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Client Solicitation vs USPAP

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Conservative in Virginia

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Joined
Aug 16, 2007
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Licensed Appraiser
State
Virginia
I was told me that it is a violation of USPAP to solicit prior customers (homeowners) for appraisal - new appraisal. Pouring thru the 2008-2009 folder this am I can not find this specific wording. Understand that any discounts for business must me disclosed but nothing to the effect that this is a violation. Can anyone cite the paragraph(s). Thanks
 

Hamlet

Elite Member
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Aug 14, 2006
Professional Status
Certified Residential Appraiser
State
Ohio
It is not a violation of USPAP to solicit clients. Are you talking about soliciting the borrowers (now homeowners) of lenders you’ve done appraisal for? You must not discuss the prior appraisal with these new clients; otherwise you may solicit new work.
 

Conservative in Virginia

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Licensed Appraiser
State
Virginia
Yes Donna. Solicit the 'houses' so to speak. A letter indicating that I had 'appraised' it before and would be glad to help them if they may be in need of another appraisal perhaps considering refi, sale, home improvement or just general knowledge. I will NOT do this if it is a violation of USPAP- the 'person' who told me this... (used to be an appraiser) and said it was a violation to specificially target those folks...that I must say..send my letters to other neighbors or something like that. I wish USPAP had an index for something like this.
 

Don Clark

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Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Yes Donna. Solicit the 'houses' so to speak. A letter indicating that I had 'appraised' it before and would be glad to help them if they may be in need of another appraisal perhaps considering refi, sale, home improvement or just general knowledge. I will NOT do this if it is a violation of USPAP- the 'person' who told me this... (used to be an appraiser) and said it was a violation to specificially target those folks...that I must say..send my letters to other neighbors or something like that. I wish USPAP had an index for something like this.

Now you know why he/she is a "former" appraiser.:) There is no such violation. It is simply good business to do what you propose. It would only be a USPAP violation if it were false or misleading advertising. That is covered on page U-8, LINES 251-258. Just do not discuss anything that might be confidential to the previous client.
 

Lost Cause

Senior Member
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Sep 17, 2004
Professional Status
Certified General Appraiser
State
New York
Yes Donna. Solicit the 'houses' so to speak. A letter indicating that I had 'appraised' it before and would be glad to help them if they may be in need of another appraisal perhaps considering refi, sale, home improvement or just general knowledge.
(My bolding added)

Just be sure not to impy that you can provide them with an appraisal for financing. In pursuit of appraiser independence, the regulatory authorities require that appraisers for mortgage financing must be selected and engaged directly by the lender.
 

Conservative in Virginia

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Licensed Appraiser
State
Virginia
Thank you guys. Don...the reason he is NOT an appraiser anymore is way WAY beyond this minute kind of thing... unfortunate ...but I want to cover my hind parts so to speak. Yes I know about the lending issue.. I am thinking of offering the GP and place emphasis on its specific user. IF a lender comes my way afterwards we are looking at another animal AND fee. HEY maybe a new client. Thank you all for your help.
 

Terrel L. Shields

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May 2, 2002
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Certified General Appraiser
State
Arkansas
In pursuit of appraiser independence, the regulatory authorities require that appraisers for mortgage financing must be selected and engaged directly by the lender
That is correct. And therefore if you solicit work from private parties you must inform them that they cannot take the report prepared for them to a lender with expectation that the report will be acceptable. This happens. Secondly, if you do a fannie mae report for a HO it explicitly says the form is not for any other use than mortgage lending. Therefore, you have to provide a HO a different format, either a narrative or a General purpose form of some sort. In that event, if they take it to a banker you will have to make considerable modification to the report to comply with current fannie mae rules. So, you must disclose that fact to the borrower and the fact they may have to pay for another report.

If they comtemplate taking it to a lender and have to use another appraiser whose value comes in lower, then you may be headed for court. The HO will have lost the 'deal' and been out 2 appraisal fees.

For me, it is not worth the risk. I would rely upon a more generic form of advertising - perhaps on a Real estate website or as my own website. A website runs about a dollar a day. Well planned it will pay for itself especially if you are niche appraiser.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
the regulatory authorities require that appraisers for mortgage financing must be selected and engaged directly by the lender.

That only applies to FRT's & banks with a Federal charter.

This does not apply to mortage brokers nor banks with a State charter.....unless you choose to make it YOUR policy.....and I did.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
That only applies to FRT's & banks with a Federal charter.

This does not apply to mortage brokers nor banks with a State charter.....unless you choose to make it YOUR policy.....and I did.

Correction ...
banks with a State charter.....unless
they are insured by the FDIC (i.e. then it becomes a FRT)
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Private money lenders, whom there appear to be a great deal of lately, do not have to abide by the lender selected appraiser ... and often dont.
 
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