Evaluation Liability

[Deleted member 134708]

It can be called anything. Landy was simply saying because the person was not engaged as an appraiser, they may not cover it.

Make it simple. The other example used.

A client engaged you as a "house measurer" because of your past appraisal experience. Engagement letter says nothing about engaging an appraiser. They may not cover your mistake.

They insure you in the capacity as an appraiser. When someone engages you as anything but an appraiser, house measurer, evaluator, housing market expert, typer. They may not cover you.

So, as of now, to CYI, when you do any product, make sure the sow, engagement et al says acting as appraiser. Not xyz, due to appraisal experience.

 

[BRCJR]

Call it anything you or the lender want to call it.

Bottom line-it is either an Evaluation or an appraisal, period.

 

[Terrel L. Shields]

I do not believe an Evaluation, per the IAEG, requires any type of certification or limiting conditions be included.
The Restricted Appraisal may be used in place of an Evaluation but, that does not make it an Evaluation.
Cannot have reference to appraisal in an Evaluation. If so, it becomes an appraisal.

Zackly...

The client would see the product as an evaluation. If a non-licensed or certified person developed the product, then it is an evaluation. If a licensed or certified appraisers develops the product it is technically an appraisal...and the client will still call it an evaluation.

I believe @BRCJR is absolutely correct. An appraisal is NOT an evaluation and there are things in an evaluation required that are NOT required in USPAP. And Dave Reinhold would argue that ANYONE doing evaluations at a minimum must be a registered appraiser. That applies to anyone in AR who testifies to value of anything real estate related in public, court, or for clients

The last update "evaluation" of my 40 acres cost me $175.Happy me. An appraisal would have cost $400-500. They valued it $4000/acre. 3 months later the 40 adjoining the north side sold for $5,250/acre. Not that it mattered. The note was $25k. That was half my old signature line of credit I had to close after that lender sold out. There is a huge difference in eval & appraisal quality. I saw an "eval" done for $125 on alamode GP form & the appraiser drove 80 mi. one way.

 

[Meandering]

So many BS story tellers in this thread, you need a shovel to dig your way out from under their lies.

USPAP
Standard 2-2

Each written real property appraisal report must be prepared under one of the following options and PROMINENTLY STATE WHICH OPTION IS USED: APPRAISAL REPORT OR RESTRICTED APPRAISAL REPORT.

NOT RESTRICTED APPRAISAL REPORT EVALUATION

In most (all but two) states, an evaluation done by an appraiser has to meet the requirements for an appraisal. Hence, it would be covered under the appraisal E&O, because it would have to be an appraisal report.

Standard 2 is a requirement of an appraisal.

But keep going, I'm sure ya'll will talk yourselves and others into believing it is not.

.

 

[DWiley]

So many BS story tellers in this thread, you need a shovel to dig your way out from under their lies.

USPAP
Standard 2-2

Each written real property appraisal report must be prepared under one of the following options and PROMINENTLY STATE WHICH OPTION IS USED: APPRAISAL REPORT OR RESTRICTED APPRAISAL REPORT.

NOT RESTRICTED APPRAISAL REPORT EVALUATION

Standard 2 is a requirement of an appraisal.

But keep going, I'm sure ya'll will talk yourselves and others into believing it is not.

.

There is nothing in USPAP that would prohibit one from labeling a report as a Restricted Appraisal Report Evaluation. See the FAQ about the "Summary Appraisal Report" label on all URARs,. So long as an appraiser uses the required term he or she is free to add to that term.

I live in a state with a unique state law that allows appraisers to perform evaluations that comply with the IAG, but they do not have to follow USPAP. That is not the case in most states. In most states, one has to provide an appraisal report in order to report market value. No lies there, just fact.

Even though my state allows non-USPAP compliant "evaluations," when asked for an "evaluation" I usually went the extra step and added enough to the report for it to be a USPAP compliant appraisal report. The IAG rules are like USPAP in that way - it is OK to do more than is required. So, if only an evaluation is required, one can deliver an appraisal report, as long as that report meets the IAG requirements. I opted for Restricted Reports with enhanced content (enhanced above the bare minimums of STD 2) in order for the report to comply with both USPAP and the IAG.

Please point out where anyone has suggested that appraisal reports do not have to comply with STD 2. I don't see any such post.

And, lastly, if you are going to accuse someone of lying, and then quote something from me, you had better be prepared to back it up. Put up or...

So far, I see only one post that is full of BS.

 

[PL1957]

So many BS story tellers in this thread, you need a shovel to dig your way out from under their lies.

USPAP
Standard 2-2

Each written real property appraisal report must be prepared under one of the following options and PROMINENTLY STATE WHICH OPTION IS USED: APPRAISAL REPORT OR RESTRICTED APPRAISAL REPORT.

NOT RESTRICTED APPRAISAL REPORT EVALUATION




Standard 2 is a requirement of an appraisal.

But keep going, I'm sure ya'll will talk yourselves and others into believing it is not.

.

Any valuation completed by an appraiser is an appraisal. Nobody is denying that.

The appraisal needs to be appropriately labeled and needs to comply with all other USPAP requirements. Nobody is denying that.

Any other client specific requirements in order the meet their evaluation needs can be added, as long as minimum USPAP standards are met.

The client can call it whatever they want. It's still an appraisal.

 

[George Hatch]

The fixation on labels is a complete distraction. What's important - and which will reduce your exposure to complaints - is first finding out more/less what level of development and reporting will result in the meanginful workproduct, and then accurately disclosing what assumptions and limitations you used the assignment so that your readers can understand what you did and didn't do.

 

[Dale Floyd]

An evaluation is not an appraisal - At least it isn't in Tennessee. They are specifically called out in our law as a product designed to fill the gap for lenders to use when a compliant appraisal analysis is unnecessary. Evaluations performed in this state must state boldly in big letters on the front pages "THIS IS NOT AN APPRAISAL". Just like other non-appraisal products used for various purposes, evals are one of them.

The section in T.C.A. pertaining to evaluations was written under the direction of former lieutenant governor John Wilder who was the owner of a bank as well as being speaker of our state house back in the day. I also understand he was his banks in-house appraiser before his days in politics which was prior to the appraiser licensing laws. Smart move.

And our law specifically states an appraiser can do them just as any other professionals. Most of our customers who request them, want us to do them because we are the most sensible choice. And there are many appraisers who have served (or are serving now) on our state appraiser commission who do evaluations. FDIC, OCC, and our state Dept of Financial Institutions recognize evaluations as non-appraisal products allowed in "some" instances without any problem. In the cases they find that a non-appraisal product is insufficient, then they require a compliant appraisal to be obtained.

The fees are good, E&O does not apply because they aren't considered appraisals, and much of the red tape nonsense we all complain about does not apply.

I know some of you will pull out the clubs and bats, but there is a place for these products. They should be allowed in all states like they are here.

 

[Dale Floyd]

And - Many evaluations completed by professional appraisers that I've seen are really good. Some are more sensible than a few appraisals I've reviewed. Just sayin....

 

[George Hatch]

Appraisal is defined by what you do, not what you call it and not by the person's licensing status who did it. Full stop.