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Appraisers offering AVM to clients for a fee ?

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Ray Miller

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Elite Member
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Feb 20, 2002
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Licensed Appraiser
State
Wisconsin
Appraisers offering AVMs for $25 a pop.

Under USPAP should an appraiser have a complete work file and should the AVM be in line with USPAP? What do you feel the scope of work would be? Is this a product we can all offer and not worry about USPAP? If not what can be done about this type of thing???

Go fetch


United Real Estate Corporation AVM
 

Mr Rex

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Certified Residential Appraiser
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North Carolina
Ray its covered in Advisory Opinion 18.
 

TJSum

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Professional Status
Certified Residential Appraiser
State
Maryland
What about the liability? It seems to me the biggest drawback of AVM's for the lenders is that they have no one else to blame if the sh*t hits the fan. But if an appraiser provides an AVM, would they hold the same liability as with their other appraisal services ???
 

leelansford

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Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I can't for the life of me understand why a lender would have to turn to an appraiser to purchase an AVM!

There are an abundance of AVMs (and certainly not limited to the common AVMs that are frequently mentioned in the AF) available to potential users (and, frankly, should be known to these users of such a service).
 

Mike McCool

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Apr 6, 2005
Professional Status
Licensed Appraiser
State
California
To me it would be a lot easier to offer an AVM on your website as an affiliate and just take the commission cut.
 

Mr Rex

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Certified Residential Appraiser
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North Carolina
That would probably be a question for your E&O. Heres an illustration from AO-18:

Illustrations (AO-18)

1(a). Staff Appraiser D, who has access to market databases, is asked to use an AVM to process information. When Appraiser D runs the AVM, she has done no other appraisal research. Appraiser D does not apply any of her appraisal knowledge or judgment in operating the AVM. Appraiser D has entered only property characteristics provided by the client and does not know how the AVM analyzes the data. Is the AVM output an appraisal?

No. The AVM output by itself is not an appraisal. Appraiser D did not apply her appraisal knowledge, judgment, or expertise, nor did she represent that the output was her own opinion of value.
Appraiser D must be very careful in communicating the AVM output to ensure that there is no misunderstanding as to her role in operating the AVM or communicating its output. For example, Appraiser D should:
    1. not communicate her opinions or conclusions as an appraiser regarding the credibility or reliability of the AVM’s output;
    2. not provide an appraiser’s certification or statement of limiting conditions in connection with the AVM’s output; and
    3. ensure that her role as only an AVM operator is clearly indicated if her signature or other identification mark appears on documents used to communicate the AVM’s output.
 

Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Ray its covered in Advisory Opinion 18.


Yep, just re-read it. then read the Ethics section again.

So it appears it is ok. I would worry that the buyer of such service might think that because they used it through an appraiser. It would be considered an appraiser.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
What does it truly mean to "run" an AVM ?
What are some of the basic, typical and common elements that comprise an AVM ?
Isn't a CMA also a variety of an AVM ?
Isn't a detailed market data "trend" analysis also an AVM ?
What is Step #1 for doing, or running, an AVM ?

Do AVM's require any acknowledgment of the personal name of the individual who "ran" and delivered that product ?
Do AVM's require any sort of signed certification ?
Can ANYone ever be told that they "ran" an AVM incorrectly ?
Can the user of an AVM apply the reported information toward a certain business decision.....then learn at a future date that the decision made FROM that information has "failed".....and thus sue the provider (a.k.a. "runner") of that AVM ?
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
"I can't for the life of me understand why a lender would have to turn to an appraiser to purchase an AVM!" (Leelansford)

"I would worry that the buyer of such service might think that because they used it through an appraiser. It would be considered an appraisal." (Ray)

Exactly... These two quotes fit together, based on Rex's post of AO-18, I would find it hard for an appraiser to market a "valuation service" but at the same time tell the potential users they are not acting as an appraiser.
 
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Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
What does it truly mean to "run" an AVM ? Lots of research.
What are some of the basic, typical and common elements that comprise an AVM ? Lots of sale data.
Isn't a CMA also a variety of an AVM ? I would think so.
Isn't a detailed market data "trend" analysis also an AVM ? I would think so
What is Step #1 for doing, or running, an AVM ? Research

Do AVM's require any acknowledgment of the personal name of the individual who "ran" and delivered that product ? I don't think so
Do AVM's require any sort of signed certification ? Nope
Can ANYone ever be told that they "ran" an AVM incorrectly ? Yes
Can the user of an AVM apply the reported information toward a certain business decision.....then learn at a future date that the decision made FROM that information has "failed".....and thus sue the provider (a.k.a. Yes"runner") of that AVM ?

How do I do?? :new_multi:
 
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