Hypothetical Condition Vs. Extraordinaryassumption

[Pamela Crowley (Florida)]

As much as I don't like it, drive by pre-foreclosures can be competently completed without additional liability.

Scope of work and disclaimers regarding what you can and cannot see from the street only observation of the subject property will cover you very well. Write it well, do your job well, and keep on trucking.

 

[Bob Ipock]

"Exterior-only" appraisals are completed every day on properties that are in pre-foreclosure.
For that matter, appraisals are completed every day where there is no viewing of the interior of the improvements.
As long as the client is in agreement with the scope of work and is aware of the extraordinary assumptions that are a integral part of such an assignment, I'm not certain as to why an appraiser has to worry about losing his or her license regarding completing such an assignment.

Like it or not, the make up of your state board will determine the "worry level" about losing your license.

If the board members are well informed and willing to apply USPAP rather than personal opinions you might be ok. However, in some cases we have board members who want to set their own standards of practice with little or no regard to USPAP. I know of art least 2 NCAB members who took the USPAP Instructors Exam and failed. This might indicate a lack of understanding of USPAP on their part.

I have seen and heard with my eyes and ears , board members say that an interior inspection is required, that comparable sales need to be measured, that
an income approach needs to be done for every appraisal, that deeds need to be pulled for every appraisal....I could go on.

You will be held to the standards of the state appraisal boards which may or may not be correct, reasonable or legal.

 

[Pamela Crowley (Florida)]

Bobby,

Bad for NC, good for the rest of the states, your state board is definately different and has a long way to go to become a 'legitimate' and effective regulatory system. Please try to remember that all Boards are not like NC.

 

[JSmith43]

Bad for NC, good for the rest of the states, your state board is definately different and has a long way to go

Bob has me thinking about increased risk to license as well. Didn't Terell post similar information regarding AK board? It takes a lot of guts to post about your own board, so there is probably other bad news we don't yet know.

I think Pam & Lee also make good points that if you carefully craft your scope, etc, your risk to license status is lessened & theoretically should be eliminated.

However, exculpatory language in a report is not going to make you bullet proof. Even if case law is on your side. Part of risk is the risk in having to defend your work in the future. If your appraisal file is likely to be sitting in archival storage for the next ten years (typical 20% down conv. loan), you have far less risk than if you appraise a REO.

Your file will be active, quite possibly subject to judicial review. The point is, there is a relative hornets nest of interest buzzing around a REO file with your work in it, compared to a file in deep storage somewhere.