Getting Orders On Same Property By Two Different Lenders

[Gobears81]

The title sums it up. I received an order a week or so ago by a bank and another client emailed a couple of days ago asking what the turnaround time would be to do this appraisal. I quoted the same deadline as what I have for the other order, figuring that I'll end up just doing a single appraisal, with one client cancelling, but I now have two orders. I'm sure the borrower is just shopping around. There is of course the USPAP disclosure of a 3-year history to consider, but I don't interpret that as applying to orders on incomplete appraisals.
Thoughts on the best way to proceed?

 

[Overimprovement]

The wording in the 1004 form goes like this, my bold:

Unless otherwise indicated, I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

So if you have literally not even started the first report, before accepting the second, I think you would be safe in no disclosing the other assignment, but let's hear from some more learned folks!

 

[glenn walker]

I would find out who really has the order ? No buyer or borrower is paying two appraisal fee's and you are being lead down the rabbit trail to appraiser hell- and one of them is not going to not pay you. Also I would sure hate to face my State Board if the borrower filed a complaint because all your going to be doing is cloning two identical reports with different clients names on them. As far as prior service ?

I would assume you are doing one inspection unless you are going to set a separate time and date for appraisal #2 and then just pretend to be doing a second physical inspection - Is prior service considered when both are done at the same time ? I would take the safest route and disclose that I did two appraisals on the same property on the same date- But please understand you are stepping into the twilight zone because now you have two identical appraisals floating around in lender world- I Don't feel warm and fuzzy about this situation.

 

[TRESinc]

I would find out who really has the order ? No buyer or borrower is paying two appraisal fee's and you are being lead down the rabbit trail to appraiser hell- and one of them is not going to not pay you. Also I would sure hate to face my State Board if the borrower filed a complaint because all your going to be doing is cloning two identical reports with different clients names on them. As far as prior service ? I would assume you are doing one inspection unless you are going to set a separate time and date for appraisal #2 and then just pretend to be doing a second physical inspection - Is prior service considered when both are done at the same time ?

you don't know what the borrower is paying. the lender i used for my mortgage charged me a flat fee of $295 for everything up front in exchange for a slightly higher interest rate, so it is conceivable a borrower would pay that fee twice to see which lender gives them the best overall deal.

the reports would not be identical. the data may be the same but they would have unique effective and signature dates and intended users.

 

[Gobears81]

Thanks all. Just to add to the original post, this is a commercial appraisal. I am asking for advice not only from a standpoint of USPAP, but for good business practices/ client relationship. IE- should I let one or both banks know that I just received a new order (or already have an existing order)?

 

[hastalavista]

If you've received the request (an order request) but have not been engaged (you/your client have not agreed to the assignment), then I wouldn't count that as an "assignment" or as a "prior service" regarding the subject property.
If you agree and take the assignment, then IMO it would trigger the prior services identification... even if you/your client cancelled the assignment before you did much on it, by virtue of being engaged, that creates a "service" in my book.

 

[glenn walker]

you don't know what the borrower is paying. the lender i used for my mortgage charged me a flat fee of $295 for everything up front in exchange for a slightly higher interest rate, so it is conceivable a borrower would pay that fee twice to see which lender gives them the best overall deal.

the reports would not be identical. the data may be the same but they would have unique effective and signature dates and intended users.

Well now we know this is a commercial appraisal so it's not a $295.00 report - With that said I would take Denis DeSaix advice but I would sure want to know for sure I was going to be paid for both.

 

[DREA Dean]

As far as USPAP goes, I think you're in the clear. You performed no prior service on the property at the time of accepting either order, so that issue doesn't apply. I have provided quotes to two banks on the same property before, but have never actually been awarded two assignments to appraise the same property.

I strongly suspect one of the orders will be cancelled when the borrower figures out which way he wants to go. Then, you'll have to decide whether it's ethical to charge a cancellation fee for work completed to date. I really don't see an ethical or business need to notify either lender that the borrower is proceeding down the origination path with another lender. Keep us updated on how this unfolds.

 

[KONA]

You have not indicated that both appraisals are for the same purpose...lending. If so, is the borrower aware that the appraisal he contracts with you cannot be accepted by a federally chartered bank?

 

[hastalavista]

You have not indicated that both appraisals are for the same purpose...lending. If so, is the borrower aware that the appraisal he contracts with you cannot be accepted by a federally chartered bank?

Sounds like the appraisals are not being ordered by the borrower (but I could be wrong):

I received an order a week or so ago by a bank and another client emailed a couple of days ago asking what the turnaround time would be to do this appraisal.