Contract Price

[Surf Cat]

And to the folks crying that 'it's not fair to have to pay for two appraisals' - they're not. Anyone in their right mind is not going to replicate all of the steps from start to finish for the 2nd appraisal. They're going to change forms, copy and paste, and change the signature date. I'd probably charge $100 for the 2nd iteration.

It would just make it all so much easier.... eliminating all that commentary of trying to explain and conform with Fannie guidelines, USPAP, the certifications within the report..... what a nightmare.

 

[alebrewer]

yep - and it would be done the correct way. At the end of the day, though, everbody's gonna do what they do.

 

[Mike Ault]

The intended use was never spelled out as determining a contract price.

I am developing an opinion of market value. The parties are free to set a contract price on it, or decide not to proceed, whatever.

The intended use is what the users might do with the appraisal, not what the appraiser is supposed to do.

The intended use of the appraisal affects what the appraiser is supposed to do. There's numerous other things appraisers are supposed to do other than determining market value, those "assignment elements" are not interchangeable either. Far from it.

 

[ZZGAMAZZ]

USPAP 2020-21 FAQ #153
REVISION TO THE CONTRACT PRICE

Question: I recently completed an appraisal for mortgage financing purposes in a purchase transaction and delivered the report to my client. My opinion of value was less than the pending sale price. One week later, the buyer and seller renegotiated the contract agreeing to a price equal to my appraised value. My client asked if I can provide a revised report wherein I replace the prior sale price with the newly agreed-upon sale price. How can I do this and comply with the requirements of USPAP?

Response: The appraiser may not simply replace the pending sale price information in the appraisal report and resubmit the report to the client, as this would be misleading.

Under Standards Rule 1-5(a) the appraiser is required (when the value opinion to be developed is market value, and if such information is available to the appraiser in the normal course of business) to “analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal.”

If the new contract information is stated in a revised report, the appraiser should note that the second contract was provided after the effective date, and the information regarding the contract that was in place as of the effective date must remain in the report. Further, the revised report must have a new report date, as of the date the revised report is transmitted to the client.

Why doesnt say new filename, just new sig date? Isbtgat implied?

 

[sputnam]

OK.

So what happens when the lender demands that the appraiser update the report to reflect the contract price?

What are the chances that the report will be accepted by the GSEs without a contract price?

Now the appraiser is in a catch 2020.

Who knows..maybe the computer will accepted it. Highly doubt it.

If I remember correctly, the nc board stated that the contract price should not be updated after the effective date and that only a statement can be added.

FHA is big on this one too. The contract section cannot updated after the effective date.

So what, leave it blank? Try uploading that to the GSEs....

Like it or not, this is their rules and game. If you don't agree, do private work or the borrowers and sellers can pay cash or go hard money route. You don't get to pick and choose which guidelines you are going to follow.

What happens in my shop is.. that the Lender is politely told to pound sand. As of the effective date of the appraisal and as of the date of the report... there was no contract price. They want a revision based on things that happened after the report was delivered and which were out of the appraiser's control... they pay.

That's right... all that can be done is a statement added.

Not doing what a Lender would like you to do can cost you business. Not following USPAP can cost you your license. You decide for yourself. I default to USPAP.

 

[J Grant]

What happens in my shop is.. that the Lender is politely told to pound sand. As of the effective date of the appraisal and as of the date of the report... there was no contract price. They want a revision based on things that happened after the report was delivered and which were out of the appraiser's control... they pay.

That's right... all that can be done is a statement added.

Not doing what a Lender would like you to do can cost you business. Not following USPAP can cost you your license. You decide for yourself. I default to USPAP.

USPAP allows revisions to the appraisal after the effective date, and the contract can be changed as well ( whether price, terms etc ). The appraiser is supposed to comment and disclose the original price or terms (in this case that there was no contract price on the effective date )

As far as any fees for revision, that is a business decision. If a client rarely asks for revisions of this kind I would not charge for it, as it is an expectation that if the parties agree on a price the lender would come back and ask for it to be added to the appraisal contract section.

 

[sputnam]

USPAP allows revisions to the appraisal after the effective date, and the contract can be changed as well ( whether price, terms etc ). The appraiser is supposed to comment and disclose the original price or terms (in this case that there was no contract price on the effective date )

As far as any fees for revision, that is a business decision. If a client rarely asks for revisions of this kind I would not charge for it, as it is an expectation that if the parties agree on a price the lender would come back and ask for it to be added to the appraisal contract section.

Yes... you can do it either way and stay within USPAP. You can change the contract information in the contract section and add comments regarding the original contract.... or... you can do it the other way around. USPAP doesn't care.

 

[Tom4value]

Per USPAP, you are required to analyze and comment on any agreement of contract. State and comment what you find. Then provide an opinion of market value of the property. The lender will determine if they can lend on that.

 

[ZZGAMAZZ]

The OP said they have a URAR appraisal, so I am answering with that in mind.

I would not do two appraisals if the lender was my client, I would do one appraisal on the URAR form, state that the parties do not have a contract price because they plan to base it on the appraisal value, and turn it in. If in a week or whatever the lender wants me to add the contract price as a revision, then I would do that and comment on it.

Possible out of context, but....would that require the report being conditioned "subect to" te price being provided????

 

[ZZGAMAZZ]

OK. The contract price was not technically left blank.

A price was said on the contract....the contract price will be the appraised value.

Fueling the flames....

Please clarify your comment that ".... the contract price will be the appraised value." It sounds like you are implying an inherent correlaation between the two values although that's obviously not true, although the two might coincidentally be identical. Thanks,