Certified Residential Appraiser Doing Commercial Appraisals

[JT1974]

The warehouse owner just learned a valuable lesson........

You get what you pay for!

 

[Lee Lansford]

Someone came into my office with a report in hand to ask my opinion if the appraiser did a good job on a commercial property. I told them, sorry but I can't help you because I only do residential appraisals and not commercial appraisals. I looked at the report to see if a reliable commercial appraiser had done it and it turns out that it was done by a certified residential appraiser and it was even done on a single family URAR report. The report is of a commercial warehouse type building and its purpose was for fair market value for the owner to possibly sell it.
I told them that this appraiser has a very bad reputation in general and that it should have been done on a commercial form or a narrative report by a commercial licensed appraiser. After they spoke to the appraiser, he said that since this was not done for a federaly related mortgage loan, that any appraiser could do it and on any form. I told them that this is not correct and I was looking to see if anyone can direct me to any reference material stating the pros or cons of his argument to see if the property owner wants to turn the report into the state or if she can get the refund that she is requesting.
Thanks in advance.

Just a thought, but since the appraisal is above the appraiser's license level, why don't you forward it on to your state's appraiser regulatory agency?

 

[PropertyEconomics]

The warehouse owner just learned a valuable lesson........

You get what you pay for!

And now its time for the appraiser to learn a valuable lesson ........

You dont do things you are not qualified to do and you dont steal money from clients. I hope the board sees it the same way.

 

[George Hatch]

In the OPs place I wouldn't have expressed an opinion about the other appraiser's reputation. That's how an unproductive pi$$ing contest starts. The appraisal was either competently performed and reported or it wasn't. Personalities have nothing to do with it.

I'd ask the client to get on the phone and have a chat with the appraiser. Give him the option of either refunding the fee in full or facing the consequences (if any) of a complaint.

Regardless of licensure level, the SOW for the assignment and the adequacy of the report is subject to the same benchmarks that would apply to any commercial appraiser. In other words, if there are problems this appraiser can't use the "I'm just a residential appraiser" defense. Seeing as how this assignment was reported on an URAR I"m willing to go out on a limb and guess that there are several elements that a commercial appraiser would have addressed in the valuation that were (probably) omitted in this case. The Sales Comparison itself might have some serious errors.

 

[BlakeAlden]

Just a thought, but since the appraisal is above the appraiser's license level, why don't you forward it on to your state's appraiser regulatory agency?

I was looking for something concrete in writing for the owner to show the appraiser that he should not have done the assignment. In lieu of this factual data the report is going to therefore be turned into the state for them to make the final decision. I was trying to have the owner avoid this step and prove immediately whether his argument was factually correct or incorrect.

 

[BlakeAlden]

In the OPs place I wouldn't have expressed an opinion about the other appraiser's reputation. That's how an unproductive pi$$ing contest starts. The appraisal was either competently performed and reported or it wasn't. Personalities have nothing to do with it.

I'd ask the client to get on the phone and have a chat with the appraiser. Give him the option of either refunding the fee in full or facing the consequences (if any) of a complaint.

A mutual friend of the owner of the property and myself brought 2 reports in to ask my opinion on why the 2 reports were so different and if I agreed with the respective values. The report in question was just done recently and was on the URAR form by a certified residential appraiser. The other one was done in 2003, I believe, and was a narrative report in bound book format. I told them that I could not give my opinion of value because it was a commercial property (among other reasons), but I told them the bound narrative one was done by a highly respected appraiser in the community and the other one was not done by a commercial appraiser and in fact was done by a residential appraiser with a very poor reputation in the community.

The owner did get on the phone with the residential appraiser on my advice to hear him out and see if she deserved her money back. He told her that he completely did the right thing since it wasn't for a lender and if anyone told her differently that they were the wrong one. She did say that he asked her how much money she thought she deserved back when she said she might turn it into the state.

I just want to prove on paper whether he is right or wrong. No ****ing contest required.

 

[Don Jones]

Terrel,

I often see large acreage farmland appraisals that are done on the one page form that was designed for residential lots. Most of them are a sham and done by appraisers (number monkeys) that don’t have a clue. Had the opportunity to see one where the person that completed the report missed value by approximately $800,000. Quite a large liability to take on.

By the way, I very much enjoyed the class last Friday. Hope to see you again one of these days.

 

[Terrel L. Shields]

Don
Been meaning to take a trip to the river and do a little history tour of the New Madrid faultline...maybe then...on my bucket list so to speak

I have seen some CRs do some remarkably good work and when under the de minimus, I don't have a problem with it. I have a problem when I see a CG doing a farm on a URAR. I know he can do a narrative because I saw one his several years earlier. Not that it wasn't hokie. The farm involved a divorce and he appraised it for $425,000; another appraiser appraised it for $325,000; and, finally, it sold a year later $275,000. The seller was required by the court to pay $50,000 to her husband based on the $425k which ended up sending her into bankruptcy.

 

[Michigan CG]

...... a CG doing a farm on a URAR......

There are "appraisers" that are that stupid? I need to get out more....

 

[Lost Cause]

The URAR form for a warehouse would certainly not be a good indication of competency.

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