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Can you explain this one??

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Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
Just received the latest news letter from the Alabama State Board. They list the disciplinary actions for the last quarter. Most of the stuff makes sense. LOTS of trainee/supervisors items. But one stood out to me.

A8-02-23 - On August 2, 2002, a Letter of Warning was issued to a Certified Residential in connection with the appraisal of a single-family residence in which he/she signed as the primary appraiser. This disciplinary action will be considered in any future discipline proceedings. Discrepancies include: Licensee reported that the subject property included a septic tank. The subject property was connected to the public water system and never had a septic tank. Licensee supplied incorrect photographs for Comparables #4 and #6.

I can understand the Comp photos being wrong being a concern but what about the septic tank?? Septic tanks are common in our area due to rural nature of most of the county. I have regularly assumed that a house had a septic tank when sewer was not available. Am I now supposed to dig around to see if the tank is there?

Discussed this with another appraiser and we have about decided that we will just put unknown on the sewer line in the URAR. What else can we do?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Ah, Jeff. You're too good for this question. You call the city, town, county, public works - whoever would have that answer.

I sent in a review a few months ago that showed public water and sewer for the subject which it not only didn't have, it couldn't have it's own well and septic either. When the multi-family units a couple parcels away were foreclosed - the subject no longer could use that well and septic and the lines going to it were illegal. The subject ended up being foreclosed and that appraisal is now in the hands of the state investigators.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Jeff,

Discussed this with another appraiser and we have about decided that we will just put unknown on the sewer line in the URAR. What else can we do?

Start asking questions. Seriously, that's what we're here for. It's what forever separates us from the computer and is one of the few things we have going for us.

I'm sure that if you just ask the question you'll get the answer most of the time. If you don't ask, you are forced to start guessing. I once lived in a house that was on a short street with 6 other homes, surrounded on all 4 sides by a subdivision in a suburban Orange County municipality. These six homes were the only properties within miles that had an unpaved street and were not connected to the city's sewer line. I would bet that 9 out of 10 appraisers would assume that these properties were connected up, and they would be wrong.

If you ask and get the wrong answer, then you can at least prove that you were trying for follow the due diligence thing. Simply make it a habit to jot down a note on your inspection sheet or whatever you use to make sketches.

The reason it's a big deal isn't necessarily that there's going to be a significant difference in value, although there are costs involved when it comes time for a property to tie into a sewer system. No, the reason is because there are maintenance issues with septic systems, and occasionally there are failures and emergency replacements. We had that at our house. However, the biggest reason is because some lenders handle properties with septics differently, or at least they will say they do when they come after an appraiser for a deficiency. Makes no difference if they actually would have underwritten the deal differently, by making an error in fact the appraiser is providing them with some plausible deniability why it isn't their underwriting that led to the loss. "If we had known there was a septic system onsite we wouldn't have made this loan".

If you don't ask, you won't know.

George Hatch
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
:oops: :oops: :oops: Ever fell really stupid? Well I am right now. :oops: :oops: :oops:

Licensee reported that the subject property included a septic tank. The subject property was connected to the public water system and never had a septic tank.

I am so accustomed to having a septic tank on the properties I appraise I was reading it to mean there was no septic system of any kind. When they said "public water system" I was reading city water and didn't realize they meant sewer! :oops: :oops:

I always ask if it is septic, was thinking they had written the guy up because he assumed there was a septic system of some type and there was none.

:oops: :oops: OK, this rural appraiser will put the Remedial English book in the Out House for further study. :oops: :oops:
 

BenLuby

Senior Member
Joined
May 28, 2002
Professional Status
Certified Residential Appraiser
State
Georgia
Jeff,
Look for manholes covers as you go down the street. Also, look at the county records.
And, third, they caught this fellow using wrong photos. If they are going after him for that, why not tack on any other problems with the appraisal to get him with?
There is obviously a major problem with this report, so they will get every bit of evidence they can against him.
If you simply follow the advice given by the others here, and continue to do quality work, it really isn't worth worrying over that much.
The fellow you are referencing obviously has a lot more faults than what you see in the post. Keep on booking down the road with integrity and all will be fine.
 
Joined
Jan 16, 2002
Professional Status
General Public
State
North Carolina
Jeff

In NC, letters of warning are not a disciplinary action and are not published. NC gives very few of these but should be giving a lot of them.

A non-published letter of warning is essentially an admonition to do better. It would be very appropriate where the photos were inadvertently incorrectly switched somewhere in the process and the reporting error regarding the sewer was not a substantive value issue, and there were no other errors of reporting in the report. This would be particularly true if the identification of the issue (sewer vs septic) would "fool" the average appraiser, as in the case suggested by George.

In NC, we have an Administrative Warning that is considered a disciplinary action, it is published but is the lowest form of disciplinary action. The NCAB gives these out by the handfuls for violations which are often nothing more than differences in opinion between the investigators and the appraiser.

I personally believe these professional disagreements regarding adjustments should all be unpublished letters of warning. Proving a different adjustment could be made is easy, proving one to be false is very difficult.

Regards

Tom Hildebrandt GAA
 

kim grant

Junior Member
Joined
Nov 21, 2002
Professional Status
Certified Residential Appraiser
State
California
Jeff, no need to feel that way! Geez, the state's comment was just a little hard to understand (misleading?? :eek: ) I suspect the real issue was the erroneous comp photos.

With regard to all of your properties having septic systems whether or not you visually see one: my simple solution is to always ask the agent or the borrower and when they say "oh yes, we have........" I ask them to show it to me. LOL, many a homeowner have blushed when they said they had an a/c unit and when asked them to show me where the unit is located they say "oh, well, the house is plumbed for A/C but we don't actually have the unit" uh huh with a slight smile from me.

When in doubt, ask. And always state your source in the report.

Regards, Kim Grant-Matarazzo
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I can show you a property within the city limits and less than 5 years old that has a well and septic. In the front yard is a water meter and across the street is a sewer.

The city wanted them to tie into the sewer and pay $8000 for the hook up (because they would have to bore under the highway) There was another manhole about 400' away on the same side and the landowners were agreeable to let them go to his land. The mayor was just being a jerk. Ditto on the water, wanting a $3000 hook up for water. Drilled the well and put in a septic for $6000 after threatening to sue the city. Mayor signed the waiver.

I believe such could trick me a lot quicker than getting the wrong picture. The only time I have questions on pix are in sudivisions with multiple comp houses so similar I cannot tell which is which.

I did appraise the wrong vacant woodlot land tract once when the seller provided a survey for nearby property he was keeping instead of the land tract he intended to sell. No one thought to tell me the error until after the deal had closed. I kept trying to figure out why the acreage amount was 3 acres different from tax records....and this was well over 100 acre tracts. It all appraised for the same per acre anyway.
 

Travis McGee

Senior Member
Joined
Sep 18, 2004
They are going after the guy for putting the wrong comp PHOTOS in ??? I could understand if the comparable DATA he used was incorrect or inaccurate, which could potentially be a value issue, but the PHOTOS ??? Especially for comps 4 and 6 ??? I can already see the scenario, pain in the *** underwriter calls for 2 additional comps after you've already given them 4 comps, and you accidentally put the wrong photo for comp 6 in the report. Could happen very easily.
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I strongly suspect there is more to this story than is being made or perhaps can be said publicaly.

Of course this is the same board that denied me permission to set for my Exam and had to hire a lawyer to fight them so...........
 
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