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Can driveby be considered "complete summary" repor

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Doug in NC

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I am still relatively new at completing driveby appraisals. Can a driveby be considered a complete summary appraisal report? My understanding is that it is a complete summary report if you don't invoke the departure provision. Since the sales comparison is typically the best indicator of market value, while the income and cost approaches are not applicable (older home in an owner-occupied neighborhood). Am I right or do I need to go back to USPAP school? :?:
 

wyecoyote

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Doug,

A Complete Appraisal is when the departure rule is not invoked. A Limited appraisal is when the departure rule has been invoked. These are the types of appraisals there are three types of reports (Self Contained, Summary, & Restricted Use). If your talking about the 2055 this is a Limited Appraisal Summary Report per its own wording. As far as the Cost Approach being applicable on an older house depends on who you talk to. Personally I still consider this as an applicable approach even on older houses to value if the depreciation schedule is done correctly. However, some appraisers consider it as not applicable on older houses. Like I said it depends on who you talk to as in most appraising there are many opinions on how to approach appraising depending on who you talk to and who there mentor was. Don't even get started on asking how to fill out a form.

Ryan
 

Farm Gal

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:lol:
Doug:
USPAP gets the best of us tied into knots sometimes...

I will point out that in doing a driveby appraisal, you SHOULD perform significant departures, thereby precluding the possiblity of a complete report. There are a whole laudry list of things you did not do, and assumptions you HAVE to make since you did not personally inspect the property.

Most of us call it a Limited report, and I personally prefer a Restricted Use format.

That is an interesting point of view but I'd rather NOT try to defend it in front of my peers, or a jury!
 

Terrel L. Shields

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you SHOULD perform significant departures, thereby precluding the possiblity of a complete report.

I don't think I agree with that. If you actually do what you are supposed to do, an interior inspection is not required. What is required is that you obtain the knowledge of the "relevent characteristics", SR-1-2e, that related to value from "reliable third party sources". That is, in my opinion, you should contact someone (Realtor, banker, owner, buyer, seller, whomever) and have them give you a detailed description. In fact, you can do a complete appraisal without ever seeing the place. Again, do not confuse Fannie Mae standards with USPAP.

2055's are not USPAP. But using that form suggests you use the supplemental standards of Fannie Mae in preparing the report.

NOR do I agree that you need to depart from standards. Do not confuse standards with your extraordinary assumptions. You need to write a detailed SCOPE OF WORK section that details what you did. You need to state the extraordinary assumptions.

You can do a single approach to value or all three approaches to value and depart from standards either way. Departure does not require omission of an approach and omission of an approach does not constitute departure.

Be sure you correctly state in the report you did not do an interior inspection and not have some obscure check box stating otherwise. I think part of the confusion arises from USPAP itself in AO-2 it refers to this disclosure as "this limitation should be disclosed" An unfortunate choice of wording containing the magic "limit..." word. It is not a reference to "Limited Appraisal" (check next to last paragraph, page 1 of AO-2)

Check Advisory Opinions 2, 12, 23
 

Mike Garrett RAA

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So now...do you know what a 2055 is?

USPAP does not dictate the form..it does say what you must do to produce a creditable appraisal report that is not misleading. Look for changes forth coming that will do away with the confusing terms such as limited appraisal, complete appraisal, etc.
 

Steve Owen

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Jan 16, 2002
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Certified General Appraiser
State
Missouri
Strangely enough, I think I agree with all four of you.

Ryan is correct and his description of appraisal types and report types is accurate.

Lee Ann, in most circumstances I can think of your take on this is accurate. Normally, when drive-by's are done on a 2055 form a number of departures are taken.

Terrel, there is no doubt that it could be done as you describe. Under the right circumstances, it would be possible to do a complete appraisal on this form. I don't think it would happen very often; by the time you wrote the detailed scope of work, etc., etc., you would be better off to just do a complete appraisal on a 1004 summary report in most cases. (IMHO)

Mike, indeed USPAP does not dictate the form. From what I've seen of the 2003 revisions, the changes you are talking about will not come soon; but, they probably will come.
 

Frederick R. Ruffell

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Jan 21, 2002
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California
Not this issue again!!!!
Hey is the USPAP 2003 available yet? What is the web address?
 

Bill_FL

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Certified General Appraiser
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Florida
As far as the Departure Rule, I believe SR 1-3, SR 1-4 and SR 2-4 are the only SR's which you may invoke the Departure Rule. Since you can not invoke it on 1-1 and 1-2, you must provide enough information to provide credible analysis. Just because it is a drive by, does not make it automatically a Limited Report. SR 1-3 covers H & B and zoning/land regulation issues and 1-4 covers the approaches to value. If this is what you are departing from, then it would be limited. Otherwise, you must still have access to enough reliable information to provide a complete report. USPAP never states you even have to see the property. Simply that you must have adequate information about the subject to perform the assignment with credible results.
 

bradellis

Member
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Jan 16, 2002
Doug,

It's the scope of work that counts. What the form calls it is irrelevant.

In this assignment, you have a limited scope (note not a limited appraisal). Because you cannot see the inside, you cannot do a cost approach. If the home is in an area where rentals are not the norm, the income approach may also not be applicable.

So, you are not departing; therefore, it is a complete appraisal.

The ASB has issued a comment that the form meets the requirement of a summary reprot.

So, you have a complete appraisal reported in a summary format.

Brad Ellis, IFA, RAA
 

Doug in NC

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North Carolina
The essence of uspapian theory revealed - CLEAR AS MUD. I'm glad we all agree on this. :lol:
 
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