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Ethical Question

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Vegan702

Thread Starter
Senior Member
Joined
Feb 24, 2005
Professional Status
Certified Residential Appraiser
State
Nevada
I looked and I know its been answered before, but I just want to ask again for own sake. :) I do a lot of foreclosure work and have contemplated purchasing some of the properties I have appraised. Here is my dilemma, at what point would you cancel an appraisal if you think you might be interested in purchasing the house? Today I inspected a house and I am seriously going to think about putting an offer in on it when they put it up for sale. At this point the house isn't listed as they are waiting for my appraisal and the Realtors BPO to come back. With this company they order an appraisal and a BPO and if they are both within a certain percentage they list it at an average of the 2 amounts from what I was told. So knowing that I am at this point interested in the house, but have not done anything in regards to the appraisal besides the inspection, can I still complete the appraisal without any bias or ethical issues?
 

Lloyd Bonafide

Senior Member
Joined
Jan 15, 2006
Professional Status
Certified Residential Appraiser
State
California
Since the listing price may be at least partly based on your appraised value, I would not purchase the property if I were you. If nothing else, there may be an appearance of impropriety on your part.

There are probably plenty of REOs for sale in your area, with plenty more in the pipeline, so I would buy one that I did not appraise if I were you.
 

George W Dodd

Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Call the client and tell them you are interested in purchasing it, don't do the appraisal. Or do the appraisal and forget about buying it. One or the other but not both.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
I certify that, to the best of my knowledge and belief:

the statements of fact contained in this report are true and correct.



the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.


I have no (or the specified) present or prospective interest in the property that is the subject of this report :icon_idea:

and no (or the specified) personal interest with respect to the parties involved. :icon_idea:



I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. :icon_idea:
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
or Prospective Interest in the property being appraised says it all. I would not do both.
 

Vegan702

Thread Starter
Senior Member
Joined
Feb 24, 2005
Professional Status
Certified Residential Appraiser
State
Nevada
I need to find the line so I don't cross it. A few years ago I purchased a rental property that I had appraised for a purchase. At the time I had no interest in it, but the property fell out of escrow. I had commented to the agent while doing the inspection that it was a very nice house and wished I had seen it for sale as I would have put an offer in on it. When it fell out of escrow she called me up and I bought it. So in that situation I felt I was clear of any wrong doing. If I were to appraise one of these foreclosures and then waited say 30 days to let others put offers in on it, do you think that would clear me of any improprieties?
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I need to find the line so I don't cross it. A few years ago I purchased a rental property that I had appraised for a purchase. At the time I had no interest in it, but the property fell out of escrow. I had commented to the agent while doing the inspection that it was a very nice house and wished I had seen it for sale as I would have put an offer in on it. When it fell out of escrow she called me up and I bought it. So in that situation I felt I was clear of any wrong doing. If I were to appraise one of these foreclosures and then waited say 30 days to let others put offers in on it, do you think that would clear me of any improprieties?

Vegan702, you're making effort to skirt one of your certifications!

Don't do it.

IF a question were to ever arise regarding your purchase of a property that you had recently appraised as an REO, what do you think would be in the minds of anyone who knew of what you had done?!?
 

Jerry Bone Jr

Senior Member
Joined
Feb 23, 2004
Professional Status
Licensed Appraiser
State
Oregon
"I have no (or the specified) present or prospective interest in the property that is the subject of this report"
IMO, the "present" means, do you presently own it. The "prospective" means, do you have a pending contract. The "prospective" does not mean, do I have an interest in purchasing the property.
I have been wrong before.
Vegan, If you're concerned about crossing the line, then you probably are. A simple statement in the report could solve your problems. Yes, do the appraisal. Just make sure to disclose your intentions.
 

CCAAMO

Senior Member
Joined
Sep 17, 2007
Professional Status
Certified General Appraiser
State
California
What about the fact Vegan702 obtained the information concerning this property via an appraiser client relationship? I think this is where the ethical problem.

My answer is that since you already did the inspection, you should not be involved in any purchase of the property.
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I wouldn't do it. there's plenty of other fish to fry. :shrug:
 
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