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Contract Review - Part Two

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Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
SO MUCH FOR THE CONDUCT RULE........

INDEPENDENT, OBJECTIVE, AND IMPARTIAL.......

hogwash


May 2008 USPAP Q&A
Does Changing the Sale Price Result in a New Assignment?


AKA " THE APPRAISAL ASSIGNMENT THAT NEVER ENDS"
 
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Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
USPAP and the Appraisal Foundation:

Written and put in place by the lenders and for the lenders.

Please don't ever think this was done for the "Public Trust" as it very much appears that was just a lie.
 

Tudor

Member
Joined
Aug 15, 2006
Professional Status
Certified Residential Appraiser
State
Arizona
I like the question about MLS photo's.

Like an honest appraiser really needs to ask if they can include MLS photo's without disclosing whether they drove past the property or not.


Regarding the answer about the change in sales price. I have given that answer to clients many times and they don't like it. WTH??? how can I date the appraisal prior to the date of the contract and include the SP from that contract.

If I could tell the future, I would not be an appraiser, I would be sitting on some beach somewhere with an umbrella drink in my hand.
 

JSmith43

Elite Member
Joined
May 5, 2003
Professional Status
Certified General Appraiser
State
California
SO MUCH FOR THE CONDUCT RULE........

INDEPENDENT, OBJECTIVE, AND IMPARTIAL.......

hogwash


May 2008 USPAP Q&A
Does Changing the Sale Price Result in a New Assignment?


AKA " THE APPRAISAL ASSIGNMENT THAT NEVER ENDS"

Mike, something is wrong with the link to the Q & A. I was sufficiently curious to follow it only to get a dark gray screen for a reward.
 

Mary Tiernan

Senior Member
Joined
Dec 16, 2003
Professional Status
Retired Appraiser
State
Michigan
Hey Mentor, here is a link to The Appraisal Foundation website, just click on USPAP Questions and Answers on right, then on May Q&A's on left -

I'm sorry Mr. Kennedy, I don't see where this asks us not to be impartial - it is just information that changed - so you add commentary that original report was completed on XX with opinion of value of $zzz with information about prior PA, then add that a new PA was drafted on XX - note any other changes to PA, new seller concessions, new sale price.

The question specifically refers to the appraised value not supporting the PA. Then the original appraisal has done it's job - the new PA is drafted to coincide with the appraised value. I have done several appraisals and the PA is too high based on market conditions. I always state the PA was considered in the final analysis but the sales comparison approach to value was given most consideration.

Where does this take away my independent, impartial, objective opinion of market value????????? In fact, I have proven I am independent, impartial, and objective because I was not swayed by the Purchase Agreement when the market indicated otherwise.

I think it is interesting to note that as long as the prior effective date has not changed, no new assignment has begun.

I think this also would relate to client stipulations regarding looking at additional sales, etc. and is directly related to a prior thread regarding new scope of work - new file for minor clerical changes, etc.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
An "Assignment" comes from an "Engagement."

To All,

This is a classic, showcasing why the members of the ASB need to be involved with FAQ's need to be rotated out and quite a few of these FAQs reconsidered over again. It's not that the concept of providing an addendum regarding an appraiser acknowledging a new sales contract, without 100% repeating the entire appraisal process, is bad. That concept is just fine. What is bad here is the ASB members have focused on the wrong things. For this answer they SHOULD have focused on the definition of "Assignment" in the context that any and all assignments begin with identification of the problem, intended use, and an engagement contract. Engagement contracts, once satisfied, mean the end of the assignment per the contract. So their answer is incorrect in my opinion. I am not aware of ANY real estate appraiser that considers their engagements open ended assignments wherein the appraisers have agreed to keep doing additional work for free forever and never come to an end.

So the reality here is the client is asking for a closed assignment to be reopened when the appraiser has already met their prior contractural obligations. In my mind, to do this would require a new engagement contract to spell out the obligations of the parties to the new contractual request. Hence, this is in fact a new "Assignment."

