Confirm That Utilities Are "on And Working"

[Have Laser-Will Travel]

It's simple: The utilities were on and working at the time of the appraisal inspection. As others say, take a photo of the lights on and water running as proof. What happens after the effective date of the appraisal is beyond our control. It's like worrying that the house has burned down after you left and before you submit the report. Do you go back and check as CYA? No. So much ado about nothing.

It may be apparent that deficiencies were long-standing; “Why didn’t the appraiser report that the second floor plumbing was disconnected because it had gone bad? The appraiser said the utilities were working”. You did a spot check. That would only verify that they were on. If you think working and on mean the same thing, then the stipulation is redundant...which doesn’t make sense which is part of why I have raised the issue. You may not ever have a problem but, you are responsible to meet the assignment conditions once you accept.

 

[bnmappraisal]

It may be apparent that deficiencies were long-standing; “Why didn’t the appraiser report that the second floor plumbing was disconnected because it had gone bad? The appraiser said the utilities were working”. You did a spot check. That would only verify that they were on. If you think working and on mean the same thing, then the stipulation is redundant...which doesn’t make sense which is part of why I have raised the issue. You may not ever have a problem but, you are responsible to meet the assignment conditions once you accept.

To me that would be beyond the SOW for a "normal" appraisal/appraisal inspection (my bold)
I think it more comes down to the clients SOW between them and you than anything else.

 

[Mr Rex]

It may be apparent that deficiencies were long-standing; “Why didn’t the appraiser report that the second floor plumbing was disconnected because it had gone bad? The appraiser said the utilities were working”. You did a spot check. That would only verify that they were on. If you think working and on mean the same thing, then the stipulation is redundant...which doesn’t make sense which is part of why I have raised the issue. You may not ever have a problem but, you are responsible to meet the assignment conditions once you accept.

So why wouldn't you check the 2nd floor plumbing was "connected" when you attested that the utilities were on? FWIW, utilities and individual mechanical systems have distinct and different definitions and meanings. Perhaps this is the beginning of your misunderstanding of what you are attesting to. If nothing else, reveal what you did and more importantly what you did not do...

 

[Have Laser-Will Travel]

To me that would be beyond the SOW for a "normal" appraisal/appraisal inspection (my bold)
I think it more comes down to the clients SOW between them and you than anything else.

But, what you are doing is making an interpretation regarding what is normal...this is what appraisers do...all the time!...because stips and FNMA forms and guidelines often don't fit reality or are contradictory or outside of the appraiser's expertise or have broad-sweeping implications when taking literally.

But, my concern is that the written word is going to carry more weight than interpretations in an action against your report. This may be especially true if a judgement is being rendered in a court that may not have any preconceived notion about SOW. I think that when you volunteer conclusions or accept an assignment condition that extend beyond the normal scope, you've just increased the scope and liability. I believe it will supersede any boilerplate limitations. It would also be problematic to argue that the SOW limitations don't cover such issues but on the other hand you are making conclusions about those same issues-it sounds conflicting...which means misleading and then becomes a USPAP issue.

 

[Have Laser-Will Travel]

So why wouldn't you check the 2nd floor plumbing was "connected" when you attested that the utilities were on? FWIW, utilities and individual mechanical systems have distinct and different definitions and meanings. Perhaps this is the beginning of your misunderstanding of what you are attesting to. If nothing else, reveal what you did and more importantly what you did not do...

So you are saying to check all electrical outlets, lights, spigots, lawn sprinklers, sewer lines, furnace, hot water, oven, etc. and state what you didn't check, being sure to cover everything? Some say just turning on a light means that the electric is "on and working". Are you saying they need to check the second floor too? Where do you stop? It's all very mucky.

But worse, even if you did that, you haven't complied with the lender requirement to verify that they were "working" because you stopped short and so, in a sense, you are just saying, "I didn't do what you asked me to do" when you write a disclaimer.

On a practical basis a disclaimer works; the report is not going to come back to you but, when someone loses money and is looking for someone to sue, i am worried that your hat might be in the ring.

Liability depends on what any ruling power decides "working" means. I don't think the lender knows what it means. I think they heard the lingo and followed tradition. No one here has been able to define "working" in a way that means anything more than "on".

 

[residentialguy]

Liability depends on what any ruling power decides "working" means. I don't think the lender knows what it means. I think they heard the lingo and followed tradition. No one here has been able to define "working" in a way that means anything more than "on".

It's your report. Clarify what it means. It's an inspection for valuation purposes...nothing more. You're not a home inspector and you need to make that abundantly clear.

