ASB Votes for Three Years Sales History

[Tim Hicks (Texas)]

Speaking from a non-disclosure state, I embrace it. I have heard many loan officers tell a buyer to do the 3% FHA loan and wait a year and they can refi, get an appraisal showing 20% equity, probably get them a lower rate and PMI. Meanwhile, they get double commission. Then, when the property has not risen 20% in value they shop for the "better" appraiser who can get that value. Oh, sure there are going to be instances where we have no clue that a property has some sales history, but we already have that. We are not prosecuted for not having information that we have no viable access because we are in a non-disclosure state. The few times it has been brought to my attention that a property I had appraised had a history I did not know about, they allowed me to correct it. There is nothing like the comment, "the subject property was purchased for an undisclosed amount on xx/xx/xx." to make you feel good about your report. The part I like is the fact that it will be harder for appraisers to say a property is worth $200,000 three years after they purchased it for $100,000 in a tract home addition that has a top sale of $160,000 now.

Once again, these rules would not be necessary if our profession was not so corruptable. Instead of improving our profession, lets whine about it.

Tim in Texas
(Who only posts to ===== and whine)

 

[TC]

What is the big deal? I always research the subject and the comps, adds maybe 2 minutes on to the appraisal process. A non-issue.

TC

 

[Ben Vukicevich SRA]

Tim,

I'm not whining. It's just plain stupid.

You said "The few times it has been brought to my attention that a property I had appraised had a history I did not know about, they allowed me to correct it." Did that correction have any bearing on your final opinion of value?????

So you were capable of issuing a credible appraisal/value without prior knowledge of the subject's sale price????? Damn, you seem to know your stuff without any help from the ASB, huh? My hat's off to you...because you're an appraiser. The people they wrote the new rule for are the lost sheep.

Ben

 

[Farm Gal]

...you're an appraiser. The people they wrote the new rule for are the lost sheep.Ben

Ben,
I have to disagree. 8O
The ones for whom that new rule was writ are not lost sheep

It's to cull out the BLACK Sheep :evil:

From my point of view this improves the health of the herd :!:
(sheep and goats and occasional wolves)!

OK now somone is gonna accuse me of prejudice against black sheep :roll:

 

[Tim Hicks (Texas)]

Ben, my remark was not directed toward you at all. I apoligize if you took it that way. My post was mocking other posters who say that the appraisers who post most often on this forum usually are bitching and whining about everything. Once again, my apologies for expecting everyone to realize I was joking.

 

[David C. Johnson]

<span style='color:darkblue'>Doug:

It may be a bit more burdensome than you mentioned, for everyone, because, Guess What? -- Offers to sale, temporary or not, that may never go thru MLS, are part of "Sales History" TOO! They sure are!

I am all for competent appraising and catching the Bad Guys and also the Slack A**ses, but I hope this one is well thought out as being a good tradeoff for increased fees charged to appraisal users. (Of course, Don't mean a damn thing to me, because I generally do it all anyway, partly because it is so easy to do with the information typically gathered before doing the analysis anyway -- regardless whether it is residential or commercial, and also due to going back as far as 10 years anyway.) We want to be responsive to the client and the public by not "breaking the bank," so to speak.

You will be comforted to know that several on the North Carolina Appraisal Board argued very strenuously for this increased provision. I bet they helped force it through whether it was wanted by all or not. Now, that is no concern for us in this particular state because of the years of demonstrated wisdom and fairness of our particular board. We know that this would never be abused by selective enforcement against any appraiser who may be viewed as a "competitive rival" in the market to any of our good board members, and at the same time, be ignored in the cases of themselves or their buddies -- But, Listen up Everyone, how about in your state? Can you say the same thing? Can you be assured that your board is as good as the NCAB?

Just something to think about....

On the other hand, look at all the Major Good News:

As someone wisely alluded to already in this thread: AVMs are now officially Out of Business!! Right?! I mean, how in the world will such appraisal and reporting schemes cost-effectively adhere to this requirement !? And we understand that no regulation would ever be passed that would not be upheld against just part of the "appraisal community," Right? Hell, no! Let's not be silly, please! -- It just could never happen!

You see, there may be some serious wisdom in the Appraisal Regulation World after all. How clever (particularly certain state) enforcers are! This BS that any of this is any type of banker conspiracy to further hinder human appraising -- is just that!! They are all selflessly looking after the good of the country -- And That's Final (no arguments on this point, please) -- not as any silly appraisers may be erroneously concerned.

I say again:

Don't complain. Be happy!

Regards,

David C. Johnson
NC State-Certified General R.E. Appraiser

_______________

PS(es):

Lee Ann:

"Search for prior sale of subject and comparable was limited
to perusal of the county appraisers sale history record.

Done!"

[Hmmmm....] :wink:

[Hey, what's your deal with Black Sheep? Part of the "heard"? Well, hear this -- Are they really that baa baa baa...d?]


Ben:

"More meaningless, non-sense for state boards to discipline
appraisers with. Damn, we have to be the dumbest trade on
earth....... "

[Shame on you -- see my very final line in this post.]


