If you don't want to dance, don't go to the dance hall!

[Ray Miller]

If you don't want the appraisal don't order one from me!!!!!

Lender calls, ask if you cover such and such an area, wants your turn time and fee. He agrees to send you an order, you get the order and send them an engagement letter, and they sign and return it to you. You now have a contract to do an appraisal on such and such property.

You start the appraisal but you find something that might cause the loan not to fund. So you call the lender and give them a heads up and the kill the order. What about your contract?????

Would you expect to get paid??

New situation: You visit your doctor he said you need an operation to fix what ever. You reach an agreement on what needs to be done and the fee you are to pay.

Doctor open you up and finds more wrong or other things wrong. He stops operation, wakes you up to ask your permission if you want him to proceed. You say no, he stops and you die on the table. The insurance company or you’re family still pays.

I think the good doctor would continue on complete the surgery

I think the veterinarian would continue on and complete the work.

I think the plumber would continue on and complete the work.

I think a lot of service people would continue on and complete the work.

Why are we as appraiser expected to give a heads up and take a small trip charge fee or no pay at all? After all we are paid to appraise the property good or bad that is what an appraisal is about. Am I wrong???

If you don’t want to dance, don’t go to the dance hall. If you don’t want an appraisal don’t order one.

 

[Elliott]

Ray,
I had a tendonitis issue with my wrist a year ago. I went to a specialist
because I thought it might be carpal tunnel. When I went to the neurologists
office, there was a $200 file set up fee. I talked to the Dr. about 10 minutes,
she hooked up a thingie that measured nerve resistance. She said, "You
don't have carpal tunnel, its probably tendonitis, keep doing what you've
been doing. Total bill $600.

If a new client calls you, appraisers should have a receptionist that makes them
pay for the $200 file set up fee before you get to talk to the appraiser.

 

[RSW]

I'll have my people call your people.

 

[jay trotta]

there is No such thing as a "Heads Up" - call; this is where the mistake is made, you had a signed contract to provide an Appraisal- did you have a "will call clause" in your letter of engagement ??

I Don't....it says we will provide these services and you will pay $xxxxxxx for them. When providing a service under contract, and you don't have a "half way thru" Cost, then yer plain outa luck.

 

[panappr]

Ray I have to agree with Jay, that your first mistake was making that call. I'm working on an assignment right now, that probably has a few issues that will kill the deal (flood zone, no permits, and a good ole' cost to cure). I'm gonna get it out of here over the weekend finished. Collections, however is an entirely separate issue. I have to assume they will pay without any problems because of who they are.

 

[Doug Smith SRA]

Full Speed Ahead

Appraisers cannot make a blanket rule to complete an appraisal without regard to what is discovered during the assignment without considering the steps in the Scope of Work Rule.

Quote:

Communication with the client is required to establish most of the information necessary for problem identification.

Quote:

Determining the scope of work is an ongoing process in an assignment. Information or conditions discovered during the course of an assignment might cause the appraiser to reconsider the scope of work.

Some in previous posts have suggested that it doesn't matter if the property turns out to be in a flood plain or that there are expensive repairs necessary. Pay these no mind, just finish the appraisal and expect to be paid. NO SUCH RULE IS CONTEMPLATED BY USPAP.

If more than ordinary repairs are required, there is obviously has to be a reconsideration of the scope of work with the client given the option to either go ahead with the 'as is" value or consider an "as repaired" or "subject to repairs" value. To stop communicating with the client once the order is received is a violation of USPAP if there is anything discovered that might cause the appraiser to reconsider the scope of work.

I have never seen such bad advice about any subject. It isn't a matter of just "mind your manners", USPAP guides appraisers to make communication a two way street and anything that changes the scope of work demands going back to the client. What happens when an order comes in for a single family unit and the property is a doublewide manufactured home. In the full speed ahead scenario, the appraiser just shifts over to 1004C and produces the ordered appraisal without telling the client. Jeesh...pay attention...

