COMP CHECK SHEET

[mark peters]

Found this on another appraiser bulletin board. I think that it might violate USPAP. If not, maybe a good way to at least get half of your fee. This was created by a Certified appraiser. Here is what the form says:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

TO: ______________________________
FAX: ______________________________
RE: ______________________________

You asked us to look into the potential value on the above referenced property. We cannot make a reliable determination as to the value of the property until we have seen it. We can provide the following information:

County has appraised the property at $____________

Most recent sale info on subject (if available ________________________

We can schedule the appraisal, do the physical inspection of the house, do the needed preliminary research. If the inspection and preliminary research indicate that the subject will NOT be worth a minimum of $_______________, we can call you, tell you this and stop work at this point. In that case, the cost would be one half of the standard appraisal fee.

Please let us know if you would like us to proceed with this appraisal assignment.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
????????????????

 

[Terrel L. Shields]

At this point, I would say it is really a grey area. I think what you have, in my opinion, is an oral appraisal, which is legal. You must have documentation in file and you have proved a value....Less than X dollars or More than X dollars. Properly documented in file I would suggest this is legal.

The question I would have, is that by the time I have got that far, I am about 80% done, since much of my calculation is one on the form itself. By only getting a 50% fee, I would feel like I was getting the shaft.

Otherwise, just tell them everytime that it won't appraise, collect the half fee, and go on your merry way. If drive by, who is the wiser? Destroy the evidence, don't fax the above, give it to them orallly. If they do not have any documentation, they cannot prove you provided with any service, only money. (FYI - This last paragraph is tongue in cheek.)

 

[Frederick R. Ruffell]

Mark,
What is the Web address of the other appraisal website?

 

[Mike Garrett RAA]

Read Advisory Opinion 19....looks like it came right from there.

 

[Frederick R. Ruffell]

Mike,
I think you are right, in which case if one were to use this format and put a number in the last line one would be stating an opinion of value as "a relationship to some benchmark" and would need to comply with USPAP. All this according to AO-19

 

[AC King]

USPAP Standards Rule 2-3 ....... my compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

Appears that the form mentioned makes the assignment contingent upon a stipulated result (predetermined value). Two different fees for the same assignment depending on the value? Smells strange!

 

[Richard Carlsen]

Who has the time to do this sort of thing?

And I certainly hope that you are getting paid for taking your valuable time if you do it.

IMNSHO stopping work on this order after the inspection because it did not meet a certain dollar amount constitutes doing an appraisal. You have said that the house has a value of less than a predetermined amount. That is an appraisal. Show me your work as required by USPAP.

I hear very little of this "comp check" anymore. A couple of years ago that was all the rage. I have flat out refused to do it because once you start looking for comps, the LO will try to back you into a corner to make value. I simply tell them that I can't appraise what I haven't seen. Period.

 

[Mike Garrett RAA]

Wow Richard....I turn down 3 or 4 of these request nearly every day. Mostly out of state refinance lenders. They tell me they are getting my name out of the yellow pages. Guess being at the top of the list isn't always that good. (Affiliated Appraisers, Inc.)

AO 19 states you can do this type of work but also cites the dangers involved. When speaking of predetermined value, I feel having a copy of the contract does exactly the same thing...but you are required to review the contract, if there is one.

 

[bobburnitt]

Terrel,

Telling them it won't appraise is giving a value.

Just like doing a review, if you disagree with the value without stating a specific value, it is still value opinion, and is an appraisal.

BB

 

[Richard Carlsen]

Mike

I always view the purchase agreement as a last comp. The buyer (the market) has said that they are willing to put their hard-earned money on this property for this amount of money. That is a very good indicator of subject's value as long as it was a knowledgeable, arms length transaction. I actually put a lot of weight on the p.a. and almost take the position that I have to disprove the value.

Just did that on a house that 2 years ago I appraised for $45K with 5 of the worst comps one could want. But that was all that was available. Now that they have a p.a. on it for $42K and tell me they "need" $45K to make the deal work. 5 beautiful comps now come in at a solid $41K. "Why." says the loan officer, "when you appraised it at $45K two years ago?" "Because" says I, "2 years ago there were only larger houses available for comps which has a tendency to inflate the indicated value. And besides, in case you have not heard, there has been a recession in the past two years and the value probibly went down during that time in this price range." Silence on the line. Guess somebody forgot to tell this LO that values not only can go up but that they can go down.