Acting as a Broker.and Appraiser

[Couch Potato]

Couch, the part about "In appraisal practice, an appraiser must not perform as an advocate for any party or issue" kind of tells the whole story.

Performing the duties of a broker is not appraisal practice. It is broker practice.

Yes, it is "broker practice" and one cannot do both ethically at the same time. As a broker one is under contract to the client to conduct business in relation to the property in the best interest of that client. One cannot pretend that contract does not exist and do an appraisal on that property. One cannot simultaneously advocate for the client and not be an advocate.

Any attempt at disclosure would merely be a confession of guilt of the violation of one obligation or the other.

 

[JSmith43]

Sybil could handle it

Dual agency is about as confusing as father's day at an orphanage. Many real estate agents take on that position, either accidentally or on purpose.

I think doing an appraisal in conjunction with actively marketing the same property on a contingent fee basis is a bit less confusing, but still confusing.

Maybe we can get a ruling that the two are separate assignments (new assignments):new_smile-l:

 

[Pat Butler]

It is in the client's best inteest to get an honest value. That means that the broker/appraiser can provide an unbiased value regardless of whether a fiduciary relationship exists on the broker side. There's no conflict there.

Nonetheless, the required USPAP certification most definitely allows an appraiser to have an interest in a property while still being unbiased.

 

[JSmith43]

It is in the client's best inteest to get an honest value.

I agree with what I believe to be your intended point, Pat. But, when I read the quoted part, I immediately imagined a happy broker proudly presenting an appraisal on the table next to marketing literature showing appraised value $10,000 over list price

 

[Couch Potato]

It is in the client's best inteest to get an honest value. That means that the broker/appraiser can provide an unbiased value regardless of whether a fiduciary relationship exists on the broker side. There's no conflict there.

Nonetheless, the required USPAP certification most definitely allows an appraiser to have an interest in a property while still being unbiased.

If the client is trying to sell the property, the value that is in their best interest is the value that leads to a contract at highest possible price they can legally convince someone to pay. That will generally not relate directly to "market value" as it is typically defined, or any other typical definition of value. It is certainly not a value an appraiser would give as an opinion without being an advocate for the interests of the seller.

One could argue that such a value would be "listing price" but I don't see such an estimate as being anything other than a function of being an agent. To try to charge an extra fee for such a service by claiming it is an appraisal would be dubious at best, IMHO.

 

[Pat Butler]

You're bringing up two separate issues. The first is the type of value. I would agree the a market value appraisal isn't the most appropriate type of value for a seller. Something more similar to anticipated sales price would be more appropriate.

But the seller's desire for the highest price needn't affect the appraisal. I can provide an unbiased appraisal to a seller even though that seller has a desire to get more than whatever value I developed. It IS in the seller's best interest to have an unbiased value even though they desire something different. And there is nothing wrong with providing whatever value for an appraisal, then attempting to get more than that during the listing process. The one goal (appraisal) shows an unbiased value that is most likely to facilitate a sale, while the other goal (a sale) is something that the seller may attempt to get 'lucky' by getting a higher sales price.

 

[Bama Bayou]

Couch is correct. You cannot perform the duties of an appraiser and broker at the same time on the same property, at least not ethically. Two completely different jobs.

However, there is no problem for an appraiser to perform the duties of a broker.

Over the years I have acted as a buyer's agent for a number of homebuyers. I just did not do any appraisal work for them.

 

[Pat Butler]

How in the world did you act as a buyer's broker yet never talk about house values? As soon as you would have, you were indeed also acting as an appraiser.

 

[Bama Bayou]

I did not perform appraisal services, I performed broker services.

 

[Pat Butler]

Not so fast How did you comply with your fiduciary relationship with your buyer by not discussing values of the houses they were looking at. No way did you comply with your fiduciary if you let them place an offer on a house without advising them of what the property may be worth.