Tim:

"The part I like is the fact that it will be harder for appraisers to
say a property is worth $200,000 three years after they purchased
it for $100,000 in a tract home addition that has a top sale of
$160,000 now."

[Well said -- (no joke this time)]

Tim in Texas

(Who only posts to ===== and whine)"

[Me too, Tim. I like that. Me and you and a few others are getting to be Fine Vintage Stuff !!]</span>

 

[Ben Vukicevich SRA]

Tim,

No offense taken. I was just pointing out that you were totally capable of preparing a credible report without the help of the ASB.

Now for the bad news, you violated USPAP by not reporting that prior sale of the subject. :lol: :lol: :lol: Too bad. Nice report. OK value but turn yourself in..... Now do you see why it's silly/stupid.

Ben

 

[Ben Vukicevich SRA]

David,

Shame on me??? Never. AVM's out of business? Nope. Appraisers being sanctioned by state boards for silly prior sale stuff? Yep. NCAB field day-whoopee.

Let me be really bad and say that I consider the prior sale requirement for one year/three years, whatever, to be counter to the "wisdom" of USPAP to provide an unbiased opinion of value. USPAP is definitely trying to influence my value opinion via this research.

Now, a USPAP one year/three year history on the comparable sales would be meaningful as that is where the subject's value is typically derived on a residential appraisal. But we don't have that via USPAP, yet.

Is it going to stop flipping? Nope. The value is derived by the inappropriate sales analyzed blended with a little fraud. I'm sure any appraiser involved in a flipping scheme would be able to explain a prior subject sale to completely baffle the average loan underwriter-the subject was purchased for $xx,zzz on x/x/xx and has been completely rehabilitated. That wording will do nicely. Do state boards have to worry about this, not really. Because when the appraiser goes to jail, he/she won't be able to renew his/her license. Case solved. Will appraisers who make an innocent mistake for something that has no real bearing on the value opinion be disciplined by state boards, probably.

Man, I can't believe FNMA has more smarts than the ASB. They want three comps first to derive/opine value, then you can analyze the prior sale of the subject as a fourth. Tells you what they rightly think of the prior sale of the subject. Not really applicable. That was then. This is now.

Nope. It's still for the lost sheep. For the appraisers who haven't a clue as to value. The ASB forces them to research a starting point so the industry is not embarassed...yep, still the dumbest trade on earth

You see, when I worked at a local S&L, the President was a "genius." The mortgage department never supplied the appraiser with the sales agreement or the legal description for the prior sale price. You never filled in the sale price of the subject on the URAR because then he would know you asked the broker for it-not good for future business to PO him. You see, he knew what it was selling for. He knew what it sold for in the past but he wanted your unbiased opinion of the value now. Not a bad method. They never lost one cent of the depositors funds and proudly advertized it.

Ben

 

[David C. Johnson]

As usual, nice work / post, Ben!

Regards,

dcj

 

[Francois K. Gregoire]

Looks like I'll have to agree with most of what Ben has to say on this subject. We're talking about "Appraisal Standards" rather than enforcement standards. Reporting sales and listing history in the manner described in the First and Second Exposure Draft from the ASB are enforcement standards.

Here's what one regulator had to say in his comment letter to the Appraisal Standards Board:

Section 1 - Standards Rules 1-5 and 7-5 (Property Sales History)

The comment letter submitted in response to the First Exposure Draft expressed measured support for standardizing the reporting of a three year sales history for all property types. After further examination of the rationale and analysis of several comments made by other State Regulators, a question arises concerning the need to alter the USPAP to bow to the enforcement objectives of some State Regulators. Is this a purpose of the USPAP?

The PREAMBLE of the 2002 Uniform Standards of Professional Appraisal Practice states the purpose of the Standards is to establish requirements for professional appraisal practice and the Standards are for appraisers and users of appraisal services. My reading does not find the purpose to be aiding a State in their enforcement efforts.

In the event a State finds a glaring omission in USPAP, one limiting their enforcement ability, they have the authority by rule or statute, to promulgate a SUPPLEMENTAL STANDARD to require an appraiser to analyze and report sales history for any appropriate time period. This would bolster their ability to enforce law and combat mortgage fraud and illegal flipping. Such a method would be preferred as a means of accomplishing the change for those States and Jurisdictions with a pressing need for such a standard. Not all States see the USPAP as an enforcement mechanism.

Absent the adoption of a SUPPLEMENTAL STANDARD by rule or statute, gathering, analysis and consideration of relevant prior sales and listing data could reasonably be considered to be required by Standards Rule 1-1(b), &copy;, as well as 1-2 (f). There does not appear to be a need to spell everything out in black and white.

The full text of the comment letter is posted HERE

If you want to read the cited Standards Rules

[url=https://www.appraisalfoundation.org/html/USPAP2002/STANDARD%201.htm]STANDARD 1

[url=https://www.appraisalfoundation.org/html/USPAP2002/STANDARD%202.htm] STANDARD 2

Some of us just look at things from another angle.