Appraisal On Form 1004 For 'individual Client'

[Tom4value]

The scope of work is to appraise a property so the client will know how much his house is worth. Why has no one suggested providing a narrative report? Do your work as required by USPAP and provide him a narrative report that tells him what he wants to know with enough certifications/disclosures and you are done.

 

[CindyR]

What if someone wants to use Quality Ratings (Q1, Q2 ...Q6) and Condition Ratings (C1, C2 ...C6) in GP Form. Are these 'Alphanumeric Quality and Condition Ratings' also proprietary

Actually, i often use the q and c ratings in private party appraisals IF i think they will make the report clearer to the intended user. if the report is a prelisting appraisal intended for realtor folks i use the terminology they are used to seeing but expand on it a bit. For example, "Q4 Average" or "C3 Average". Also did one recently for a mortgage broker friend who wanted a prelisting appraisal for her parents. I knew she would understand those Qs and Cs so i included them. For your standard private party folks, no, i would not include Qs and Cs.

 

[residentialguy]

Using UAD puts one at further risk of misleading, imo. That's a FNMA program and I'd never use it for personal use. Yeah folks, just ignore that it looks identical to mortgage use for GSEs, lol
...not to mention that the descriptions suck eggs.

 

[Peter LeQuire]

Using the Q and C ratings makes sense - a least on one level (or maybe two): it's very easy to copy the ratings' descriptions into a report so that a user can have a (at least) some idea of what the labels attempt to describe; which can help communicate the reason for any adjustments made for these attributes. Of course, the same could be said for a summary of some other source's ratings (M&S, for example) (though any published source would probably have their ratings' descriptions copyrighted).

 

[Tumbuktu]

The Intended Use is pretty standard on 1004, " ..... Use in Mortgage Finance Transaction ...." for normal lender oriented appraisals.

In current scenario, client is purchasing the property on cash and there is a contract on the property.

I asked client why he wants the appraisal or what he intends to do with it. He said " I just want to know the Market Value of the Property". He does not (or does not want to tell me) if he is going to use it for making the purchase decision.

In Valuation Process, Problem Identification sequence is: 1. Identify the Client.. 2.Identify the Intended Use... 3.Identify the Purpose or type of Value .......

Intended use in this case as per communication with the client " ... Client wants to know the Market Value..." which is also the Purpose of the Assignment

Can the 'Intended Use' be same as the 'Purpose of Assignment' or client needs to be told (whether he agrees or not) that "Since there is a contract on the property, so you want to know the 'Market Value' so as to be able to make the purchase decision. So, you intend to use the market value (hence the appraisal) for "...Evaluation for Purchase.." or ".... help make purchase decision......" , so this is the intended use. The client may actually be true to his words and not use the appraisal at all in making a decision and still go ahead with the purchase, even if it appraises significantly less than the contract.

 

[bnmappraisal]

"The intended use of this report is to ascertain an opinion of market value for potential purchase of the subject" (Edit: feel free to use if you'd like)

I use this for many of my cash buyer reports who "just want to know the market value"

 

[bnmappraisal]

The client may actually be true to his words and not use the appraisal at all in making a decision and still go ahead with the purchase, even if it appraises significantly less than the contract.

Very true. Client may "just love the subject" and still buy it, even if our opinion is lower than contract. That is not our concern. Our job is to give them an unbiased, objective, independent opinion of MV so they can decide what they would like to do. I often break it down for them this way. We provide the information/data (appraisal) for them to make a better informed decision.

 

[Tumbuktu]

for potential purchase of the subject

My question/dilemma was regarding this part. Circumstantial Evidence (Contract, MLS Listing etc.) suggest that this is what client intends to do. But in verbal communication, he just restricts himself to market value, does not say or admits that he is going to use it for potential purchase. So the Intended Use "ascertain an opinion of market value" is pretty much same as the Purpose.

 

[bnmappraisal]

I think you may be overthinking it a bit.

I understand and have clients say the same thing "I just want to know what it's worth" Again I respond with something like "Well, my job is to let you know that so you can decide what to do. To be frank, it doesn't matter to me if you buy it, walk away, rent it or whatever. My job is to give you my opinion (based on the available data) to make a decision."

If the client contacted me saying they "want to know the market value of ..." that, to me, IMO< is for a potential purchase. That's the intended use - I think the key word is "Intended" - doesn't mean they HAVE to use it for that

 

[chad hampton]

My software provided has "non-lender" forms. Basically the same form as the URAR, but they don't use the word borrower. And you can go back to average/good, etc. That way the report makes sense to a human being.