Do you Have A Threshold % For Answering No To Question 10?

[Ray Miller]

If you gave four appraisers the same assignment, will all four come up with the same opinion of value????

In review it just not the line item point of value, but the support given to get there as others have said.

I too would like to see a range of value opinion as acceptable for an appraisal practice.

 

[Mztk1]

I don't really know what the answer is because it would depend on the market.

If I am in a highly conforming PUD project and the appraiser is off by 3% using the best comps available because he never called the agents involved to find out every sale used was part of the Nehimiah or AmeriDream program, I'd disagree with the value, regrid them, and come in 3% lower.

But if I am reviewing an appraisal like the one you have that is for $1,450,000 and my numbers are coming up with $1,392,000 or maybe even $1,421,000 with comps range from 1.1 to 1.6 (or are inclusive of the $1,450,000), I think I am just going to be commenting on the adjustments made, that they are unique and inconsistent, but then agreeing with the value. If it is an obvious push I would likely comment that the adjustments appear to made in a way to appraise the house at the upper level of the value range, but the appraised value still appears reasonable.

I am not big on reviews. Some lenders are very good about wanting quality reports and look for quality reviews, especially the lenders I work with; however, the report seems to be written in a way to simply acheive the end of having two appraisers on the hook for the opinion of value. Maybe I am just paranoid.

 

[The Warrior Monk]

Is the assignment

1. do a review of an appraisal to determine if the value conclusion is credible based on the research and analysis contained in the report; or
2. do you own appraisal and see if the value in the report under review matches yours?

 

[Metamorphic]

Is the assignment

1. do a review of an appraisal to determine if the value conclusion is credible based on the research and analysis contained in the report; or
2. do you own appraisal and see if the value in the report under review matches yours?

Seems like if the client asks for a 1032 they're asking for #1. I think if the wanted #2 they'd just ask for another appraisal or perhaps a drive by with the building sketch, descriptions and pictures of the sub. as "provided data to be considered true".

Problem with this guy is his value conclusion is borderline credible ("accurate") but his research and analysis is absent. This wouldn't be nearly as hard if he'd thrown me a bone and written a short sentence about what each adjustment was based on.

I did a same market segment house around the corner from this one a couple months ago so I've got all the stuff to do the full appraisal. Heck. I'm only doing this for the hours so maybe I should just disagree and do the whole enchilada.

 

[Metamorphic]

If it is an obvious push I would likely comment that the adjustments appear to made in a way to appraise the house at the upper level of the value range, but the appraised value still appears reasonable.

I dont think this is an gratuitous "I'll get you any number you want" push. Maybe more like a "benefit of the doubt-refi" push; or maybe with the range of value he got from his comps he just ene mene mini mo 'd a little high.

 

[Fred]

There ya go, this is the answer because almost all lender so-called "review" assignments are indeed two assignments within one; review and an appraisal.

You are on to something, but remember the term "assignment" refers to a large container that can contain an unlimited number of reviews, appraisals, feasibility studies, and who knows what. There may be more than one type of work within an assignment, but not two assignments in one assignment.

 

[Metamorphic]

I too would like to see a range of value opinion as acceptable for an appraisal practice.

I can see doing point value for a primary assignment, but for a review you really need either a set acceptable tolerance (within x% +/-), or a range based on the vagueries of the data.

Actually a client set % would be valuable. When they give you the assignment they could assign the %. If they say 2%, going in you pretty much know you're doing Section II and can price the job accordingly. If they say 20% you can give a low price and if you end up having to do Section II, you'll at least have the privilege of turning in a bad appraiser to the board to make up for the lousy fee you recieved.

 

[Fred]

I can see doing point value for a primary assignment, but for a review you really need either a set acceptable tolerance (within x% +/-), or a range based on the vagueries of the data.

There are ways to calculate the "vaguery" of the data.

Actually a client set % would be valuable

The are set ways, but they can't be set percentages of prices, because percentage of price is what will vary with the "vagueness" of the data. For example, the word "standard" in the phrase standard deviation refers to a "set" way of measuring how much something mssed by.

The world of arithmetic offers many of the answers you seek.

 

[Carnivore]

You are on to something, but remember the term "assignment" refers to a large container that can contain an unlimited number of reviews, appraisals, feasibility studies, and who knows what. There may be more than one type of work within an assignment, but not two assignments in one assignment.

Yes, of course your correct and you actually taught me to think that way. I just back-slide a little.

I find it interesting that many residential appraisers charge the same for both kinds of assignments. Lets say $125 for the review and if you disagree give your own appraisal but then you not charge more.

Seems like AMC or missing the boat here. They should pay $125 for the review and appraisal combined into one assignment. If you agree you are paid less!

Different outcomes for both scenarios on the same assignment is highly likely considering human nature?

Is that not odd or what?

 

[The Warrior Monk]

Seems like if the client asks for a 1032 they're asking for #1. I think if the wanted #2 they'd just ask for another appraisal or perhaps a drive by with the building sketch, descriptions and pictures of the sub. as "provided data to be considered true".

I had to look at the 1032 because I was not familiar with it...IMHO, it's another example of a horribly designed GSE form. For example,

"If the review appraiser determines the opinion of value is unreasonable, he or she is required to provide an opinion of value."

If the review appraiser determines that determines that the opinion of value is unreasonable, the review appraiser has performed an appraisal, so that statement is nonsensical.

That is different from determining that the value in the report under review is not supported by the data/analysis contained in that report.

Problem with this guy is his value conclusion is borderline credible ("accurate") but his research and analysis is absent. This wouldn't be nearly as hard if he'd thrown me a bone and written a short sentence about what each adjustment was based on.

If the value isn't well supported, then what that value is is not relevant. It's not supported, plain and simple.