Comp Removal Per Client - USPAP Violation

[andy9005]

Another appraiser in my market area removed a comparable sale from his report at the insistence of the client. They basically said they wouldn't accept the report with that sale included. The subject property was a somewhat unique property, and the removed sale was several years old (but still a somewhat similar property to the subject). But now in hindsight he is concerned that he shouldn't have removed it. I can't find anything in USPAP addressing this type of situation. Was this a USPAP violation?

 

[George Hatch]

"Meaningful and not misleading to intended users" . If a user doesn't think a 3yr old sale is meaningful to their decision making then an appraiser would need to take that expectation into consideration.

 

[TerryRohrer]

If there was no reason on the appraiser's part to include the sale in the first place, it should not have been included. However, if the appraiser relied on the sale (and conveyed that in their report), the client has no authority to dictate how the appraiser reached and supports their conclusions. An appraiser should be able to support and defend their report.

 

[George Hatch]

The test for these decisions is what the other users (as a group) for that assignment would expect and what the other peers performing that assignment would do.

 

[alebrewer]

Agreed. A lender cannot require an appraiser to remove/replace a comparable sale - regardless of how poor a 'comparable' it is. If though, after request to consider replacing a horrid 'comp', the appraiser refuses to do so, and if the lender orders a subsequent valuation product that does not contain said comp, there's a good chance the lender will submit that report to the state for investigation.

 

[Terrel L. Shields]

Who is the lender? Some lenders are not going to accept a 3-year-old sale, especially if it is a SFR. Farms and commercial - well, I've used 3 year old sales for such. Churches, etc.

 

[swandel1]

I would not have removed it. The lender should have asked for an aditional comparable. Assuming it was a valid comp, I would have refused to remove it and added another comp to appease them and note that I gave much less weight to the extra comp for whatever reason. I have a feeling this was a vanilla Fannie, Freddie FHA loan; and the expectation was that the first 3 comps are all less than 12 months. If the appraiser only provided the 3 comps and one was post 12 months, I can see the problem. But again, they should have asked for another comp.

 

[shrubberyvaluation]

Another appraiser in my market area removed a comparable sale from his report at the insistence of the client. They basically said they wouldn't accept the report with that sale included. The subject property was a somewhat unique property, and the removed sale was several years old (but still a somewhat similar property to the subject). But now in hindsight he is concerned that he shouldn't have removed it. I can't find anything in USPAP addressing this type of situation. Was this a USPAP violation?

A unique property sounds like a perfect candidate for an older sale if its a lot more similar than recent sales.

 

[shrubberyvaluation]

Agreed. A lender cannot require an appraiser to remove/replace a comparable sale - regardless of how poor a 'comparable' it is. If though, after request to consider replacing a horrid 'comp', the appraiser refuses to do so, and if the lender orders a subsequent valuation product that does not contain said comp, there's a good chance the lender will submit that report to the state for investigation.

Yep, while technically they shouldn't do that, they don't really have repurcusions, you have repurcusions if you are not bullied. So realistically they can do whatever they want.

 

[alebrewer]

Yep, while technically they shouldn't do that, they don't really have repurcusions, you have repurcusions if you are not bullied. So realistically they can do whatever they want.

It would be awesome if there weren't any bozo appraisers out there. Fact is, though, that there are. Still inappropriate to 'force' an appraiser to do anything, though. It's the appraiser's signature. If they're really a bozo appraiser, their state board will know them soon enough anyway.