GPAR Vs. URAR Limiting Conditions

[Eli Weiss]

I did a GPAR appraisal today, and while reading the Limiting Conditions I liked parts of it over the one included within the URAR....

Does anybody know why these aren't included with the URAR Limiting Conditions?
And can I add them myself to the addendum?

Here is the part I liked, its well written and to the point.

The appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The appraiser assumes no responsibility for such conditions, or for engineering or testing, which might be required to discover such factors. This appraisal is not a home inspection or environmental assessment of the property and should not be considered as such.

The appraiser specializes in the valuation of real property and is not a home inspector, building contractor, structural engineer, or similar expert, unless otherwise noted. The appraiser did not conduct the intensive type of field observations of the kind intended to seek and discover property defects. The viewing of the property and any improvements is for purposes of developing an opinion of the defined value of the property, given the intended use of this assignment. Statements regarding condition are based on surface observations only.

The appraiser claims no special expertise regarding issues including, but not limited to: foundation settlement, basement moisture problems, wood destroying (or other) insects, pest infestation, radon gas, lead based paint, mold or environmental issues. Unless otherwise indicated, mechanical systems were not activated or tested.

This appraisal report should not be used to disclose the condition of the property as it relates to the presence/absence of defects. The client is invited and encouraged to employ qualified experts to inspect and address areas of concern. If negative conditions are discovered, the opinion of value may be affected.

Unless otherwise noted, the appraiser assumes the components that constitute the subject property improvement(s) are fundamentally sound and in working order. Any viewing of the property by the appraiser was limited to readily observable areas. Unless otherwise noted, attics and crawl space areas were not accessed.

The appraiser did not move furniture, floor coverings or other items that may restrict the viewing of the property.

 

[Marcia Langley]

Eli,

Similar verbiage is appropriate in your scope of work. Detailed statements as to what you did or did not do are important for clarity and to protect yourself from liability. Ditto detailed descriptions of what your expertise/responsibility is and what it is not.

However, you should remove the word "assume". Many lenders will not accept that because of the Freddie/Fannie prohibition against adding assumptions.

Change the wording to be just a factual explanation portion of your scope of work.

 

[Mike Kennedy]

ORDINARY assumptions are acceptable. Extraordinary are not.

 

[hastalavista]

Does anybody know why these aren't included with the URAR Limiting Conditions?

Because the GPAR limiting conditions was written by a working appraiser; one of our own forumites, I believe.

And can I add them myself to the addendum?

If you mean add them to the certification and limiting conditions of the URAR, it depends (when using words like "assume"); I would follow Marcia's advice, as it outlines the procedure to incorporate your inspection process into your SOW statement.

By the way, to all: The revised URAR form has been mandatory for about 20-months now. Otis, myself, and a number of other forumites worked on our SOW statement jointly and included our own "Notice to 3rd party users" into our addendum. Mine is about 2.5 legal pages long (Lord knows how many pages Otis has! :laugh: ). And the appraisers who work for my firm incorporate a very similar type of addendum. That is a lot of appraisals over the course of 20-months. I think we've had less than 5-requests to remove them.
Do you remember when we first talked about this change on the forum when it was coming about? Many had thought that no matter how well executed (not saying ours is "well executed") the addendum was, lenders wouldn't accept them? Apparently, not the case.

 

[Lee Lansford]

In my discussion of the SOW for a particular appraisal assisgnment, I always have comments similar to what you have quoted.

For example: If you communicate an appraisal using the current Fannie forms, the words "complete visual inspection" are included within the pre-printed SOW.
Question: How many of you include comment within your reports explaining exactly what your "complete visual inspection" included or did not include?

I don't much care for undefined terms...and "complete visual inspection" is such.

 

[Tawfik Ahdab]

I don't know abut the GPAR, but this is the "clarification" that I and many other local appraisers have been attaching to the new URAR reports. I hope it helps.

ADDENDUM CLARIFYING SCOPE OF WORK AND INTENDER USER

Appraisal: (noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.

Appraiser: a state licensed or state certified individual who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.

Appraisal is a branch of applied economics. It is distinct and separate from the applied sciences (engineering, surveying, mold or environmental testing, etc), from the building trades (construction, home inspection, pest and dry rot inspection, roof inspection, etc.), and from the applied arts (architecture, home design, or drafting).

The appraiser is not a home inspector and the appraisal report is not a home inspection report. The scope of the appraiser's visual observation does not contemplate defects that are hidden or defects that are not apparent to the appraiser acting as an appraiser (and lacking competence in any of the other disciplines detailed in the preceding paragraph) from a visual observation of the surfaces of the subject property from standing height.

The testing of systems (structural, electrical, mechanical, heating, cooling, plumbing) and components (such as appliances, fixtures, doors, windows, etc.) lies outside of the scope of this appraisal assignment.

The appraiser is not licensed as a home inspector, and for the appraiser to perform the actions of a home inspector such as testing could subject the appraiser to sanctions for unlicensed home inspection activity in the State of Oregon.

Inspection: A visual observation of the unobstructed, exposed surfaces of readily accessible areas from standing height.

Complete visual inspection of the interior areas of the subject property: A visual observation from standing height of the readily accessible areas and unobstructed, exposed surfaces of the living area without moving of personal possessions. It includes the visual observation of attached automobile storage, if any, as well as of any attached accessory buildings judged by the appraiser to have contributory value.

Complete visual inspection of the exterior of the subject property: A visual observation of the unobstructed, exposed, and readily accessible perimeter of the residential improvements from standing height. It includes the visual observation of detached automobile storage, if any, as well as of any detached accessory buildings judged by the appraiser to have contributory value. It excludes traversing the entire site or walking along its physical perimeter or legal boundaries.

Living area: Living area is defined as legal, finished, permanently heated, living space contiguous with, and accessible from, other living area and regarded by a typical purchaser as being habitable and as having utility. Unless otherwise specified and the reason given why, the visual observation excludes the attic, the crawl space, any unfinished basement, and below grade storage.

Intended User: The intended user of this appraisal report is the Lender/Client. The intended use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated scope of work, purpose of the appraisal, reporting requirements of this appraisal form, and definition of market value. No additional intended users are identified by the appraiser.

This report is not intended for use by the borrower for the purpose of identifying any adverse conditions in the subject's systems and components which might be revealed by any inspections by licensed professionals in any relevant field. This appraisal does not guarantee that the subject property is free of undetected problems, possible defects or environmental hazards that could exist.

Use: Reading the appraisal report or possessing the report does not constitute use. Relying on the appraisal report to understand how the appraiser developed the opinion of value does not constitute use. Use means reliance on the appraisal report to make a decision or to take an action. A party receiving a copy of this report from the client does not, as a consequence, become a party to the appraiser-client relationship.

 

[Mike Garrett RAA]

In my not so humble opinion....the more you write the more they have to nail you with. All the weasel words in the world will not protect you IF you do a lousy job.

 

[Pamela Crowley (Florida)]

That's all so very nice, but just how much of your addenda ever gets through after those 'conversions' (aka as alterations!) AppraisalPort, eAppraiseIT, LSI, and so many others are doing without your knowledge or consent?????

Nice one Tawfik! If you don't do something like this, you are leaving your hinnie exposed.

 

[Karl]

One more sentence: Any pages missing makes this report Null & Void.

 

[Pamela Crowley (Florida)]

One more sentence: Any pages missing makes this report Null & Void.

Where are you going to put that where it can't possibly be removed????? It really grinds me that I cannot yet post what these 'conversions' are doing to your appraisal reports!!!!!

CYA every way you can and keep really good files showing exactly what you sent, when, and to who.