Contract Price

[J Grant]

But you know that the appraiser will be conditioned to revise the OV because the contract price changed !!! Lol

The appraiser should not revise their opinion of MV because a contract price changes.

 

[ZZGAMAZZ]

Do the appraisal with the price indicated as "TBD" (to be determined). Submit it and wait for the revision request once the contract has been negotiated and properly executed. Describe what you're doing & why in the contract analysis section. Not all loans are going to be sold on the secondary market, by the way. They could be holding the loan in-house and simply want the appraisal reported on forms that they are familiar with.

I don't think characters can be reported in a UAD cell meant for numbers. Maybe I'm wrong but I don't think the XMXL function will accept a report if the contract section isn't populated.

 

[gregb]

Well the number 0 (zero) reflects the result of the contract analysis.

 

[CGinMN]

When you analyze the contract provided, your summary will state something to the effect of, no price has been set and the price will be determined by the results of this appraisal. I don’t like it because this isn’t the isn’t the intended use of the appraisal, and the buyer and seller aren’t intended users. Of course, this is outside your control and you can complete the appraisal without an amendment, but is feels like tacit approval to use your appraisal for a non-intended use.

 

[Joe Flacco]

That's a good point.

 

[Mike Ault]

I don't think characters can be reported in a UAD cell meant for numbers. Maybe I'm wrong but I don't think the XMXL function will accept a report if the contract section isn't populated.

They don't need an XML unless they're selling it on the secondary market. If they intend to do that, they will send you a revision request with a fully executed contract to go along with it. This actually happens more often than you might think. Plenty of borrowers want a real appraisal that's not influenced by the contract price, and want to know what the appraiser thinks it's worth without that information. The lender will accommodate them by ordering it in precisely such a manner, and then once the deal is agreed upon and the borrower decides to proceed with the loan the contract information is disclosed. If for some reason they absolutely have to have an XML without a contract, you can always put in a $0 amount, submit the appraisal as requested and not lose one night's sleep over it.

 

[Mike Ault]

When you analyze the contract provided, your summary will state something to the effect of, no price has been set and the price will be determined by the results of this appraisal. I don’t like it because this isn’t the isn’t the intended use of the appraisal, and the buyer and seller aren’t intended users. Of course, this is outside your control and you can complete the appraisal without an amendment, but is feels like tacit approval to use your appraisal for a non-intended use.

Why wouldn't establishing market value to determine if the interested parties want to proceed with a transaction be an intended use? That's the client's intended use for the appraisal.

 

[djd09]

Based on the other thread of the same subject, this is a for sale by owner, interfamily transaction to a relative....non-arms length....

really two threads...he/she/it should contact a lawyer for legal advice

 

[CGinMN]

Why wouldn't establishing market value to determine if the interested parties want to proceed with a transaction be an intended use? That's the client's intended use for the appraisal

Because it’s hardwired on the form that the intended user is the lender and the intended use is mortgage. Sure you can add the buyer and seller as intended users, and you can say it’s also to establish purchase price. But the report is supposed to be written to the intended users understanding and the 1004 is designed for underwriters. This of this this way, if the buyer and seller approached you to do an appraisal to establish purchase price, would you use the 1004? Most would say no way.

Ultimately it’s a business decision, and if the lender is asking for you to do it, and you’re comfortable with it, go for it. When we get these requests we don’t forward them to the appraisers, we tell the parties they need to come us with a number, then after the appraisal is received they can adjust the price however they want.

 

[Mike Ault]

Because it’s hardwired on the form that the intended user is the lender and the intended use is mortgage. Sure you can add the buyer and seller as intended users, and you can say it’s also to establish purchase price. But the report is supposed to be written to the intended users understanding and the 1004 is designed for underwriters. This of this this way, if the buyer and seller approached you to do an appraisal to establish purchase price, would you use the 1004? Most would say no way.

Ultimately it’s a business decision, and if the lender is asking for you to do it, and you’re comfortable with it, go for it. When we get these requests we don’t forward them to the appraisers, we tell the parties they need to come us with a number, then after the appraisal is received they can adjust the price however they want.

And therein lies the problem. That requires the borrower to pay for two appraisals, one for their purpose and one for the lender. That makes us all look like we're participating in a shakedown scheme to get as much money as we can from them. In an ideal world, the first appraisal ordered by the lender would be submitted on a GP form and then a new appraisal would be ordered and completed on a mortgage lending form. In the real world, probably millions of appraisals for uses other than mortgage lending have been completed on the URAR form (hopefully with modified certifications appropriate to the assignment). There isn't very much information hardwired into that form that borrowers couldn't understand as long as the report contain sufficient addendum's explaining all the "degreed words".