Acting as a Broker.and Appraiser

[hglenbetts]

Two hats here too

I have provided CMA's (Real Estate Market Evaluations) with the bold print diclaimer: Altough this Realtor is also a Licensed Real estate Appraiser in the State of Michigan (insert license #) THIS IS NOT AN APPRAISAL.

I have also provided URAR appraisals when requested and paid for, by listing prospects, explaining that the file is not transferable to another party (lender) and that I can not provide a lender with an appraisal on this property as long as I have the potential for monitary gain through the sale (commission).:new_argue:

Comment??

 

[Couch Potato]

You are wrong.

Are you guys kidding me????

This is a no brainer and NOBODY has gotten it right YET.

He said the property owners found out he was an appraiser and wanted to see comps and whatever....ie...they KNEW he was an appraiser and are now interested in his professional opinion. That makes it an appraisal. And he also has PROSPECTIVE INTEREST in the property...ie...he's trying to negotiate a listing contract!!!

CLEAR USPAP VILOATION....

This "two hats" crap is just that....crap.

Come on folks....get real. It's not hard....READ the friggin rule book!


todd


edit to add...in NC if you are a certified appraiser then any value you give is subject to USPAP....no gray area. If you also hold a realtors/brokers license that makes no difference - in other word - you cannot provide a CMA if you are an appraiser.

This is simply not true William.

57A .0501 Appraisal Standards
Every registered trainee, and licensed and certified real estate appraiser shall, in performing the acts and services of a registered trainee, or licensed or certified real estate appraiser, comply with the following provisions of the "Uniform Standards of Professional Appraisal Practice" promulgated by the Appraisal Standards Board of the Appraisal Foundation: Definitions, Preamble, Ethics Rule, Competency Rule, Scope of Work Rule, Jurisdictional Exception Rule, Statements on Appraisal Standards, and Standards Rules 1, 2 and 3, all of which are hereby incorporated by reference. This incorporation by reference includes subsequent amendments and editions of those provisions.

A broker doing a CMA to estimate a list price in an effort secure a listing or help a client understand the market is not performing the acts and services of an appraiser, they are performing the services of an agent. It is important to be clear that one is not performing an appraisal, and written documentation of such issues should be right there with the "Working with agents" disclosure form.

Trying to do both types of service in a single transaction is about the dumbest thing a person can do. There is a strong likelihood of losing both licenses off the one transaction.

 

[TXCBoy36]

I agree!

Are you guys kidding me????

This is a no brainer and NOBODY has gotten it right YET.

He said the property owners found out he was an appraiser and wanted to see comps and whatever....ie...they KNEW he was an appraiser and are now interested in his professional opinion. That makes it an appraisal. And he also has PROSPECTIVE INTEREST in the property...ie...he's trying to negotiate a listing contract!!!

CLEAR USPAP VILOATION....

This "two hats" crap is just that....crap.

Come on folks....get real. It's not hard....READ the friggin rule book!


todd


edit to add...in NC if you are a certified appraiser then any value you give is subject to USPAP....no gray area. If you also hold a realtors/brokers license that makes no difference - in other word - you cannot provide a CMA if you are an appraiser.

I do not believe that you can represent yourself as a broker and an appraiser on the same deal. If they want you to list the property, then do so as a Broker....If you supply them with comps including adjustments and reach an opinion of value, then that is an appraisal and clearly a USPAP violation. I would not go any further than to list the property as any other broker would do.

Be careful, you could cause some problems for yourself...especially with how things are know adays.

JC

 

[Mountain Man]

There's so damn much misinformation on this forum. m2:

 

[Webbed Feet]

I have provided CMA's (Real Estate Market Evaluations) with the bold print diclaimer: Altough this Realtor is also a Licensed Real estate Appraiser in the State of Michigan (insert license #) THIS IS NOT AN APPRAISAL.

I have also provided URAR appraisals when requested and paid for, by listing prospects, explaining that the file is not transferable to another party (lender) and that I can not provide a lender with an appraisal on this property as long as I have the potential for monitary gain through the sale (commission).:new_argue:

Comment??

Mr. Betts,

I don't see any really clear answers for you. Question for you. A long time ago, many lenders and banks came out with what amounted to "comp search" forms and asked appraisers to use and report on them for $75. The forms had a type of market grid, and asked the appraiser to select three comps, adjust them somewhat, and make a conclusion of value. However, at the bottom of the form it clearly said "THIS IS NOT AN APPRAISAL." Tell me, what do you believe the state appraisal boards said completeing the form was?

Next, why are you volunteering that you are an appraiser? I feel regardless of your supposed disclaimer your work is not an appraisal, you've confused the issue the moment you bring that up.

Your second paragraph. My answer is, "It depends." You know the phrase, "The devil is in the details", and that is exactly the situation.

Webbed.

 

[Mike Garrett RAA]

Are you guys kidding me????

This is a no brainer and NOBODY has gotten it right YET.

He said the property owners found out he was an appraiser and wanted to see comps and whatever....ie...they KNEW he was an appraiser and are now interested in his professional opinion. That makes it an appraisal. And he also has PROSPECTIVE INTEREST in the property...ie...he's trying to negotiate a listing contract!!!

CLEAR USPAP VILOATION....

This "two hats" crap is just that....crap.

