additional comps after appraisal

[Pamela Crowley (Florida)]

The client is asking for new information that was not part of the original appraisal order/assignment/scope of work and was not available at the time of the original appraisal.

New appraisal order/assignment = new appraisal and appraisal report.
Fee is a business decision, but I don't do free appraisals - unless it's for a very good cause that I have determined is a very good cause.

 

[Ken B]

If the effective date of the appraisal is not changed, there is no update.

Market data after the effective date of the appraisal can indicate the accuracy of trend data reported in the appraisal.

If you would be agreeable to provide additional comps that settled before the effective date of the appraisal, what's wrong with providing comps that settled after the effective date of the appraisal.

Technically, an "update" is not required unless the closing date will be later than 4 months subsequent to the effective date of the appraisal.

Anything that has settled in the couple of months since the effective date is likely to have been listed for sale on the effective date. Did you use active listings in the report and consider them in your reconciliation? Would you consider using active listings in your reports?

Are you required to provide the data? I wouldn't think so. Is the client someone from whom you would like to receive future business? There's nothing ethically wrong with satisfying the request, so it's a business decision you need to make.

Now, if someone wants you to change your value opinion due to events that happened after the effective date, uh huh; I would not do that. Unless there was an issue such as you have a declining market and you used dated sales but did not adjust for market change. But nothing like that has ever happened, has it?

 

[Fred]

If the effective date of the appraisal is not changed, there is no update.

What's an update?

 

[timd354]

It seems to me that data that was not available until after the effective date of the appraisal cannot possibly have any bearing on the market value of a property as of the effective date since this data was not known to the market participants as of the effective date of the appraisal, and, thus, could not possibly have had any influence on the value of the subject property as of the effective date of the appraisal. It seems to me that the lender is looking for a free appraisal.

 

[Mike Kennedy]

"Are you required to provide the data? I wouldn't think so. Is the client someone from whom you would like to receive future business? There's nothing ethically wrong with satisfying the request, so it's a business decision you need to make."

See USPAP ADVOCACY

The ONLY reason to request more recent/additional sales to be ADDED to a COMPLETED, 2 month old, appraisal report which closed SUBSEQUENT to the Effective and Signature Dates of the appraisal report (as opposed to addressing discrepancies or adjustment errors on the orig comps) is to influence the F$$O.

"Now, if someone wants you to change your value opinion due to events that happened after the effective date, uh huh; I would not do that."

CORRECT.


Appraisal Completed in November 2007.


** two additional CURRENT comparables which must be gridded in the NOVEMBER appraisal report - request dated FEB 1, 2008.

two properties Listed 12/05, contracted 12/15, sold Jan 25

a. both, truly comparable, sold higher than the original comps. fully demonstrating upward adjustment to the orig comps (various reasons - pair sales supported). Value Opinion increases "as of the same effective date of appraisal" ???


b. same scenario - both supplemental comps sold lower than the original comparables - again truly similar (adjustments to the other comps via paired sales/supported) .... value opinion revised downward as of the EDA?

No Way.
-------------------------------------------------------------------

New Assignment.

 

[Fred]

Richard,
I see where you are coming from, not on the definition, but on amended report.

It is possible to have conducted a larger sales analysis, left it out of the report, and amend the report by appending some or all of the larger analysis. However, the results of the original analysis would have to include what 4th and 5th best comp are. However, if you have to figure out which sale is the 4th best and which is the 5th best, or make any other analysis and decision about which two sales to report because it is not explicit in the part of the assignment results you did not communicate, you are in the process of doing a new analysis that will produce its own new results.

 

[Richard Carlsen]

However, if you have to figure out which sale is the 4th best and which is the 5th best, or make any other analysis and decision about which two sales to report because it is not explicit in the part of the assignment results you did not communicate, you are in the process of doing a new analysis that will produce its own new results.

When the results are reported, are the reported results at all open to correction, modification, amplification, substitution or change so as to put the report in a form that solves the problem and provides a useful product to the client?

 

[Fred]

put the report in a form that solves the problem and provides a useful product to the client?

There is certainly nothing in the current or any former appraisal standards that I know of that would prevent putting things in any "form." At least to some extent, all of them probably encourage the most useful form.

And just to avoid the prior confusion about whether USPAP defines "assignment."
From USPAP: "STANDARD 2 does not dictate the form, format, or style of real property appraisalreports."

When the results are reported, are the reported results at all open to correction, modification, amplification, substitution or change

I would say that after reporting results you can engage in a new assignment involving the same property for the same client and generate more results that
1. address the same question, but are different from the first results (modify, change),
2. replace erroneous results (substitute),
3. create additional results not included with the first (amplify),
etc.

So, in short, I don't see any obstacle in USPAP to answering any legitimate question any cilent has. That said, we do have some obligation to report what the client asked and how we developed an answer. So, if you should happen to develop results for a client (to modify, extend, whatever, old results), you must have executed some scope of work, pursuant to some agreement with the aforementioned client to accept the assignment. That is, if you have new results, you must have had a new assignment.


BTW, have you realized yet that your prior statement is

USPAP does not define Assignment

is not correct?

 

[glenn walker]

going to be a lot of broke unemployed appraisers , most on this site are always upset about fees , the florida appraiser "she" thinks anything after the date of the report is a new assignment , well folks best just hang up those licences , because the big doggs Fannie and Freddie have implemented the nationwide zones level 4 and 5 in Florida and Ca and if the major lenders want a newer comps, you best get of your butt and get them unless of course you are rich and dont need to feed your family , as for me i have no problem as I always get a few extra comps the first time I do the report... keep fighting the man because my business will just get better as the primadonnas go broke, oh by the way I have made it since 1979 bye bye to the appraisers that dont want to help with a few extra comparables to the folks that have paid those nice $15,000 per month incomes over the last 10 years, tuff times are here my friends so buck up and help our friendly banks and mortgage companys or get down to Willie Mart and become a greeter........))

 

[Webbed Feet]

<snip>
If you would be agreeable to provide additional comps that settled before the effective date of the appraisal, what's wrong with providing comps that settled after the effective date of the appraisal. <snip>

Mr. Brown,

A very long time ago my state appraisal board said that any appraiser that uses their expertise to "filter" a selection of comparable, and reported those comparable sale prices to some party, just did a real estate appraisal. Only given that is all they did, one that probably violated USPAP. The topic was comp searches and how they are appraisals.

Please explain to me how a client asking for what amounts to a "comp search" long after the effective date of a prior appraisal with comps closing well after that effective date, is not doing exactly what my board described? An act of providing a new appraisal, on the same property, to the client? Literally, the only difference between a mortgage broker asking for a comp search a few months later on the same property, and the past client doing so... is the prior appraisal exists. Both requests, and acts, constitute a new appraisal being done.

Only just reporting new sales to them is going to violate USPAP in the process, just like a "comp search" with no signed certifications, no identified SOW, no statement of H&BU, and on and on.

Webbed.