Brad Ellis
Senior Member
- Joined
- Feb 7, 2006
- Professional Status
- Certified Residential Appraiser
- State
- California
George,
Sorry I phrased that poorly. We do not disagree on this. My disagreement was in part with what Greg had said- not that he was actually wrong. The discussion is mostly about reporting. What is less clear now is the actual reporting requirement.
On that front we are in lock step- each value presented in an appraisal report should certainly have the value presented within the context of the exposure or marketing time, as the case may be. No reader can know that period unless the appraiser tells them. And, for some assignments, such as REO, there could easily be three times and 3 values.
I think two things are bugging me on this question and they are not limited to this question specifically. First is the notion that unless USPAP actually spells it out, there is no real obligation to report certain parts of the appraiser's reasoning in the development of the opinion.
It just gives me the impression that what the profession seeks is the quick and easy way out. Unfortunately for appraisers, in some circumstances, there is an easy way out but it does not involve appraisers. Rather, it involves AVMs and BPOs. So, I simply issue a caution to all who do fee work that if we get to the point where you truly feel the client does not need to know about important things (.i.e., just trust me) then the time will surely follow that the clients feel that they do not need the appraiser.
The next thing is the question of absolutes in whether or not an appraiser ought to be analyzing certain things in light of the assignment.
In 2003 we went to a 3 year analysis period for prior subject sales; before that it was one year. If there is an appraiser out there who does not believe that this is important, it is time to hang up your spikes, especially in light of all the fraud going on with flips, etc.
We just finished a case in which a prior sale 16 months before the 2001 appraisal of a brand new home was not analyzed. Remember the absolute of 12 months. The sale in 2000 was below $300K and now we get not one but two appraisals over $500K in a market in which prices had hardly budged!
While the 12 month period had passed, that prior sale was absolutely "relevant" data and SR 1-4 requires the analysis of all relevant data. However, it was not specifically "spelled out".
Frankly, I think that this reporting is the measure, in part, of the really good appraiser vs. the lazy appraiser. And, I guess, each pro must make up their own mind on this. Suffice to say that the "added" work load to write a paragraph of explanation is not so onerous as to bite into their incomes. In fact, the bigger hit to income will come when the market slows and clients really get to pick their appraisers more carefully and deny work to the lazybones and give it to the good ones.
We reap what we sow.
Janet,
I have NEVER claimed to be a reasonable man!
Brad
Sorry I phrased that poorly. We do not disagree on this. My disagreement was in part with what Greg had said- not that he was actually wrong. The discussion is mostly about reporting. What is less clear now is the actual reporting requirement.
On that front we are in lock step- each value presented in an appraisal report should certainly have the value presented within the context of the exposure or marketing time, as the case may be. No reader can know that period unless the appraiser tells them. And, for some assignments, such as REO, there could easily be three times and 3 values.
I think two things are bugging me on this question and they are not limited to this question specifically. First is the notion that unless USPAP actually spells it out, there is no real obligation to report certain parts of the appraiser's reasoning in the development of the opinion.
It just gives me the impression that what the profession seeks is the quick and easy way out. Unfortunately for appraisers, in some circumstances, there is an easy way out but it does not involve appraisers. Rather, it involves AVMs and BPOs. So, I simply issue a caution to all who do fee work that if we get to the point where you truly feel the client does not need to know about important things (.i.e., just trust me) then the time will surely follow that the clients feel that they do not need the appraiser.
The next thing is the question of absolutes in whether or not an appraiser ought to be analyzing certain things in light of the assignment.
In 2003 we went to a 3 year analysis period for prior subject sales; before that it was one year. If there is an appraiser out there who does not believe that this is important, it is time to hang up your spikes, especially in light of all the fraud going on with flips, etc.
We just finished a case in which a prior sale 16 months before the 2001 appraisal of a brand new home was not analyzed. Remember the absolute of 12 months. The sale in 2000 was below $300K and now we get not one but two appraisals over $500K in a market in which prices had hardly budged!
While the 12 month period had passed, that prior sale was absolutely "relevant" data and SR 1-4 requires the analysis of all relevant data. However, it was not specifically "spelled out".
Frankly, I think that this reporting is the measure, in part, of the really good appraiser vs. the lazy appraiser. And, I guess, each pro must make up their own mind on this. Suffice to say that the "added" work load to write a paragraph of explanation is not so onerous as to bite into their incomes. In fact, the bigger hit to income will come when the market slows and clients really get to pick their appraisers more carefully and deny work to the lazybones and give it to the good ones.
We reap what we sow.
Janet,
I have NEVER claimed to be a reasonable man!
Brad
It belongs in a report, not considered "typical" and forgotten due to that.