Come on folks....get real. It's not hard....READ the friggin rule book!


todd


edit to add...in NC if you are a certified appraiser then any value you give is subject to USPAP....no gray area. If you also hold a realtors/brokers license that makes no difference - in other word - you cannot provide a CMA if you are an appraiser.

I beg to differ with you. Many appraisers are real estate brokers and many to get involved in both ends of the business. The wearing two hats comes directly from the USPAP classes, both 7 and 15 classes.

As a real estate broker, I provide "pricing" information to my client for listing purposes. I also make it perfectly clear it is not an appraisal but rather a Broker's Price Opinion or a Comparative Market Analysis. The fact that I am a licensed appraiser only enhances my ability to perform those functions.

What I see as more of a problem is the situation where you are doing an appraisal assignment and then the home owner finds out you are a real estate broker and wants you to list the property. Those I immediately decline.

 

[Mountain Man]

Well there you go... we've now got 2 USPAP INSTRUCTORS, and several long time broker/appraisers who have chimed in with the correct answer.

 

[William Rightsell]

Please allow me to clarify slightly.

I wish to clarify what I posted earlier.

I still stand behind what I said; however, I may have phrased it better.

I meant ON THE SAME TRANSACTION, you cannot wear both hats. Once the client knows you are an appraiser and wants his home valued it is an apraisal, and subject to USPAP.

In the case of BPO's - if an appraiser is also a REALTOR and is asked to do a BPO or develop a list price, then he can legally do so. And I admit, this probably happens a lot. The key is that the client contacted you as a REALTOR. Once they become aware that you are an appraiser and ask for a value, USPAP applies and you cannot provide both services and still be in compliance.

Sorry for the confusion I might have caused.

todd

 

[hglenbetts]

Mr. Betts,

I don't see any really clear answers for you. Question for you. A long time ago, many lenders and banks came out with what amounted to "comp search" forms and asked appraisers to use and report on them for $75. The forms had a type of market grid, and asked the appraiser to select three comps, adjust them somewhat, and make a conclusion of value. However, at the bottom of the form it clearly said "THIS IS NOT AN APPRAISAL." Tell me, what do you believe the state appraisal boards said completeing the form was?

Next, why are you volunteering that you are an appraiser? I feel regardless of your supposed disclaimer your work is not an appraisal, you've confused the issue the moment you bring that up.


Webbed.

First question: I would think that if they the Appraiser specifically, for a value or market opinion, clearly it's an appraisal. If you approach a Realtor for a CMA or BPO (for the purpose of a potential list price) it's not an appraisal. (my opinion... Hopefully it's correct)

Second question: Every time I perform a CMA in my real estate practice, I disclose that I am an appraiser and "it ain't an appraisal" because I am well known with in the community I live and work, and want people to understand the service they are asking for and the service I am providing. Even though as a Broker, I am allowed to perform CMA's for non listing purposes in Michigan, I decline. If it isn't for a potential listing or a buyer client, they pay for an appraisal.

I have always striven to conduct business (former small business owner, real estate broker, appraiser) within the highest possible standards of morals and ethics.

I've got a lot of respect for the people I'm "meeting" in this forum and look forward to your comments on my thoughts and answers to my questions regarding files. I really had no mentor, and my "supervisor" has fallen way short in face to face training. I have learned from her, but know I've missed a lot.

 

[Webbed Feet]

To All,

The real problem I see going on in this thread, is not enough people are calling their own appraisal boards with these specific questions in order to get answers from their board.

A few too many are taking USPAP language in a literal sense from only one view of the situation. Here are some Webbed facts, like em or not.

1) A CMA or BPO are both by definition real estate appraisals. This is directly why my state of Oregon many years ago had to grant real estate brokers and agents an exemption under the appraisal administrative code for allowing them to do either of them for purposes of obtaining a listing or marketing real estate. So saying "this is not an appraisal," on one has little to no meaning. An appraisal is an opinion of value. They both provide an opinion of value. Today, if I am not mistaken, the exemption is no longer needed due to the real estate agency flexing their muscle. But that is all a bit confusing. It's tough to stay up on the latest in inter-agency wars.

2) Yes, it would be best to not mention you are a licensed appraiser. No knowledge would mean no expectation from a seller or buyer. But once the cat is out of the bag, there is no reason to run away screaming. The situation can still be appropriately handled.

3) I think some are taking that "no prospective interest" in the subject property a bridge too far. As a broker, if I am not interested in purchasing the property myself, just interested in representing a seller does not mean I have a prospective interest in the real estate. The contract is for my assistance in aiding them in marketing the real estate. Obtaining the best possible price for a seller is consistent with that representation and ethics as a real estate broker. It is not a self-serving act to opine market value in the process of that service. To opine value in the process of representation is not the problem. It would be a problem to then use that opinion as a factor to influence the seller when offering to purchase the property yourself. Now we have a prospective interest in the real estate.

4) If a seller knows you are an appraiser, and approaches you asking for that hat, then service becomes more complicated in we must comply with USPAP from that moment on if an opinion of value is involved.

The mine field of real estate agency rules, appraisal board rules, and possible perception due to lack of due diligence in heading inappropriate perceptions off at the pass is troublesome. But I don't believe it is quite the nightmare some on the forum are making it out to be.

Webbed.