"ARV" and As-Is Value in 1004UAD, How to Properly Support Secondary Value Opinion?

[Tom D]

you can write a number on a napkin & it is called an appraisal. you can state the 'as is' number on a line that is easily found , if that is how they want it. but you need everything in your work file to support how you arrived 'at is'. now the amount you put in your work file is what you feel safe with. and yes, they try to get away with a one fee pays for 2 values. if you aren't actually doing too much work for the 'as is', i would discount it. that is my business decision, but you need to get paid for the 'non free' work they are wanting for free.

 

[alebrewer]

I know it says they do not need the 'as is' comps gridded in the report, but I'd recommend doing so. No one will have access to your workfile except your state and/or a peer review board (if you're a member of a professional organization). I believe most appraisal softwares have 'extra' grid addenda that you could use for this purpose. I personally don't like providing two different values in the same report, but it's not a USPAP violation.

 

[NJAPRAZE]

Sounds to me like you fully understand the problem and are asking opinions regarding compliance with USPAP under specific assignment conditions. I find the competency comments to be offbase, at best. You could create a second report and complete the "as is" value in that, then copy the grid to your addendum in the as repaired report, with appropriate commentary. Or, less, although the critical issue is to do the work and at a minimum have it in your workfile.

while a good idea-- hard money clients typically want one report

 

[Dublin ohio]

I have a couple of clients that requests these quite often. I have done a few. I usually do the "as is" value as a short narrative addendum. No grid. You can use a grid. But make sure it is a generic non uad grid. Do not use the 1004 additional sales grid. It will appear to uad as comps 4,5 & 6 for the as repaired value. The as is value is for their internal purposes. The as repaired value is for the loan purposes. (at least that how they explained it to me). I have found nothing nefarious about these orders and this type "program" is offered by quite a few different lenders. They can be a pita and time consuming. So charge accordingly. Just got a request the other day to quote on one. A rural property I just happened to do a refi appraisal on a few months ago and at the time of the appraisal. The borrower mentioned that they were considering remodeling and expanding the house in the near future. This request came from a different client.. My omv was about 300k. They are proposing 272k in remodeling and additions. Might come in around 525K "as repaired". Actually a good return. Haven't decided to bid or not.

 

[NJAPRAZE]

I know it says they do not need the 'as is' comps gridded in the report, but I'd recommend doing so. No one will have access to your workfile except your state and/or a peer review board (if you're a member of a professional organization). I believe most appraisal softwares have 'extra' grid addenda that you could use for this purpose. I personally don't like providing two different values in the same report, but it's not a USPAP violation.

exactly; I prefer to put 2nd grid in rpt so they can clearly see how developed, explained etc; otherwise - just "writing in" value -- opens up to questioning "how developed / supported" etc

 

[TerryRohrer]

while a good idea-- hard money clients typically want one report

The notion of the second "file" was simply as a suggestion as the easiest way to create a second sales comparison grid (as opposed to an alternative in Excel or whatever) from which to copy the grid to insert into the one report that would be delivered to the client.

 

[DWiley]

exactly; I prefer to put 2nd grid in rpt so they can clearly see how developed, explained etc; otherwise - just "writing in" value -- opens up to questioning "how developed / supported" etc

That is not only best practice, it is the safest ground with regard to USPAP. One labeled as an Appraisal Report that means the support for the value MUST be in the report; it is not enough to have it only in the workfile.

I like the suggestion of creating a second report with its own grid and copying that grid into the "main" report

 

[RACO]

Thanks a lot guys, everyone seems to be giving excellent advice and thanks J Grant and TerryRohrer for the encouragement. Having not dealt directly with clients and receiving mostly non-complex assignments in the past it's been a bit discouraging to find out how much I don't know now that I am on my own. I did tell the client that I had not previously given 2 value opinions in the same report and may not be competent to do so correctly so we will see if they want the job reassigned, but if not I will put all of your advice to good use. Thanks!

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[RACO]

Update: The client didn't balk at my competency disclosure so I will be doing the report with your suggestions. Thanks for all of your advice.

 

[NJAPRAZE]

Update: The client didn't balk at my competency disclosure so I will be doing the report with your suggestions. Thanks for all of your advice.

Good luck. Make sure you charge appropriately... for "2 appraisals in one report"