Common errors in reporting

[Restrain]

This link is to the current on-line newsletter by the TALCB. On page 2 is a list of common errors that they have found in their reviewed reports. Hope it helps you. And yes, I've had to review my templates to be sure that all my i's are dotted and t's crossed.
http://www.talcb.state.tx.us/pdf/newslette...pprrpt-0602.pdf

 

[Jeff Horton]

Just got this list from AL's Board. Interesting to look that the differences in what our Boards are looking at. Something are similiar but some seem way different!

BTW I scanned this in and the ran it through my OCR software. I proof read it really quick but if you see any obvious errors you will know why. Its late and I am not interested in proof reading that close

TOP 10'' DEFICIENCIES

1. Failure on the part of a Supervisory Appraiser to provide adequate supervision and/or training to Trainee Real Property Appraisers

2. Selection and use of inappropriate comparable sales or failure to use compatibles that are locationally and physically most similar to the subject property

3. No meaningful discussion or supports explain large adjustments in the Sales Comparison Analysis, and inconsistencies among the adjustments applied to the compatibles

4. Inaccurate, incomplete, or intentionally misleading description of the subject neighborhood, site, improvements, or comparable sales

5. In appraisal of older residential properties, no information provided in support of unreasonably low effective age estimate for the Subject and/or compatibles

6. Failure to disclose and analyze pending agreements of sale or listings of the subject property and failure to report previous sales history within prescribed USPAP time frame (l-year Minimum for one-to-four family residential properties)

7. Boilerplate reconciliation comments in the Sales Comparison Analysis that provide no meaningful explanation as to which comparables were given the most weight, and why, in determining the value estimate

8. Insufficient information provided in the report to enable the reader to understand how the appraiser reached his or her conclusions, i.e. site valuation methodology, methodology employed to estimate depreciation

9. Failure to verify comparable sales data with one or more of the parties involved in the transaction

10. Non-compliance with USPAP Competency Rule in the development and communication of an appraisal.

This list was compiled by Alabama Real Estate Appraisers Board investigators. It reflects the most frequently occurring problems noted in the review of complaints involving residential appraisals.

 

[Frederick R. Ruffell]

With regards to #9 listed by Jeff, Is it not suffucient to use the MLS data and a secondary source confirming the sale (i.e. Doc#) ??? I only contact a live human being or party to the transaction when I cannot get info. through the MLS, Public records, or title co. Have I not been performinging due diligence all this time!!!!! I thought I could rely on data sources I deemed reliable.

 

[Richard Carlsen]

You can rely on MLS data for sold dates, selling price, etc. if you consider it reliable. Contacting one or more parties to a sale for verification would be a ridiculous requirement. First of all, the buyer is not going to tell you the truth about what he paid for a property. He see so many numbers at closing, I would doubt his memory. In like manner, the seller is not going to tell you the truth about what he finally took for the property.

The data in the MLS is from a party involved in the transaction (the listing broker who acted as the sellers agent in the transaction) and if in your mind, the data in the MLS is reliable, it is adequate to use in a report.

 

[Jeff Horton]

I agree Richard. Calling the Realtors around to here to get the data they left out of the MLS (like how much was basement and how much was above ground) is usually fruitless. They dont have a clue and really dont want to be bothered.

More than once I have called to find out on what the Finacing terms were when they say "other" and I get this silence as they think. Then "I think it was conventional, yea it was" Really inspires confidence!!

 

[Richard Carlsen]

Jeff

That is one of the reasons I serve on the Board of Directors for the Waterwonderland MLS. As a director, I vote on policy, fines, etc. It gives me a say in helping to get good MLS data that is so vital to my end of the real estate business. I can do a whole lot more than just complain about it.

Another reason to be a Realtor (Appraiser-type)

 

[Red Blumenstock]

Jeff,

I think the best answer was "If you can rely on it". In my classes if I want a laugh, I ask, How many of you believe what you read in the MLS?" The true reason for the MLS is to sell the property and the data is often "enhanced". I have always followed the practice of speaking with a party to the transaction, preferably a Realtor. You can very quickly learn who you can trust and who you can't. I personally have not had the experience of finding the MLS as particularly reliable.

Red Blumenstock

 

[Stephen J. Vertin MAI]

The Texas standards are directly out of USPAP. Thank God we have some rational thinkers in this country. However, what is up with Alabama? It appears we have yet another psycho board who has joined the ranks of North Carolina and Illinois. I wonder were they find these knuckle heads? I am serious. I am becoming convinced they scourer the back streets of the major cities for old winos, clean them up and elect them to some of these seats because some of these people suffer from wet brain. They just want to make up their own rules assuming the rest of us should know better. In the truest sense it fits into the definition of insanity.

Lets start with number one. How vague can you possibly get. Failure to adequately supervise. What does that mean and how is that judged? Does it mean if the State does not like how you train, even without a clear violation within a report, they can fine or take away a license? What criteria do they use and were is it in USPAP?

Number two has been hammered to death on this forum and I believe it is going to take a major law suite to stop some of these bureaucrats from believing they are God sent in the selection of comparables.

Number three sounds like they took it from Fannie Mae's guidelines. Has anyone in Alabama heard of a restricted report? Furthermore, the amount of discussion is the amount agreed upon between the appraiser and client. Again, purpose and scope.

Number five. It seems to me the given physical condition of the property says it all. These vague terms like, not fully discussed, or not adequately completed, are crap. Another law suite waiting to happen.

Number six forgets to add in the normal course of business. Number seven acts as though there are no choices of reports (restricted, summary, self-contained) and all reports should be the same. Number eight has also been hammered to death here on the forum. What happens when the exact same home directly next door to the subject sold; however, the broker goes on vacantion for a month. Do you forgo the sale even though the information is clearly put on MLS? Show me the definition of verification in USPAP or for that matter in any know text. Again, rules to be selectively enforced.

This stuff is my pet peeve. How did we let these morons take over this business?


Steve Vertin

 

[Paul Ness MAI]

How about checking the deed for basics of the transaction? Also, if you don't call anyone, how do you find out specifics of the financing concessions or seller financing? Thay may not give the info to you, but at least you did your job by asking.

 

[Frederick R. Ruffell]

The trick with the MLS data is knowing the lingo. "Needs TLC" to me does not mean tender loving care but rather terrible lackluster condition, "bring you imagination" means bring your bulldozer, "as is" means asses need only make offers.