Acting as a Broker.and Appraiser

[Fred Smith]

I have a client that originally requested me to act as his real estate broker in which I was thrilled. Then, after visiting my office, found out that I am also an appraiser. They are interested in me listing their home for sale, but also would like for me to provide them with an appraisal. They basically would like to see the comparables, with adjustments, for fair market value purposes.

I have been upfront with the seller whereas they understand that I wear two hats. Should I provide this client with "Consultation" services, a 2055, old 1004, or ???. I will explain everything within the report in regards to the fact that I am both a broker and appraiser, intended use, scope, etc... How would you handle this situation?

 

[Smokehouse]

I see no problem with it, you have fully dosclosed. You are going to provide an appraisal for market value and at the same time list their home for sale, if anything it will see how accurate your appraisal was.....Would they be happy with a CMA?

 

[Tudor]

I am not sure how you could wear both hats on this one and avoid any trouble. If they want an appraisal then I would refer them to another appraiser, if they want a CMA, then I think you could do that and avoid any future trouble.

 

[Mountain Man]

No no, like you I have two hats... but only wear ONE at a time. They called you as a broker to list their property, so give them a slam bam jam up CMA! I would use a URAR looking grid, like one I made in Excel, and give them a good range of values with the average days on the market for the lower, middle, and upper range. Use your appraisal skills to give your listing client the best info you can, but don't call it an appraisal.

 

[Couch Potato]

I don't think a rational person can honestly claim to provide both services simultaneously. As a broker, you are required to work in accordance with your clients best interest. As an appraiser, you are require to work without regard to the interests of anyone. Those are mutually exclusive requirements, IMHO.

 

[Don Clark]

No no, like you I have two hats... but only wear ONE at a time. They called you as a broker to list their property, so give them a slam bam jam up CMA! I would use a URAR looking grid, like one I made in Excel, and give them a good range of values with the average days on the market for the lower, middle, and upper range. Use your appraisal skills to give your listing client the best info you can, but don't call it an appraisal.

Good advice. USPAP does not specifically prohibit what you have proposed to do, with full disclosure. But, it generally becomes a bag of worms.

 

[Fred Smith]

Which form would you use?

 

[Kevin A. Spellman]

Your opinion of the list price and performance within the market will shine on both of your hats. Provide the service that pays you more. They do not need an appraisal they need a buyer. Hope you get both sides of the transaction without a co-fee. Go for 6-7%

 

[Couch Potato]

Which form would you use?

 

[Fred Smith]

hahaha.......instead of creating an excel template, word doc., couldn't I just use the old 1004 and DISCLOSE? My software has "appraisal" words everywhere in which I can't delete.