Can I do the report for the "sale" and the "short-sale"

[Tim Schneider]

A couple weeks ago I completed a report for the sale of a home. Today I received an order from a different client (AMC) to complete a report for the same property with REO addendum with the purpose as "pre-foreclosure, short sale consideration".

I don't think there is any confidentiality issue here, as long as I don't reference the first report in the second, right? Are there other concerns I am missing? Am I reading into this too much?

 

[BOBBYGINE]

Was the sale you did for the other client the same short sale? I think you should disclose and then they will pass most likely.

 

[Charles Knutson]

I think this is covered by AO-27 -- my reading: new client, new assignment, no disclosure required.

http://commerce.appraisalfoundation.org/html/2006 USPAP/ao27.htm

Researching the question of requests for reassignment, AO-26 led me to AO-27.

http://commerce.appraisalfoundation.org/html/2006 USPAP/ao26.htm

 

[Tim Schneider]

Thanks Charles. I read that too, and I think I was just over thinking this situation.

 

[TJSum]

IMHO it would be a conflict of interest.

Your first assignment was for the purchaser's lender. Now the second assignment is for the seller's lender deciding whether to accept that contract offer or not. They are seeking an independent opinion, or another opinion to see if it jives with the contract offer in which you were involved with.

Not to disclose that you could be working for both sides would be a conflict to everyone involved, and disclosing would eliminate you most likely from the second assignment because the seller wants a another independent opinion on the deal.

Disclose that you could be working for both sides up front, if both sides have no problem with it, then you are fine, but most likely they will.

 

[Charles Knutson]

TJSum makes a good point --

USPAP may not require disclosure, but an unhappy client is not a good thing.

The safest course of action would be to disclose the lending relationship (not the report) to the short sale client, and only accept the assignment if they don't have a problem with it.