additional comps after appraisal

[appauled]

I have a client requesting 2 additional comparables that have closed within the last 90 days..my appraisal date is nov/2007 and they want comps after that date, this doesnt make sense to me why would i give comps after my appraisal date.. it sound like to me that they are looking for an appraisal update, when i gave them my opinion to order an update, they said no all they want is two additional comps, and i told them i cant give them any comps after the date of my appraisal, i can give them comps prior to my appraisal date.

Can anybody give me any advice to see if im right or wrong.

also

i have another issue i did an appraisal where i marked decline, and the lenders wants to know why no time adj was completed. but my issue is that based on my sales used. i see no reason to, being that my lowest sale sold in august and my highest sold in october therefore bracketing it as stable and if anything increasing based on the trends of the comparables. however i marked declining based on current listing which are showing listings ranging from 290 to 385k and very similar properties are around 325 to 368k my appraised value was 364k. but if you would consider the list to price ratio where its some where around 5-6% of listing price they would be below my appraised value. so i want to know if i should do a time adjustment. decling rate is 1.5-2%.

335k 08/2007
360k 08/2007
371k 10/2007
364k 06/2007
364k 09/2007

 

[Richard Carlsen]

I would not hesitate to add a sale that was post effective date of up to 1 month but on a report from last November, I don't think I would go beyond the 30 days. Sales that take place within 30 days usually came under contract very near the effective date of the report and are therefore were susceptible to the very same market influences that the subject would be under at that time. Sales closing up to 30 days after the effective date are in reality, some of the best indicators of value available.

What has most likely happened is that the appraisal was reviewed at funding or for sale to the secondary market and a stipulation was placed on the report. If you do not have sales that took place within 30 days, I would suggest that you consider recommending an Update to the report. Of course, if the market is declining, your value may come in lower and they don't want that.

As to making an adjustment for a declining market, that is not a requirement. And the notation on page 1 of a declining market applies to the greater market and not to your comps specifically. I work in a market where the limited number of sales and the lack of resales makes determining a percentage nearly impossible for a grid adjustment. Knowing that the market is in an over-supply condition with obvious declining values, I consider that in the reconciliation by stating that the opinion of value is influenced down from the weighted adjusted sales price of all comps due to over-supply and lower market activity. I've never had an UW request that I give a specific percentage in the grid. And I would not because I cannot.

 

[CANative]

Richard... sometimes I think you go too far in trying to provide "excellent customer service."

 

[Pamela Crowley (Florida)]

Sales AFTER the fact on an appraisal over a week old, is called a NEW APPRAISAL ASSIGNMENT.

 

[Webbed Feet]

<snip> Can anybody give me any advice to see if im right or wrong.

Appauled,

You are absolutely correct. They are asking you for your expertise in picking out comps and report the sales prices to them. That my friend is a request for an "Update" that is a new assignment. They are trying to screw you out of additional fees they should be paying.

also

i have another issue i did an appraisal where i marked decline, and the lenders wants to know why no time adj was completed. but my issue is that based on my sales used. i see no reason to, being that my lowest sale sold in august and my highest sold in october therefore bracketing it as stable and if anything increasing based on the trends of the comparables. however i marked declining based on current listing which are showing listings ranging from 290 to 385k and very similar properties are around 325 to 368k my appraised value was 364k. but if you would consider the list to price ratio where its some where around 5-6% of listing price they would be below my appraised value. so i want to know if i should do a time adjustment. decling rate is 1.5-2%.

335k 08/2007
360k 08/2007
371k 10/2007
364k 06/2007
364k 09/2007

LOL.. you made my head hurt trying to read your above! Caveman says "What!!!???"

Look, in any substantially increasing or decreasing market, if the pending contract dates of comparable used are beyond a very recent date, you should be using time adjustments based on the pending dates. Not the close of escrow dates. This takes some decision making depending on the rate of change versus the amount of time having passed to decide if a credible analysis requires the adjustments. Either become confident in your market analysis answer regarding declining or increasing, and thereby make the darn time adjustments like you should be doing.... or stop taking assignments until after you can figure out what the market is doing! Relying on a historical ratio in the middle of a changing market may not be the best move.

errr, and work on that written market explanation for a few days huh? Reading addendum statements over five times or more just is something other people should not have to do.

Webbed.

 

[Virgil Brown]

If you think that the extra comps are not a valid request, we stop them by charging them extra for the service. $75 to 125 depending on how far we have to go, be nice in your explanation.

 

[Richard Carlsen]

Sales AFTER the fact on an appraisal over a week old, is called a NEW APPRAISAL ASSIGNMENT.

Pam;

Where does it say that? Or is this just a personal business policy?

 

[Fred]

Pam;
Where does it say that?

I'd say in USPAP. She is using the USPAP term, "assignment;" kind of clue.

Sales AFTER the fact on an appraisal over a week old, is called a NEW APPRAISAL ASSIGNMENT.

I am not sure the week or that the sale is subsequent to the effective date are determining factors. Based on the USPAP defintion of an assignment as something that starts with an agreement and ends with a result, it would seem that any agreement for appraisal services creates a scope of work (research and/or analysis) and produces results is an assignment, regardless of the fact that you may have appraised the same property before.

If they asked what comps you would have or could have used and in what ranking for an effective date 10 years ago, it would not be any less a "new assignment." A comp check is a comp check, and a comp check is an appraisal.

 

[Colleague]

Sales AFTER the fact on an appraisal over a week old, is called a NEW APPRAISAL ASSIGNMENT.

Yes it is and I would charge them a new fee too.

 

[Richard Carlsen]

Based on the USPAP definition of an assignment as something that starts with a request and ends with a result, it would seem that any request that requires appraisal research and/or analysis is a new assignment.

USPAP does not define Assignment. It does define Assignment Results as follows:

ASSIGNMENT RESULTS: an appraiser’s opinions and conclusions developed specific to an assignment.
Comment: Assignment results include an appraiser’s:

1. opinions or conclusions developed in an appraisal assignment, such as value;
   opinions of adequacy, relevancy, or reasonableness developed in an appraisal review assignment; or
   opinions, conclusions, or recommendations developed in an appraisal consulting assignment.
   

USPAP does define Report as follows:

REPORT: any communication, written or oral, of an appraisal, appraisal review, or appraisal consulting service that is transmitted to the client upon completion of an assignment.

Since the report is submitted at the completion of the assignment, the determination of when the assignment is completed is the authors. Therefore, it is perfectly permitted within USPAP to revisit a report to add additional information or make corrections or even to make changes after it is completed without being considered a new assignment. Such things as correcting legal descriptions, changing owners of record or even adding a new comp is at the discretion of the appraiser. Once the appraiser has satisfied himself that the report is completed, he may refuse to make any more changes and may require any additional items to be considered an Update.

Submission of a report to a client does not mean that the report cannot be reopened, changed or even reconsidered. Signing a report does not stop any modification to a report if the author so chooses as long as the Intended Use and the Intended User along with the other terms of the assignment are not changed. After all, USPAP does not require a signature on anything but the certifications.

I know, some of you are going to scream and holler. Go right ahead but think about what you are doing. You are saying that this report of yours is sealed forever once it is signed and submitted, forever to be the basis for your opinion of value and the justification of that value. And I am saying that the report I submit is not complete until I say it is complete which to my mind is where the reader has a report that fulfills in his mind the assignment and one that he understands.

Let the wailing and gnashing of teeth begin.