In my opinion the ASB screwed the pooch in not pointing this out correctly and only saying USPAP does not mandate a new assignment. They failed to point out a new assignment may not neccessarily mean a new appraisal has to be done. For example, a completion certificate request is a new assignment. They are making it sound like an "Assignment" is always an appraisal. Going back, after already having satisfied a prior engagement, to provide a service regarding new information desired by a client IS a new assignment and a new engagement contract should be created for it. Hence, a fee is owed for the additional work not agreed to in the prior engagement contract.

The people answering these FAQ's need to expect all of us to want to actually run profitable businesses once in awhile versus being charities.

Webbed.

P.S. Look in the Definitions Section of USPAP. The definition of "Assignment" does not equal, or point to, the definition of "Appraisal." An assignment is a valuation service provided as a consequence of an agreement between an appraiser and a client. I think the difference between an "Assignment" and "Assignment Results" has gotten confused here. Asking an appraiser to go back and "analyze and consider" a completely new sales contract that took place after some prior effective date is asking for consulting...... a new assignment. Besides that, what the ding dong are we "considering?" Now we no longer have an independent contract between two parties we are "considering." Now we are considering and analyzing a contract that has been expressly reframed with a contract price that makes a loan work based on our own real estate appraisal.
 
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CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
I'd tell you to get a life Mike but that would be rude and unprofessonal.

The A to the Q was a good answer. In this case the contract did not affect the appraisal opinion but rather the appraisal opinion affected the prior contract and resulted in a new contract.

Your only argument against contract review is that it may bias the appraiser in such a way as to provide a misleading opinion of MV. If the appraiser is that easily influenced they have no business being in the business anyway.

If TAF retired 1-5, appraiser's would still be provided with a contract most of the time because that's what clients want most of the time. If TAF made a requirement that the appraiser was not to accept a contract, then they would have to make it a requirement that the appraiser couldn't look at MLS and have to close their ears when anybody talked about the property.
 

JSmith43

Elite Member
Joined
May 5, 2003
Professional Status
Certified General Appraiser
State
California
Mike, your link is "OK", but the AF web code does not appear to follow WC3 standards.

That's ironic:icon_mrgreen:

The link gray screens under Safari on my Mac. Safari adheres most rigidly to the web standards of the three big browsers, IE, FF & Safari.

Just for kicks, I tried Firefox and it couldn't preview the PDF either on the Mac platform, but could do so with Firefox on XP. Almost certainly a problem with their vendor taking web standards short cuts in favor of the predominant OS application, IE and/or MS OS (XP, etc):rof:

I didn't find the questions to be surprising. They seemed reasonable, under the regulatory paradigm and bureaucratic mindset facing the appraisal profession.

Eventually, questions will be asked about the behavior of buyers and sellers, and incredibly, a formulaic answer will appear. That will signal the end is near:unsure:
 
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leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I for one must by "out-of-step" because what the ASB offered as the response to the question regarding the analysis of the revised contract of sale was (and is) my position.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
I'd tell you to get a life Mike but that would be rude and unprofessonal.

The A to the Q was a good answer. In this case the contract did not affect the appraisal opinion but rather the appraisal opinion affected the prior contract and resulted in a new contract.

Your only argument against contract review is that it may bias the appraiser in such a way as to provide a misleading opinion of MV. If the appraiser is that easily influenced they have no business being in the business anyway.

If TAF retired 1-5, appraiser's would still be provided with a contract most of the time because that's what clients want most of the time. If TAF made a requirement that the appraiser was not to accept a contract, then they would have to make it a requirement that the appraiser couldn't look at MLS and have to close their ears when anybody talked about the property.


As with most ASB answers, in this example the answer is NO and YES. The new contract results in the appraiser being required to discuss the new contract and as a result there must be a new signature date. It is in fact a new assignment according to the answer, even though they say no it isnt in the first paragraph.
 
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