 

[residentialguy]

nice thought but doing that goes directly against cert 23, which you can't do...

That's not correct, Tres. I have put this clarification (not a modification) in all of my reports to show exactly what the ambiguous language in Cert 23 means.

Clarification of Item #23 of the certifications listed on the pre-printed part of this report - page 6 of 6.
This certification is NOT to be interpreted as the appraiser is granting permission for use by other parties not identified as the intended user. The lender is to be the only intended user. This is NOT intended for any purchaser to rely on the appraisal to influence the purchaser’s decision to buy the appraised property, nor is it intended to influence the homeowner or be relied upon in any decision regarding the property or financing. Certification #23 applies to the buyer or homeowner only in the sense that they are the mortgagor, therefore they rely on the appraisal to fulfill the requirements of the lender; however the intended use and user never changes. While other lending institutions may decide to rely on the report, however the intended use and intended user never changes. Appraisers are not required to adhere to specific assignment conditions, terms, or requirements that were not disclosed at the time of engagement by the named client or client's agent. In the event that this appraisal is used by a different lender(s) that the loan is transferred to or sold to, this appraisal may not adhere to their specific requirements and/or may not understand the format order by the client/intended user. The appraiser is not responsible to have met any lender requirements other than those disclosed prior to completion of the appraisal, nor is the appraiser responsible to clarify the terminology or report format requirements to other parties than the client/intended user. This appraisal report is intended for the use of the client and other identified intended user(s) listed and once completed cannot be reassigned or readdressed to another party. No other users are identified, intended or inferred by the appraiser, (including the borrower and/or homeowner) and no other intent of use for this appraisal is to be inferred. The scope of work is set by the appraiser. Once completed and delivered, it cannot be changed by the appraiser for another lender or use. "Transferring" by one lender to another lender does not transfer the contractual relationship between the appraiser and the client/intended user stated in the appraisal. Nothing set forth in this appraisal should be relied upon for the purpose of determining the amount or type of insurance coverage to be placed on the subject property or any other purposes other than lending, as defined in this report. Should any terms and clarifications stated in this report be unacceptable, this report must not be used and a new report with acceptable terms must be acquired.

 

[Carnivore]

I found this and as usual it still raises questions in the Appraiser Mind just exactly are we supposed to do and what are we to conclude. This doesn't begin to cover the overall problem. Also the link below is already outdated. I hate FHA-HUD. Typical Bloated Governmental wing.

The solution to all this controversy is quite simple, so simple that it will never be done. It would stop all this; controversy ;interpretation 'appraiser liability, nonsense
Think about what they are asking for and ask yourself are you that qualified. I am not! Electrical, plumbing, mechanical systems in my State Require a State License. I don't have any of those licenses.

Considering that we are dealing with Real Property worth 10's of thousands of dollars. In many cases this is a first time home buyer. One has to wonder why HUD does not require a home inspection by a licensed home inspection professional. $450(guessing) is a small price to pay for insuring everything is in good minimum working condition of a SFR.

Well I completed my one FHA report for the Year about four days ago. It reaffirms my position not to do ANY FHA work...NONE!


https://www.mckissock.com/blog/appraisal/HUD-clarifies-appliance-requirement-in-handbook-4000-1/

 

[Tom4value]

nice thought but doing that goes directly against cert 23, which you can't do...

I was paraphrasing here (thus, not in quotations). The jist was the appraisal was only for the financing transaction. Homeowners have come back on appraisers claiming the house was not worth what they paid. My verbiage is to let the buyers know that determining if you paid what it is worth is not the purpose of my appraisal. Go find your own appraiser for that.

 

[Have Laser-Will Travel]

It's your report. Clarify what it means. It's an inspection for valuation purposes...nothing more. You're not a home inspector and you need to make that abundantly clear.

I don't think that is a bad idea but, I will say that it doesn't necessarily solve the problem. In such a case I would be coming up with my own ideas about what the client means. The client or someone else could contest my interpretation.

What I really think should happen is that the lender should be asked to clarify what it means. But, then my concern becomes that it will generate another vague stipulation that might include turning appliances, a light in every room, etc.-none of which we should be doing in the first place.

Financial institutions corrupt and retard the appraisal industry in this way. I believe they have the Appraisal Foundation under their thumb. I don't think they should be able to provide stipulations at all or that they should be placed under some standards when ordering an appraisal. The first limitation should be that the assignment to be confined to only those things that are directly relevant to value. I should have to state who is occupying the property or if it can be rebuilt or how many decades in the future it will remain.