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Do reviewers need to support

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Ray Miller

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Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Do reviewers need to support there conclusions with in the review they are doing?

1. Can they say the comparables you used are not the best. That there are others in the area that would work better, with out stating what those others are and why?

2. Can a reviewer make general statements about a report they are reviewing and not support those statements.

3. Can a reviewer state on one page they agree with the report and value and on the last page say they don’t in there summation?

We will start with these and I may add more questions later?

4. Can a reviewer use data that was not available to you at the time you did the report in reviewing your report?
 

TEL2002

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Joined
Jan 16, 2002
Professional Status
Retired Appraiser
State
Louisiana
In my opinion they can do anything they want...however, it would not be very credible.

IMO

1 - NO

2 - Depends upon the statement. I would think any statement would have to be supported by the data within the review.

3 - NO, you can't have it both ways.

4 - YES - was the data available? It is the appraiser's job to find that data and use it. I believe the magic words are 'available in the normal course of business'. If the data was NOT available until after the appraisal date, I would say no they could not use it. They should be pretending they are in the appraiser's shoes. If the appraiser does not have something that they should have (MLS as an example) it is his/her problem...they are supposed to have it.
 

Elliott

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Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
A review has the same standards as an appraisal. It is
expected to be a fraction of the cost of the original
appraisal (1/4 to 1/2). The expectation is that the
review will agree with virtually everything in the original
appraisal. If the reviewer disagrees with the appraisal,
they are expected to produce a new, supportable appraisal,
preferrably with new comparables (so at this point the
reviewer is doing a review and appraisal for the a fraction
of the fee for an appraisal).

I have for the last 10 years enjoyed telling anyone who has
requested a review, "I'm sorry, I don't do review work."

Ray, if this is a question about a board reviewer, then the
answer to all your questions is, they can pretty much do
anything they want to get a fine or suspension, and only
a judge or admin law judge can right the ship.
 

George Hatch

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Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Do reviewers need to support there conclusions with in the review they are doing? You know the answer to this.

1. Can they say the comparables you used are not the best. That there are others in the area that would work better, with out stating what those others are and why?
SR3-1.g says "develop and opinion as to whether the analyses, opinions and conclusions are appropriate and reasonable, given the reviewer's scope of work, and develop the reasons for any disagreement. " Bold added for emphasis.

SR3-2.d requires the reviewer to "state the opinions, reasons and conclusions required in SR3-1.d (among other sections), given the reviewer's scope of work". A reviewer can't say something like that in a review report without backing it up.


2. Can a reviewer make general statements about a report they are reviewing and not support those statements. See above

3. Can a reviewer state on one page they agree with the report and value and on the last page say they don’t in there summation?

We will start with these and I may add more questions later?

4. Can a reviewer use data that was not available to you at the time you did the report in reviewing your report?

SR3-1.c includes a comment:

"The appraisal review must be conducted in the context of market conditions as of the effective date of the opinion in the work being reviewed. Information available to the reviewer that could not have been available to the appraiser as of or subsequent to the date of the work being reviewed must not be used by a reviewer in the development of an opinion as to the quality of the work under review. "

"The reviewer may use additional information available to him or her that was not available to the original appraiser in the development of his or her value opinion, however, the reviewer must not use such information as the basis to discredit the original appraiser's opinion of value."


These issues are addressed in black and white (or maybe it's red), in SR-3. Anyone who is reviewing should be familiar with these requirements.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Do reviewers need to support there conclusions with in the review they are doing?

It depends.
If the report is restricted and the level of analysis included in the report is consistent with the engagement agreement and reporting expectations, then not all the analysis need be provided in the written review report.

The reviewer's opinions need to be credible given their SOW. That is always the case.
To the degree that they detail their analysis in their report could be significantly different from what a mortgage-origination appraisal may be required to detail.

1. Can they say the comparables you used are not the best. That there are others in the area that would work better, with out stating what those others are and why?
They could. It depends what their engagement agreement requires their level of reporting to be.

2. Can a reviewer make general statements about a report they are reviewing and not support those statements.
The statements must be supported. They do not necessarily need to be supported in the review report.

3. Can a reviewer state on one page they agree with the report and value and on the last page say they don’t in there summation?
I don't know what this is in reference too? But, if you are saying can they agree with the value and then conclude a different value, the answer is it depends- this happens all the time when the reviewer has a different effective valuation date or valuation SOW.

We will start with these and I may add more questions later?

4. Can a reviewer use data that was not available to you at the time you did the report in reviewing your report?
It depends what you mean by "not available to you". If it was generally available to others (your peers) in their normal course of business, then it can be used in the review. If it wasn't available in the normal course of business to you or your peers, then it cannot be used in forming their (the reviewer's) opinion about the quality of your work.
It can be used, however, in forming their own opinion of value- especially if the review effective date is different from the original report under review.

Ray-

I doubt if my exceptions make any difference to your situation. But when these issues come up on the forum, I see a lot of misunderstanding about what a review is all about (not by you, but by many).

