Can't Make Value, Charge A Trip Fee?

[DB]

Why the mutter and grumble? Because you didn't get there first or is it something from another part of the forum? :lol: :lol:

 

[Pamela Crowley (Florida)]

It's because I don't care for this idea for appraisers.

I guess I'll have to admit it can be done legally. I don't want to just sit at my desk and make an educated guesss!!!!! I want to go see the properties. I want to do real appraisals!!!

Greg did a very good job describing how it can be done legally. I know Chris is doing these and I respect her and know she would only do them as long as they are USPAP compliant.

It just seems.... no, feels so..... so...... not right or even degrading to me to think about doing these. ----- Guess I'm whining (grumbling & muttering) about what appraising is becoming. I'm not happy about it but, I won't be left as a dinosaur either.

 

[CANative]

Pam, when I was writing this and re-editing I missed some of the detail in the intended use as well as explaining that there is no premade form for this type of appraisal. The intended use language would explicitly state that this appraisal is not for use in a mortgage transaction. It cannot be depended upon to make a loan decision. It is designed to aid the client in making the decision whether or not to proceed with a complete appraisal. This appraisal could be communicated in writing in any manner you wish or even verbally. Very limited scope as requested by the client. Little liability and full USPAP compliance.

The main reason I've put this out is that I'm sick of lenders expecting us to perform free services. Let them put their money where their mouth is and assume some of the financial risk. You're still going to get the full fee assuming the lender requests a full appraisal later. And if they don't you've been compensated for your time.

Fee? I would propose $100. A quick review of subject's characteristics in online public records or a telephone interivew (disclose this), 15 minute run through on MLS, 15 minute report from a template, billing and overhead. $100 is low enough for a serious and honest mortgage broker and high enough to weed out the disonest ones.

 

[DB]

In looking at this further, I am not seeing much difference between what you have described and simple evaluation, usually to find the most probable selling price. In this instance, the evaluation does not have to be USPAP compliant, because we are not giving an opinion of value, but rather most probable selling price based on comps from the area and adjusted to equality. We do those quite often, both commercial and residential. We charge $75.00 for the residential and I am not sure what we charge for commercial, because I never go there ..... This is usually at the request of a bank, who does this in place of having a loan officer go out and do something similar. It can be done to USPAP compliance, but there is really no need. Does this sound like the same scenario?

 

[CANative]

but rather most probable selling price based on comps from the area and adjusted to equality

Isn't that the partial definition of market value? If that's what you're providing an opion of then its an appraisal, even if it is expressed in a range.

A bank loan officer does not have to comply with USPAP because that loan officer is not a licensed appraiser.

 

[Pamela Crowley (Florida)]

I think Greg's got you on that one Doug.

Are the people in your office doing this with a real estate broker hat on or is the bank wanting these because you are appraisers???

As an appraiser, if you give a value of any kind, it's an appraisal. Calling it by another name doesn't change what it is. There used to be a mis-interpretation of a consulting assignment whereby an appraiser could provide a potential sale price or range and not call it an appraisal. I believe that is gone - if it ever really was there. Need a real USPAP guru for that answer.

 

[DB]

Well ... I have seen (and I am sure you have too) times when the selling or market price did not equal the value. Case in point .... I recently was called to do a 1004 in the next county south .... Selling price was only $92K after having been on the market for over a year. I completed my appraisal and called the realtor before I turned it in to find out what was wrong with the property. The market said the value was close to $140K ... I was convinced that there had to be something wrong with the place that hadn't been disclosed to me .... I even used comps on the same street that had sold the month before .... It was a beautiful place and in immaculate condition .... I would have bought it myself if it had been closer to where I need to be ...... I called the assessor in that county to see if he knew anything that I didn't .... I was thinking that maybe there were plans to put a road through there or that there was a property line dispute over septic field lines, or something that was keeping this property for selling at the value the market showed. No one could shed any light on it. I sent it to my CG who looked it over and asked me the same questions that I had asked of the realtor and the assessor .... neither of us could figure out what the difference was ... He was satisfied with my figures and my comps and my value .... but we were both left scratching our heads on the difference.

Now .... if we had done a price only probability, we would have never found the value to be so much higher ..... and a LO ... wouldn't even know what we were talking about .... in this instance if we had evaluated the selling price only, wouldn't be more consulting with the bank as opposed to setting a value for lending purposes?

I am sincere in asking these questions ..... There is a box on the form that asks if this was done to USPAP standards, Y/N? ... and it clearly states in large letters at the top of the form that "THIS IS NOT AN APPRAISAL. THIS IS AN EVALUATION OF REAL ESTATE ONLY" ..... So help me out here ..... are we talking about the same thing or not?

Thanks brother.....

 

[Bill Wintermyer]

During a CE class the instuctor made it very clear that the way the courts are leaning it doesnt mater what hat your wearing because the court says if your an appraiser then anything less does not count... Is this the deep pocket theory???

 

[CANative]

Doug - price and value are not the same thing (they are not interchangeable terms) Sometime one can equal the other, sometimes they dont. Nevertheless, they are two separate concepts.

I'm not sure what your office is doing, but my guess would that the service your talking about is a pre- or post-closing inspection of the property. Often, before a loan funds, the bank or lender sends someone out to the property to make sure its actually there, that it is not damaged or about to fall off a cliff. This is not an appraisal (unless they have requested an opion of value or whether or not you agree with a value reported.) Another type of report like this is a fannie mae 2075 (or freddie mac 2070) Again this is just an inspection and marketability report. No value is provided. Not an appraisal (and for any trainees/newbies reading these posts, you cannot count these reports in your log of experience, at least in California.)

My concept was designed for pesky clients who have no idea what values are in a particular area and try to pressure an appraiser for a comp check or to advise if a value is not going to meet their expectations. It's a hassle for us (as well as unethical) so this concept would put the decision back in their court. It gives them an option instead of just thinking of us as axx hxxx appraisers.

 

[DB]

I understand what you're doing and why ... and I like it .... the form I am actually referring to is the FW69 form ..... Banks in this area usually order them in situations where they just want to know that it is there and that they aren't loaning a lot of money on a dead horse. If the reported LTV is super low, then they want someone to make sure it is there and that the price is in line with everything else around it .... kind of a back up on a loan they were going to make anyway .... no value stated ....

Are we on the same page?