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Appraiser Ignorance

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Jim Bartley

Senior Member
Jan 20, 2002
Professional Status
Certified Residential Appraiser
I thought that title might get your attention.....

Seriously though, it seems some of us do not really understand how our services can be modified to meet client needs. The dreaded "Drive By" appraisal is probably the most common of these. Many appraisers mistakenly believe that anything other than a full interior inspection is inherently wrong and does not meet USPAP standards. Please go the site listed below and download this white paper published by the Appraisal Institute.


Terrel L. Shields

Elite Member
Gold Supporting Member
May 2, 2002
Professional Status
Certified General Appraiser
I am not worried about how exterior only inspections fit USPAP, so much as how they fit COURT. As Don Clark has pointed out, a good wordsmith can create a Scope of Work statement that pretty much would eliminate the need for any departure, perhaps much work at all.

THe rub is that the USPAP requirement that the report not be misleading still applies. If the report comes back to haunt you, the courts have tended to take a dim view. For instance,

Jim Walters home are often sit on site and finished to 90%, with owner finishing the rest. TYPICALLY, that interior finish is subpar and FREQUENTLY, not even done. I have been in dozens of these types homes where the fit and finish is awful and 3 where people moved in and lived in them as is. Do you really wanna "driveby" without someone who has been there telling you what the interior looks like? So you appraise it for $70,000. People try to sell only to find it is worth $35,000, default then go to court suing the bank and the appraiser for duping them into buying a house. The banker claims he too is a victim of your inept appraisal, so now what? Do you really think you can explain to a judge how you did it by the book with a really good scope of work which limits your liability for things you are not in control of?

I would suspect that you would be lucky to find a sympathetic judge. Most judges would say you at a minimum must have enough information to develop a reasonable estimate. Missing by 100% is not reasonable regardless what the Scope of work was. Further, you are going to have to correspond with the client quite clearly what that scope is beforehand. Otherwise, it will appear you took on the responsibility of limiting (not in the sense of departure) the scope of the work all on your own. I find darn few appraisers who exchange letters of engagement with lenders. And even fewer who explicitly state what their scope of work will be.
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