A review has one required and usually one additional component.
The required component is to form an opinion of the quality of another's work. This must always be done in the context of the market and data available as of the effective date of the report under review.
The second component (review value) is where there can be a wide latitude; a review can have a completely different SOW for its value than what was done in the original report (including effective dates) and therefore can arrive at a value significantly different from the original report even when the original report's quality is found to be acceptable.

What Is the quality of the report under review? A must answer question.

What is the reviewer's opinion of the original report's market value conclusion? That can depend on a lot of different factors and can be completely independent of the original report's quality rating.
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
  1. No - (imo a serious error).
  2. Probably not.
  3. Interesting question. Only Std 5 requires appraisers to make sense. Always been a pet peeve of mine.
  4. Depends on what you mean by “use” and “not available.” Is that not available because you don’t have MLS or not available because the transactions or demographic changes had not occurred on the effective date?
 
Last edited:

Midwest Guy

Senior Member
Joined
Dec 12, 2006
Professional Status
Certified Residential Appraiser
State
Missouri
USPAP has warnings all over the place about being misleading. I disagree!
:beer:

[*]Interesting question. Only Std 5 requires appraisers to make sense. Always been a pet peeve of mine.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
1. Can they say the comparables you used are not the best. That there are others in the area that would work better, with out stating what those others are and why?

  1. No - (imo a serious error)
I happen to strongly agree that this is a serious error even though it may not be required given the engagement agreement and reporting requirement to the client. I've never made such a statement without providing my examples of what I thought were better.

The other thing I advocate is that if the review is going to be given to the appraiser of the original report (which I don't have a problem with) the entire review including the SOW be given. Too many times the feedback to the original appraiser is something like
"The reviewer said the appraisal was poor, cut your value, and wants you to provide three more comps."
The appraisal may have been rated poor, the reviewer may have concluded a different value and the reviewer may have recommended that a reconsideration of the original report be appropriate if additional sales are considered (this goes into SR-4/5 as you, Steven, have pointed out to me). But those conclusions are made to the client; they are not some "edict" that comes down from the review appraiser to the original appraiser.

Needless to say review and origination appraisals have one thing in common: They are not all created "equal" in terms of quality and nothing I am saying excuses a poor quality review.
 

Lawrence R.

Senior Member
Joined
Mar 27, 2007
Professional Status
Certified General Appraiser
State
South Carolina
Do reviewers need to support there conclusions with in the review they are doing?

1. Can they say the comparables you used are not the best. That there are others in the area that would work better, with out stating what those others are and why?
The short answer is yes they can. Now, if it is up to a third party to decide, like a court, then with no support, it becomes a battle of credentials, who is more credible? I would think it would be a weak position in a court of law to have no support in your report for a statement like that.

2. Can a reviewer make general statements about a report they are reviewing and not support those statements. Again, yes, you can, but without supporting documentation it would be a black eye on the reviewer.

3. Can a reviewer state on one page they agree with the report and value and on the last page say they don’t in there summation? Sure, why not--but again contradictory statements will be fish food in a court of law.

We will start with these and I may add more questions later?

4. Can a reviewer use data that was not available to you at the time you did the report in reviewing your report? I guess they can use them to develop their opinion of value(I think George mentioned that too), but that resulting value can not be used to impeach your findings.

That's my take on it.
 

Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
  1. Depends on what you mean by “use” and “not available.” Is that not available because you don’t have MLS or not available because the transactions or demographic changes had not occurred on the effective date?
_______________________

It had not been entered into MLS or public records at the time of the original appraisal.

-----------------------------------------------------------------------


reviewer used sales as comparable that were older, more distance then the ones I used. Is this correct? OR a matter of opinion which to use. In some cases the subject comp was two years old. This was in early 06 and the market was still moving upward in this submarket.

In the review the appraiser has four comparables in the grid, but on the map shows 7 locations and has pictures for 7 comparables. Is this correct??

Is this a good review with what I have presented?


--------------------------------------------

Scope of Reviewer's Work:

In completing this Review, I have read and analyzed the Appraiser(s)' appraisal report, but I have not independently verified the daata contained therein, and I have not collected additional data. My Review has been confined to a desk review; I have not inspected the subject property nor the slected sales. I haave specifically assumed that the data contained in the work under review is true and accurate. The scope of work is considered sufficient to provide a reliable opinion of the Appraiser(s)' value opinions. No data which was discovered and which was thought to be highly relevant to my opinion was omitted from this Review report. My opinion is that the scope of this Review report is sufficient for the purpose and function of this Review report.

Does this make sense. How can one not verified the data contain in the report and not collected additional data if you are doing a review and find fault with the original appraisal?

Is the use of Fannie Mae Forms proper for a Desk top or FR for the department of Reg and Lic.? The fannie forms and certs talk a lot about lenders.

Can the reviewer say in one part of the report I did inspect the property and in another part of the review say they did not inspect the property? If they did this would it be a misleading review or would it not?

 
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