Did I make a huge mistake? Accessory unit?

[mark hurlock]

Thank you, I will be checking back for sure. They said my meeting will be at the end of March, so I have a little while to prepare my defense.

Although I would be mindful that I may have made an error, I would not assume the position just yet.

Go back and familiarize yourself with your work file and get back in the frame of mind you were in when you prepared this report.

Once you are familiar enough to provide details, let us know why you made the decision to include the GLA.

First thing is, did you indicate by checking the appropriate box, accessory unit?

Did you properly describe the unit like the case study describes?

Were there adequate comparables of similar units?

Why did you chose the particular comps you chose?

Why did you overlook others?

Were the comps interior, attached or detached?

How was the GLA reported for the comps? Etc.

I want to know how YOUR market views these types of properties before I weigh in.

 

[Michigan CG]

I would not ask for the other guy's work when the problem is yours no matter what. The other appraisal has nothing to do with your error except that it caused someone to really look at your work. Expressing an opinion about the other appraisal could expose you to more trouble and it does not dovetail with your plan to be humble and accepting of your error.

I completely agree with the above. The other appraisal, even if it was written on a napkin, has nothing to do with your error. Asking for or even REFERRING to the other appraisal would come across as defensive.

The good thing is you did not do anything intentional but what you did is not acceptable appraisal practice.

You say this is a large lender but you are having a meeting. Is it a meeting in person? I think the best route is to be very humble and hope for the best; you made a substantial mistake but so did the people who "reviewed:" the report and who made the loan. Your main goal is to make them feel good about you so they don't turn you in to the state. In general if people think you are decent and sincere they are less likely to do so. If they think you are defensive and a jerk they could certainly take that route.

In hindsight it is always best to be absolutely sure that you know, without doubt, what you are doing.

I am sure you will get substantially more advice on this over the next couple days.

 

[Michigan CG]

They said that was when they have the next disciplinary panel meeting. It is a large nationwide firm that deals with many appraisals. They told me over the phone today that on Monday I would be getting a detailed letter informing me of my probation and the meeting.

Big national firm....meaning big national AMC? If so, they are in just as deep as you.

 

[Tharax]

Thank you guys.

I did check the box for 1 unit with accessory unit on the first page.

3 of my comps had in-law suites, however 2 were attached and the other was a basement, none detached like mine. I described the unit as being detached with separate HVAC. The comps included the in law in the GLA (with the exclusion of the basement suite), but now I know that was because it was attached.

Comparables were very hard to come by, none of which were applicable and had a similar detached unit.

At the time I had never dealt with that before, and because the unit I was looking at had all the characteristics of being GLA (other than being detached from the main unit, which I did not know was a requirement) I included it. When I was looking at the property, I saw this extra unit with a full HVAC system, kitchen, bath and bedroom, that was perfectly usable, in just as good condition as the subject C-3 and I figured, "why wouldn't this be GLA", in my opinion this living area was just as valuable as the main house.

Not that it matters, but what I'm thinking the other appraiser did was just count the accessory unit as worthless since comparables are so difficult to find in the area.

The meeting is between their review panel of appraisers, I am just to send my defense and they will review it and let me know what they decide.

 

[TJSum]

What does the zoning allow for the subject. Is the second detached unit legal? Very few neighborhoods in Maryland would consider this legal use. If it goes against what zoning permits then you also have another problem to deal with. Maybe the second appraiser took that into account when coming up with a much lower value for the subject ???

 

[Michigan CG]

Thank you guys.

I did check the box for 1 unit with accessory unit on the first page.

3 of my comps had in-law suites, however 2 were attached and the other was a basement, none detached like mine. I described the unit as being detached with separate HVAC. The comps included the in law in the GLA (with the exclusion of the basement suite), but now I know that was because it was attached.

Comparables were very hard to come by, none of which were applicable and had a similar detached unit. ...................The meeting is between their review panel of appraisers, I am just to send my defense and they will review it and let me know what they decide.

Why didn't you tell us this before?

So you did compare apples to sort of apples. Forgive the forum for assuming the worst, as that is sometimes what we ASSume. But if you are a lurker here then you already knew that.

You compared the subject to other properties with accessory units, sort of.

I think your best avenue is to contact a couple people you have high respect for to see what they think of the report and have them tell you honestly what they think.

I am thinking out loud here..........what was the highest and best use of your comparables?

Could we be looking at maybe you came in at a reasonable value and your only mistake was combining GLA?

At this point maybe you do need to see the other report. I dunno.

I think you need a couple eyes on your report from people who know what they are doing.

 

[Tharax]

Yeah it is an in-house AMC for a big lender.

 

[Bob Ipock]

See action # 2

http://www.ncappraisalboard.org/disciplinary/Disciplinary Action Summary.pdf

 

[mark hurlock]

Thank you guys.

I did check the box for 1 unit with accessory unit on the first page.

3 of my comps had in-law suites, however 2 were attached and the other was a basement, none detached like mine. I described the unit as being detached with separate HVAC. The comps included the in law in the GLA (with the exclusion of the basement suite), but now I know that was because it was attached.

Comparables were very hard to come by, none of which were applicable and had a similar detached unit.

At the time I had never dealt with that before, and because the unit I was looking at had all the characteristics of being GLA (other than being detached from the main unit, which I did not know was a requirement) I included it. When I was looking at the property, I saw this extra unit with a full HVAC system, kitchen, bath and bedroom, that was perfectly usable, in just as good condition as the subject C-3 and I figured, "why wouldn't this be GLA", in my opinion this living area was just as valuable as the main house.

Not that it matters, but what I'm thinking the other appraiser did was just count the accessory unit as worthless since comparables are so difficult to find in the area.

The meeting is between their review panel of appraisers, I am just to send my defense and they will review it and let me know what they decide.

I will likely take some abuse for saying this but,

Based on what you just posted, I would say it is a judgment call how you reported the subject GLA because your comps were interior and attached units with the GLA included.

If you had no similar detached units and no way of separating the comp's GLA, what were you supposed to do? If this was properly explained and the underwriter accepted your method???????

As long as you did not deliberately overlook more suitable sales that would indicate a different value, or intentional mislead the client, I would defend your report.

In a humble manner that is. Explaining why you did what you did is your defense. It is called a complex assignment that can require methods outside the box.

You just might discover the other appraiser gave the unit NO value at all and according to the sales you have, they would be wrong.

If that is the case, it is just a shame the borrower drug you into this the way it happened.

 

[redfish]

Based on what you have written thus far you openly disclosed the presence of the accessory unit and you did not intentionally mislead the user of the report in the appraisal. The exhibits in the appraisal report clearly show the area as detached, photos are not taken in a manner to mislead and in your description of the property you clearly state "in my opinion the detached accessory unit is......and is included in the GLA determination for the subject for those reasons".

You have also included other properties with "in-law suites" but those areas have different configurations or characteristics. Did you include the in-law suite area in the basement in the GLA for the comparable that had that feature, or did you include the area of the attached in-law suite in the GLA for that particular comparable. If you treated other in-law suite areas (size) the same as you treated the subject's additional feature you may be able to soften the blow of your error in front of the panel.