A Question to Stir Up a Little Discussion

[Blue1]

Richard,

How were your pictures and notes "new?" Would they be significantly different from the original notes and pictures you took 3 days earlier? Aren't you really giving the same information to client B that you already gave to client A and wouldn't that be a violation of the ethics provision? Regarding the contract, shouldn't you have requested a copy of the actual contract? Details of the contract should be reported........If the contract was refused to you then you could state so in the body of the report but, if it was available and you didn't request it you are not doing due diligence.

 

[Richard Carlsen]

Mike;

What confidentiality did I use or abuse in the second appraisal that I could not have found in the normal course of doing an appraisal?

Data that is readily available to the public is not confidential. If it is, then a comp can be used one time only. Disclosing to client #2 that I did an appraisal on the same house for the same buyer with a different company is disclosure of confidential information. Calling client #1 and saying that I had received an order from another company for the same house and borrower is disclosure of confidential information.

Of course the photos were new! They were taken on the day that I visited the property for the second time. The field notes were the ones that were taken the day of the second visit. Actually about 2 weeks had passed between the inspections.

The reason I did not request a copy of the contract for client #2 was that the stated purpose of the appraisal in the order was checked "Other". Perhaps the borrower is planning on immediatly refinancing the house after closing. Anyway, the client did not indicate that this was for a purchase consideration. However, in the course of performing the appraisal, I did inform him that the property was currently listed and that there was reported to be a p.a. on the property at this time. The client determines the use of the report; not me.

What I did was perform two separate appraisals that have the ability to stand on their own. Information to which I was privy was not passed to either client, therefby violating my confidentiality trust with that client. Each appraisal was performed with a separate analysis based on the data on the property and the market that I had available. In fact, the values came out slightly different. I attribute this to the accuracy of the URAR vs. the 2055. In both cases, my best indicator of value used was the weighted adjusted sales price of all comps since I did not have a "true" comp.

I think that I can look at each appraisal assignment individually and say that I did an honest job IAW the guidelines and as requested by my clients. I did not give out any confidential information to either client. If the second appraisal had any advantage over the first, it was only that by doing the first, I had gained knowledge about the neighborhood and the market that made for a more knowledgeable analysis for the second. However, this is the same kind of knowledge that can be gained by appraising a cookie-cutter house next door to one you have just done two weeks before: same neighborhood, same location influences, same design, most likely same builder and quality. Guess what?…....Same comps.

I think I did right in filling this order for my client.


(Told you this one would stir up a little discussion.)

 

[bradellis]

Folks,

Two different assignments. We used to have to get the former client's permission. No longer. Our fiduciary responsibility to the first client has been fulfilled.

On to the next.

Brad Ellis, IFA, RAA

 

[Judy Whitehead (Florida)]

I had pretty much the same thing happen to me last week. The difference was that Client #2 knew I had done an appraisal - in fact had the borrower's copy. Client #2 asked me if I could "re-certify" the appraisal, and I told them that to me, "re-certification" meant reinspecting the property, charging a trip fee and charging for any new comps.

I reinspected - they did ask for one newer comp, and low and behold my value (with a newer comp) actually came out a little higher. (This was waterfront property and it is selling like hot cakes now).

Anyway, the mortgage broker was very relieved, as the appraiser she commonly used in her area had told her in the past that "she wasn't allowed to reappraise something within six months." It staggers me that the other appraiser actually used a time limit!

All in all, it is discussions like this that we all learn so much about. And of course in the end, we all have to do what we feel comfortable doing.

 

[Mike Garrett RAA]

My thoughts were more along the line of the contract in appraisal #1. If you related information about the contract it could be violation of confidentiality and if you didn't then you violate USPAP by omitting your knowledge of a known contract. Sticky...isn't it?

 

[Jo Ann Meyer Stratton]

I know that USPAP people are now saying that doing a second appraisal for a different client without written permission from the first is okay. But---I am still concerned with the confidentialty. If the second order is a driveby and the public records or MLS listing has differant information than what the appraiser observed for the first client--the appraiser is disclosing confidential information by using his or she's knowledge from the first order. If the appraiser uses the information from the public source (which is wrong) then the appraiser is preparing a misleading report. Also the preception by the general public, who haven't read the latest version of USPAP, would be a conflict. Not only does USPAP come into play here but also the Gramm-Leach-Bliley Act might be applicable. So regardless of what USPAP says, I will stick with my own comfort level of not doing a second appraisal if there would be any preception by either the owner, seller, buyer, former client, citizen walking down the street that I have violated confidentiality. One fee for one report is not worth the aggravation and future lost business because any of the above preceptions. I have lost and gained clients (the larger number) because of that view point--and I am the final decision maker for my actions. If the subject property or the market has changed between the two orders, I go right ahead with the second order without contacting the first client. But if no change in either one and it is only a few days or weeks between the orders, no second report for a different client. To copy Mike G's saying--so sayeth a very grumpy, grouchy old grandma.

 

[Red Blumenstock]

Lee Ann's recollection is definitely correct and the same response was given to the Instructors at the USPAP Instructor Seminar. Whether or not we believe it or agree with it, it is the ASB current answer that was given by Chairman Danny Wiley.

Red Blumenstock

 

[Farm Gal]

Thnaks for backing me Red!

Hey Granma JoAnne:

I guess if I percieve a CLEAR conflict between clients I would back away. However based on my conversations with Mr. Wiley and Ms. Coleman. the number of assignments in which I might be concerned about conflict have dropped considerably: in fact I cannot envision very many situations in which I WOULD turn down the second assignment. (Divorce with contesting parties is one of the few! and that is more a personal issue than USPAP! :roll: )

I WOULD be very careful about not disclosing any information provided by client "A" which I could not have gotten elsewhere, but after all the wild scenarios that were hashed out in front of (and BY me ) challenging both Mr. Wiley and Ms. Chapman, I am now convinced that the former 'everybody knows' two client issue is NOW a Non-issue :idea:

In Richard's case, pass Go, collect whatever$$, and move on!

Sign me the "Not-grumpy-grandma" :lol: 8)

(and you will note that by posting my notes in a VERY public forum of my peers I have even more witnesses in case of a problem :wink: )