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Corrections that Impact Value

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Brad in SAC

Freshman Member
Joined
Jan 25, 2002
I appraised a property which was presumeably on .8 acres. I verified it with two sources, however, more reliable sources tell me it is only on .6 acres. Assuming I can verify this, how do I reconcile this when a new value should be assigned?

What is the process to correct an appraisal report and change the value estimate based on new information recieved with reguard to site size?

Can this be done with an addendum?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
#1: If you don't have a current survey, always make the "Site Information Subject To Current Survey."

This is a tough one on how to correct what's already out there. I have acouple of ideas on how to go about doing this, but will wait for others here that maybe have been through something like this.
 

Paul Ness MAI

Member
Joined
Jan 14, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
Request the customer return the appraisals and prepare new ones. But...does your market data reflect a difference between a 0.6 acre site and a 0.8 acre site?
 

Brad in SAC

Freshman Member
Joined
Jan 25, 2002
No question, .6 acres compared to .8 acres, a definate difference in value. What people are willing to pay here in California for a little land, you would think it was gold.
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
My thoughts exactly, Paul. Around here it would be extremely unusual to find a measurable market reaction for the difference between .60 and .80 acre for a residential site.
 

David S. Roberson

Senior Member
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Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Sorry Brad, you answered my question before I could get it posted!
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
OK, my thoughts are that with EDI, there is no way to get all copies of the appraisal back so recalling it is almost useless.

Under this circumstance, I would make the corrections in the original, put CORRECTED either in the line above/below your file number or assign it a new file number; use the same effective date; signature date is new.
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
First step, call the client. Tell them what has happened. Ask if they have been furnished anything such as a survey that would double check this. Telling them now, before it creates a bigger problem would be a much appreciated heads up.
 

Will Trueheart

Sophomore Member
Joined
Feb 18, 2003
Brad,

Tough spot but we've all been there one way or another. These type of errors are easily corrected and aren't that big of a deal. Suggestions listed above are good but in addition I would suggest that when you sign the appraisal note in the date appraised, if possible, "revised" and also make a notation on date signed. Also, note in your file the date and person with your client's firm that you informed of this correction and if possible ask them to fax back a signed form disclosing the revised appraisal (just make the form out so all they have to do is sign and fax)

This report then supersedes the orginial and with the steps taken from other posts would resolve the issue from any legal or USPAP issue.

Good luck.
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
If I remember correctly USPAP addresses this and you are to notify the lender of the error ASAP.

*before sending this I searched my PDF copy of USPAP and I can not find anything on this. I thought it was addressed but if so I can not find it.*

If it were me I would send them a certified letter and attach the receipt to your copy of the letter. Put in your work file just in case. Thats your CYA that you notified them.

If it was a Electronically sent appraisal I would alter the appraisal and make a note in the appraisal of the correction. Then send them the corrected file along with an email stating basically what you told them in you snail mail letter.

At that point I think you have done all you do. The ball is their court and you have proof that you notified them.
 
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