Changer in contract after appraisal effective date

[KenAZ]

I got a request to update the appraisal with the new sales price that was changed after the effective date of the appraisal about 1 month ago. Yesterday I got a request to make a comment whether a $56 termite inspection fee that was paid by the seller and then re-reimbursed by the closing costs would effect annother appraisal I did 1.5 months ago.

According to Fannie and Freddie, the contract date has to be before the effective date of the appraisal. I think that any new contracts or addendums after the effective date should not be included.

Is there something I am missing? Are we allowed to change the appraisal with the new contract information that happens after the effective date? If we do, are we required to change the effective date, and re-inspect the property?

Please help me with this. I want the facts regarding this, directly from USPAP, VA, FHA, Fannie and Freddie. You know, some direct quote I can respond to, with these requests.

Thanks for any help

 

[huntercharlie]

Fannie Q&A and link, not saying it's the right or wrong thing to do.

https://www.fanniemae.com/content/FAQ/appraisal-property-report-faqs.pdf

Q7. Why does Fannie Mae require the lender to provide the sales contract to the appraiser?
Fannie Mae’s policy is intended to help ensure that the appraiser is aware of all relevant aspects of the transaction. The sales contract provides important sales and financing data, including whether there are any concessions as part of the transaction. If the contract is amended, the lender must provide the updated contract to the appraiser to ensure that the appraiser has been given the opportunity to consider any changes and their effect on value. If the appraiser determines that there is no impact to value, then no additional commentary is required from the appraiser.

 

[Jo Ann Meyer Stratton]

Don not change your original report except for the signature date. You can attach an addendum to the report explaining what ever the new situation is whether a new purchase contract or termite inspection or what ever.

I copy the email from the AMC/client regardless of what the topic it and paste it to a blank comment addendum page. Then below that I type in bold my response. Then sign with a new signature date. I also clone my original report and add a letter to my file number so that it can't override or get mixed up with my original report. That way there is a very clear paper trail of what transpired.

 

[Lee Lansford]

I could do it...I have certainly done it...and will, no doubt, have the opportunity to do it again in the future. This is nothing of any great significance that need worry an appraiser. F

Open your copy of the current USPAP. Accompanying the USPAP, turn to the FAQs. See FAQ #139 "Does Changing the Sale Price Result in a New Assignment?" Though the question is not what you are asking, the response certainly applies.

 

[Lee Lansford]

When doing as I suggest:

--a "new" (current) 'date of signature & report' is mandatory;
--it is good to have a new file name for this report;
--be certain to report and analyze each and every version of the Contract of Sale;
--there's nothing sacrosanct about page 1 of a Fannie form...nothing in this regard.

And, yes, I am most certain of what I assert (but I can't guarantee that some will not take a contrary position).

 

[Lee Lansford]

As Jo Ann offers, there is no "changing" of the "original report" as that is done and gone.

What we are dealing with here is a subsequent report of the appraisal.

As in all things...explain, explain, explain.

Don't make a mountain out of a molehill and don't over-think this.

 

[J Grant]

Fannie Q&A and link, not saying it's the right or wrong thing to do.

https://www.fanniemae.com/content/FAQ/appraisal-property-report-faqs.pdf

Q7. Why does Fannie Mae require the lender to provide the sales contract to the appraiser?
Fannie Mae’s policy is intended to help ensure that the appraiser is aware of all relevant aspects of the transaction. The sales contract provides important sales and financing data, including whether there are any concessions as part of the transaction. If the contract is amended, the lender must provide the updated contract to the appraiser to ensure that the appraiser has been given the opportunity to consider any changes and their effect on value. If the appraiser determines that there is no impact to value, then no additional commentary is required from the appraiser.

Why would a change in contract price after effective date affect the opinion of market value? I have changed contract prices hen lender sends an amendment with a CS price change, OMV stays the same.

Explain in addendum that on original effective date CS price was $X , that on new date lender sent an amended contract price, the new CS price is Y$, analyze why CS price was changed if info is available, explain that no other changes were made to appraisal or to the OMV.

 

[KenAZ]

I know everyone does this, but think about it. . .

I know that there was a big controversy about using comps that closed after the effect date, and yet no controversy about using a contract that was dated after the effective date. It is no big deal to anyone.

I talked to my insiderd FNMA contact and he can't figure this out either. FNMA really doesn't care if you change the contract date to after the effective date of the appraisal. Sometimes they have to change their reviews due to an updated contract after the review date of the appraisal.

Makes no sense, but what I have learned is that no one cares.

 

[Don Clark]

I know everyone does this, but think about it. . .

I know that there was a big controversy about using comps that closed after the effect date, and yet no controversy about using a contract that was dated after the effective date. It is no big deal to anyone.

I talked to my insiderd FNMA contact and he can't figure this out either. FNMA really doesn't care if you change the contract date to after the effective date of the appraisal. Sometimes they have to change their reviews due to an updated contract after the review date of the appraisal.

Makes no sense, but what I have learned is that no one cares.

Ken,
IMNSHO if I am requested to change the sales price with an addenda or a new contract after the effective date of the appraisal, to me it is a new assignment.

I suggest reading not only all FAQ's starting on page F-62 through F-65 as well as The Scope of Work rule.

An appraisal report is a "Snapshot in time" of everything that has occured up to a date certain(effective date). Anything and everything after that is, in my opinion, a new scope of work, a new effective date, and for me, a new fee.

Understand that FAQ's and AQ's are NOT part of USPAP. They merely give guidance based on someones opinion at the Appraisal Foundation. State regulatory agencys are the final arbiter of such matters.

I do not believe that an appraisal report is an endless process. It is not like Willy Wonkas everlasting gob stopper. It has a beginning and an end.

Now, minor corrections can be made similar to what Jo Ann suggest. But, a change in price, terms, conditions to me is a new assignment.

 

[J Grant]

I know everyone does this, but think about it. . .

I know that there was a big controversy about using comps that closed after the effect date, and yet no controversy about using a contract that was dated after the effective date. It is no big deal to anyone.

Very different animals. Using comps that closed after effective date can impact/change appraiser's opinion of market value. Revising a contract price after effective date does not impact or change the appraiser's opinion of market value , which remains the same.

I talked to my insiderd FNMA contact and he can't figure this out either. FNMA really doesn't care if you change the contract date to after the effective date of the appraisal. Sometimes they have to change their reviews due to an updated contract after the review date of the appraisal.

Makes no sense, but what I have learned is that no one cares.

see above comments