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How Far Back Will You Go For A Recert

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Michael Giovanni

Freshman Member
Joined
May 6, 2003
Professional Status
Licensed Appraiser
State
Minnesota
3 months 6 months 1 year

Please L.O. give me a break! Im charging $100.00 for a recert and $150 if you need new subject photos. No one complaines but with our current market I am going to limit recerts to 6 months. What are some of you guys doing

Thanks,

Mike Giovanni
 

Frederick R. Ruffell

Senior Member
Joined
Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
Michael,
Do you really mean "recert" or do you mean an Appraisal Update. USPAP 2003 had major changes in how we can do Updates (commonly, but wrongly, called "recertification of value" by lenders). If you are only charging $150 for an Appraisal Update I would bet that you know not what you do and are in violation of USPAP. Do you know the difference between a Recertification of value and an Appraisal Update? If you do and you really do mean a recertification of value then I apologize in advance. :(
 

Michael Giovanni

Freshman Member
Joined
May 6, 2003
Professional Status
Licensed Appraiser
State
Minnesota
I am talking about a recertification. Just a simple ol drive by the subject to confirm its still there shoot new Subject photos and confirm the estimated value is still accurate.
Considering the current market most of the recerts have not needed a value adjustment due to a stable market.

So now back to the original question. Do you get many requests for recerts?

Thank You

Mike
 

Tater Salad

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Missouri
Uhhh, Michael--you better read that thread that Frederick directed you to--it appears that you are talking about an update, if you are stating that the value is "still accurate" at this new date.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Michael

When we get a request for a "recert" we tell the lender that what they really want, unless the subject is a new construction or otherwise "subject to", is an Update since they want the date of the appraisal changed.

Right now, in my market, I will Update back 1 year because the market has not really changed during that time.

We inform the lender that the Update value may be different than the value contained in the original report because we will most likely be adding some comps and discarding others. We assign a new file number and copy the old report to the new file number. In the body of the new report, we note that this is an Update of an older report, old file number and completed on such and such a date.

We also ask the lender if they require new photos of the property. If they do not, then we find our new comps and make the Extraordinary Assumption in the report that nothing has changed in the property since the date of the first appraisal. This way, we do not have to revisit the property. The report is assembled, printed or mailed to the lender.

It is important to remember these phrases and keep them straight:

An Update can be done for the original client only, bringing the effective date of an old report forward to a new date. It is considered a new assignment by USPAP. The old appraisal can be incorporated into the new report and must be so noted in the report

A Reissue is where there is a changing of an existing appraisal to the new client with written permission from the original client. The date of the appraisal remains the date of the original appraisal. If the new lender wants a new date, you have a new assignment and cannot do just a reissue.

A Recertification is done for the original client only to confirm whether or not the conditions of a prior appraisal have been met. That is conditions such as subject to completion of construction, laying of carpet, issuance of a Cert of Completion, etc.

Don't feel bad about not getting these right away. For many of us, it took years before we understood the difference between Recertification, Update and Reissue. You might want to give a good long look to AO 3. Here's a link to it in USPAP 2003:
http://www.appraisalfoundation.org/html/US...PAP2003/ao3.htm
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
2003 USPAP Advisory Opinion 3 has three ways of completing an update to an appraisal. The first two options any appraiser or any firm can do. The first option is a completely new report (2055 or 1004 or whatever) that does not refer to a prior report. The second option is a new report (2055 or 1004 or whatever that has the prior report attached and the information from the prior report is incorporated by the attachment (drivebys or field reviews would be examples).

The third option requires the original client and the original appraiser/appraisal firm and is a letter type of report that incorporates the prior report by reference because everyone one involved has a copy of the original. There are seven specific items that have to be in the written letter, see Option 3. Some of the software vendors have an Appraisal Update letter that could be used with the addition of intended user, intended use and purpose so that all seven items are covered (if the value has not declined).

Home Focus Valuation (Bank of America) has come out with a policy memo. They want all Updates for single family properties to be completed on a 2055. If the original report did not have a cost approach, no comment in the new 2055 is necessary. If the original report report included a cost approach, but there are not any changes to the cost approach, only a comment like "No revisions to the cost approach were warranted in this appraisal update". Comments in the new 2055 have to reference the prior report and that this specific report is an appraisal update.

Fannie Mae's guidelines Section 201 has had the following time frame since 1990 for updates. The original appraisal has to have been completed within 12 months of the date of the note and mortgage. When the original appraisal report will be more than 4 months old on the date of the note, if the property has NOT declined in value, the appraiser can prepare a letter type report (2003 USPAP AO3, option 3). The appraiser has to go look at at least the exterior of the subject (taking photos is a good idea) and review current market data. Whether the new comparables are placed on a grid or/and photos of the new comparables is up to the specific client. But the information should be kept in the appraiser's work file and taking photos of the comparables is also a good idea, even if they stay in your work file only.

However, if the property HAS declined, then an update is not applicable, and a completely new report has to be completed.

And yes, all of the above are new assignments. Any time an appraiser writes or gives an oral report with their opinion of value, it is a new assignment, and the supporting data is retained in the appraisers work file.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
But, but, but....it isn't a recertification, it's an update!
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Posted by Frederick Ruffell
"USPAP 2003 had major changes in how we can do Updates"

Can you identify one? :D
 
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