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Estimated value

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Doug Meyer

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Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
According to AO 19 if I receive an order with an estimated value on it and it is NOT contingent upon me reaching that value, or placement of the assignment, I assume that would be USPAP compliant? I do understand that if this is a condition of the assignment, then I decline the order. How do most of you handle this issue?

I am also having my secretary blanking out estimated values on the order form, is that also proper or not?

I am looking for specific guidance on these issues.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
You are not required to comply with the AO's. They do not establish new standards or interpret existing standards............ (right at the top of every AO)

What does your state board say? At the end of the day....only their opinion count. There are no Federal USPAP police.
 

Doug Meyer

Thread Starter
Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
I do not know what the state board says on this. We do not have a published letter or any other forms of communications with the board and the appraisal populace.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Send them an email and ask for a response.


I do not mean to be flippant......but the fact is THEY get to decide....and it may differ everytime they decide.
 
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PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Doug I wont be popular .. but if you turn down every assignment like that you will not be in business. Be ethecial, do business as you should, and I wouldnt worry too much about whether someone puts a number on an order.
We have talked before you have to analize a contract but you cant have an owners estimate.

The disconnect there is idiocy. Do the business and if you get called before your board explain it. I would doubt that every one here that says they dont do that work are being honest. Its how business is conducted these days and we cant dictate what the client puts on an order form ... only what we do with the information we are provided.
 

3 Putt

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Joined
Aug 18, 2005
Professional Status
Certified General Appraiser
State
Ohio
Doug ole buddy, stop looking over your shoulder so much! ;)

VDay has come an gone, any news from your state?
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
Just a thought, it might be important for "licensed" appraisers to have this on the order form, as well as the loan amount, to know whether the assignment falls within the limits of their license. ???
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Doug,

I went to the local stamp shop and had a rubber stamp made up with this on it.

“As long as the amount is only to inform me of your objectives or someone else’s opinion and is not a condition for your placement of this assignment with me, we can proceed. However, if that amount is a condition of this assignment, accepting an assignment under that condition violates professional ethics.”

I cross out the offending information, stamp the fax and send it back for them to contemplate. Most of the time I get a confused phone call saying no other appraiser has ever done this? What are you doing? or some such response. I gently explain to them what I can and can't do, most of the time they redact the offending language/value and resubmit the request. I keep both in my workfile for evidence to the state board, if necessary.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
The EoV issue has been as frequently bantered here through the years as have the topics of comp checks, re-assigns of a prior report into another (new) client's name, concessions, and trying to get invoices paid by scum-bags who simply did not like one's value opinion because they could not "use" the report !

AO-19 goes right up there with these other discussion topics. It ought to be refined to reflect more of the very real-world scenarios experienced by appraisers with regard to bias, coercion, influence and stark suggestions....for that appraiser to deliver an end-product that compliments the client's direct and needed value and enables bias and coercion to "win". Why can't AO-19 be amended as to also state something like....."The appraiser has the full end expected RIGHT, and OBLIGATION, to IGNORE any direct bias or coercion imparted by a client, or an intermediary or agent for the client, at the time of initiating a communicated assignment and to PROCEED in developing and delivering an appraisal report which rejects such imparted biases or efforts to coerce". (Whether or not the appraiser ever receives compensation is another matter. Hence, so many have installed a pre-pay arrangement as the ONLY means to assure that unbaised results CAN be delivered without a fear of starvation or injurious ridicule.)

In a sense, I think there is other AO-19 linkage to the Ethics Rule >> Conduct >> 5th sentence >> lines 222-223. The wording of that sentence is half-baked and weak. Some other words could be added to make that sentence a bit stronger, and with enhanced instruction. There's just something about the words "that includes" which is fuzzy. Scratch those two words and insert instead,..."whereby the client expects or demands", and end that line by now adding..."as likely communicated by the client at the time of initiating the assignment". That.....should make it apparent that some assignment orders are toxic in creation, and before the appraisers eyes have read the fax or opened the email.

The bulk of problems so many experience are sourced right there in the engagement (order) process and/or then as post-report issues.....because the initial order and engagement were NOT clear enough.....and "compliant" enough !
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I am also having my secretary blanking out estimated values on the order form, is that also proper or not?
why?

I do not mind being informed if the borrower thinks its worth this or that. I can usually size that up as reasonable or unreasonable and it allows me to screen the 'deal'....Had a fellow who is city councilman, fancies himself quite the community planner because his son is an architect. He bought an old termite riddled house, is going to strip it down to frame, jack up, new foundation and floor joists, and redo into a "new" house in a neighorhood of rentals and older homes of mixed condition and vintage. Will spend about 120% of building new...Had his "estimate" at some $100 per SF when any builder in town will build new for $80 or so. I had a death in family the day that fax came in so I feigned family issues with my client and let the next poor sap argue with this plick.

Another client sends me the amt of mortgage. Had one the other day that was $1.2 million....on maybe $200,000 worth of property. Ignored it. The mortgage involved a whole bunch of other properties and its on the cover letter because that same CL goes to the title company, etc.

If you do secondary market, PE is right, you'll lose a lot of business. I don't do secondary market so its not an issue. But I still try to screen my assignments and eschew the worst ones. Unless the lender were to explicitly ask for me to meet the HO's estimate or similar then I ignore these numbers anyway.
 
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