Doug

 

[Bearslide]

Appraisers cannot make a blanket rule to complete an appraisal without regard to what is discovered during the assignment without considering the steps in the Scope of Work Rule.

Some in previous posts have suggested that it doesn't matter if the property turns out to be in a flood plain or that there are expensive repairs necessary. Pay these no mind, just finish the appraisal and expect to be paid. NO SUCH RULE IS CONTEMPLATED BY USPAP.

If more than ordinary repairs are required, there is obviously has to be a reconsideration of the scope of work with the client given the option to either go ahead with the 'as is" value or consider an "as repaired" or "subject to repairs" value. To stop communicating with the client once the order is received is a violation of USPAP if there is anything discovered that might cause the appraiser to reconsider the scope of work.

I have never seen such bad advice about any subject. It isn't a matter of just "mind your manners", USPAP guides appraisers to make communication a two way street and anything that changes the scope of work demands going back to the client. What happens when an order comes in for a single family unit and the property is a doublewide manufactured home. In the full speed ahead scenario, the appraiser just shifts over to 1004C and produces the ordered appraisal without telling the client. Jeesh...pay attention...

Doug

I concur with Mr. Smith on this. If scope has changed, communication with the client is in order. If that results in the order being canceled, bill an appropriate fee, if you must, for time and research.

 

[c w d]

I concur with Mr. Smith on this. If scope has changed, communication with the client is in order. If that results in the order being canceled, bill an appropriate fee, if you must, for time and research.

Therein lies the problem: billing the client. 90% of those billings will never be paid. The other 10%, priding themselves on their professionalism, will pay but, you'll never see them again. Lets face it. Our clients expect us to conduct an appraisal, be professional in our communications to them and spend our time and money researching the property. In the end, if the property has a problem that will prevent it being financed through our client's want to know and the rule is to cancel the order and pretend nothing happened. If you have made it out to the property for inspection most clients will pay a trip fee. If you haven't, well, your time, the cost of the services you utilize and any other overhead is worth diddly to them.

How is it that the appraisal process was ever made fee based with the fee determined at the very beginning; a process that can change significantly throughout its entirety? This is a process, no matter how much research one does upfront, that can require significant alteration. Our fees should be based on an hourly cost. But, try explaining that to your clients.

 

[RSW]

I also agree with Doug Smith.

I had a situation several years ago where a 10-15 year old home in a high end neighborhood had sevier cracks in the exterior foudation walls, the brick chimney was seperating from the structure, the interior floors had large cracks in the garge and many other defects that indicated the dwelling was shifting. I completed my inspection took several photos showing what I saw. I called the lender when I got back to the office and reported what I had found. The lender requested the photos. The lender decided not to continue with the loan afer they reviewed the photos and read my comments. They payed me a cancellation fee. I did not arrive at an opinion of value but gave a service that the lender could use. I would not have served the client any good will if I had completed it. The appraisal would most likely have taken me double the time to complete and I would not have been able to charge for the extra time spent. So, therefore, it was the right thing to do for the client and for me as a business decission.


Scott

 

[Ray Miller]

Ray I have to agree with Jay, that your first mistake was making that call. I'm working on an assignment right now, that probably has a few issues that will kill the deal (flood zone, no permits, and a good ole' cost to cure). I'm gonna get it out of here over the weekend finished. Collections, however is an entirely separate issue. I have to assume they will pay without any problems because of who they are.

I post this as a general question to see what other appraisers would do.

My policy has always been, you order, I complete and you pay. I am not one for giving a heads up. I may call and informed the lender that I have a 1004-C URAR not a 1004 URAR and need to change the SOW and up the fee. At that point 99.9% are pulled and at best I get the cost of gasoline for all the time I have spent.

My real thinking is they should pay the full fee or at least cover all your hours spent in drive time, research before getting to the subject. It was there fault they did ask enough questions of the borrower to know what they were lending on.

Don't tell me to drive out to the subject before starting any work, in the rural areas that would mean double drive time back to the office to pull comparables most of the time. In order to do the short turn times you got to do pre work.