe in the second report. You would also be reporting the current ownership versus the name on the second owner. You would also have identify the source of your information from having been inside the property. So back to the original statement of not completing the a second report without permission from the original client. Yes, I am sure there is a grey line in USPAP that would allow the second assignment--but I am the higher authority for my own actions. And I keep my competition's phone numbers handy for this type of situation.

 

[Restrain]

Seems you have a second appraisal request. AMC's generally pay, as opposed to mortgage brokers, so march onwards to more income.

 

[Dave Smith]

Richard:

Recently I have had three situations that could have developed into what you describe. Because I have been moving VERY slowly in making the apppointments for AMC ordered appraisals I have been getting the second order before I make the first appointment, or getting the order canceled before a problem can even develop.

In one case the borrower told me to hold off when I called for the appointment. They were not going to finance with the first lender so I should hold off. I got the order from the second AMC too.

In the second situation the borrower told me another appraiser had already been there for a second lender. As busy as I am I didn't mind losing the assignment but why didn't the first AMC call me to cancel?

In the third situation the AMC did call me to cancel because the borrower was going with another lender. I got that order too.

What I've learned: The AMC's order the appraisal as fast as they can (sometimes before the borrower even decides who they are really going to finance with) so they can earn a fee.

Lots of "goofy" stuff going on with AMCs these days. Beware :!: :!: :!:

 

[John Hassler]

You have a client relationship with the first lender. You can not do the same job for the second lender unless you have permission from the first lender OR that first relationship has ended. When it ends is debatable but in this case I believe it would be when the transaction for the use of the appraisal has been completed (in this case closing the purchase loan). Therefore, I believe you could work for the second lender AFTER the sale without the first lenders permission. How the information is commuted (1004 or 2055) and whether it's for the same borrower is irrelevant in this question. JMO

John Hassler

 

[Farm Gal]

Richard: you may have missed this post under a prior question by Jeff headed "Two Clients':

...based on the information I got from what I consider the Horses mouth(s) at this summers Appraisal Institute conference, I was told (ommitted)...

SO Per my notes taken during a class on USPAP and the Appraiser instructors: Danny Wiley (Member Appraisal Standards Board) and Stephanie Coleman (Screening Director Appraisal Institute) on or about 11 am 7/14/2002 Pacific Standard time:

There is NO prohibition from performing an appraisal for two or more different clients on the same property up to and including useing the SAME date of inspection and the reports can or can not have different signatures.

AND what you charge for your services on the second report is entirely up to YOU the appraiser.

The above are both direct quotes, my interpretation of YOUR situation is that you are in fact permitted to perform two appraisals.

[OK folks - I am braced for the inevitable barrage of folks telling me that I am wrong, WRONG, WAY WRONG] But there you have it: I have quoted my sources and time, place and circumstances quite thoroughly.

Richard: I asked about 15 different scenarios, and was more than a little hostile to this information which flys directly counter to everything I have been told before about clients and who owns a report. The gist of the discussion runs that there is NO reason why you cannot perform work for two clients on the same property, and in fact the ONLY way you might be in violation is by telling client B that you did a report for client A.

Given the fact that one of the folks teaching this class is one of those WRITING the rules, and the second is directly responsible for enforcement of those rules, I have to assume that this is straight scoop. I have names and addresses of others who were there such that if challenged I can come up with other witnessses.

 

[Austin]

We were told at a state law class in Virginia a couple of years ago by the then chairman of the state appraisal board the following to paraphrase: An appraiser’s obligation to a client ends when the purpose of the appraisal has been satisfied. For example, if I a do an appraisal on a home for a divorce settlement, then the same date do it for a mortgage loan, then do it to contest the tax assessment, none of these appraisals conflict with each other or affect the client's interest. We were told the purpose of the rule that you have an obligation to a client is to prevent the client’s interest from being compromised such as I have had sellers or buyers call me and say; "I heard you appraised a property at zzz street for Joe Blow. What did you appraise it for?" My reply is that the price estimate is my client’s property bought and paid for and I can’t tell you or anybody else because it would compromise their position, to which they generally reply: “Ok, then I want you to appraise it for me.” The obvious reason being to compromise the interest of client # 1. There are no right and wrong answers anymore. Everything is relative.

 

[Richard Carlsen]

I have a MLS Directors meeting late this afternoon and won't be home till after dinner so I'm going to tell you what I did.

First off, I have to agree entirely with Lee Ann.

Here's what I did.

I accepted the 2055 order. Since I knew where the key was and had permission to enter for the purposes of doing an appraisal, I revisited the subject (new inspection date) took new notes and new photos and completed the report, checking for any new sales during the ensuing week. In the report I noted that the subject was listed for sale and that there reportedly was a p.a. on the property. The report was sent off and the full fee for a 2055 was charged.

My reason for this was that I have not been convinced ever that a lender/client gains any special appraisal rights to a property when they place an order with me. As long as I do not disclose any information gained from my client to any other client, I am convinced that I can do an appraisal for more than one client on the same property without violating any guidelines. That was the reason for saying that the property was "reportedly" under contract of sale. I did know the sales price which came from my client but I had also spoken to the broker who talked about the buyer and sellers. Hence, I knew of the reported p.a. from another source other than my client.

I charged the full fee for the 2055 because there was nothing in my client’s order that would reduce my liability for my work. I do not have any agreements with any of my clients that require me to disclose if I receive orders on properties I have appraised for them and I would not agree to such conditions.

 

[Mike Garrett RAA]

what should you do?.......READ USPAP! I see a definate Confidentiality issue here.