I'm Conflicted - Should I Do These Reports?

[hastalavista]

I'm Conflicted - Should I Do These Reports?

I cannot believe this is still on the argument table.
Any appraiser that feels conflicted shouldn't do these types of reports.
For the rest, they certainly can be USPAP compliant and based on the client/intended use/intended user (IMNSHO) they reduce the liability of the appraiser in regard to the physical characteristics of the subject.

UCbruin is correct (again, IMO): The significant issue here is the fee, not the SOW. If these assignments can be done profitably, there will be plenty of appraisers doing them. If they cannot be done profitably, they'll be plenty of appraisers who will give them a try and then stop doing them. If some appraisers find it profitable to do interior inspections at $325/assignment, I'm sure a segment of those appraisers will find it profitable to do these assignments at $225.

As to saving time, in theory, they'd save a lot of time in higher-density areas where there are a lot of transactions and where this type of product meets the client's requirements. Home inspectors can inspect the property and fill out there home inspection reports on site before they leave. A borrower, upon loan commitment, can indicate the time/date they will be available for the inspection. Appraisers are not in-the-loop until that date is set-up. As soon as the inspection is done, the inspection-report is uploaded to the appraiser and s/he begins her valuation analysis based on the characteristics of the property identified in the inspection report. I don't see why these types of assignments would require a drive-by of the comparables (again, SOW). Effective date is the date of the inspection. All the appraiser is responsible for is the valuation analysis (using sound methodology); the appraiser is not responsible for errors regarding the site/improvement inspection. Reports relying on 3rd party sources for significant items that affect value are completed all the time (I've been working on-and-off on one that is directly and significantly dependent on the reliability of the contamination report. If they are 100% wrong, I am not responsible.).


Once more, if the individual appraiser believes that somehow such a report cannot be made USPAP compliant, then don't do them. For the rest of us who think they can be done in a USPAP compliant manner, we are free to choose to take them on or not. For me, they'd have to pay a decent fee. My guess is there are many who would take them for less than I would. Those appraisers will get this business.

It really is this simple: Not every transaction needs a 1004. For those that don't, an alternative will be used. As long as there is a method available for appraisers to complete such assignments in a USPAP compliant manner, then appraisers can choose to bid on such work or not bid on such work. The mechanism for USPAP compliance exists. Therefore, this becomes a business decision by the appraiser. My business decision at this time is not to take them because I have better opportunities to earn a better profit margin on other types of assignments.

 

[residentialguy]

Nope.

You can add endless amounts of addenda to a 1004, and comments to the SOW as the 1004 states, "at a minimum", not, The appraisers SOW was limited to only this.

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and you can't with this???

 

[timd354]

I see............

2 different intended use statements.

Hummmmm,

Could that be confusing and misleading?????

USPAP fail.

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Not the most artful way to disclose the intended use, but once someone actually bothers to read the entire thing, the there is nothing misleading about what the intended use is.

By the way, while USPAP does not allow appraisals to include communicate their analyses, opinions, and conclusions to intended users in a way that is misleading, it says nothing about communicating in a manner that is confusing, which many appraisers should be very thankful about since a significant minority of appraisers have very poor writing skills and have a very tough time communicating information in a manner that is often not confusing and/or ambiguous.

Just because you obviously did not bother to read all of the disclosures does not mean that there is a USPAP violation.

 

[Meandering]

Can a client limit you to only relying upon information provided to you by anyone, concerning interior condition, layout, when an interior inspection is available????

Nope, you must decline the assignment.

 

[Meandering]

and you can't with this???

Who can't?

 

[Meandering]

Not the most artful way to disclose the intended use, but once someone actually bothers to read the entire thing, the there is nothing misleading about what the intended use is.

By the way, while USPAP does not allow appraisals to include communicate their analyses, opinions, and conclusions to intended users in a way that is misleading, it says nothing about communicating in a manner that is confusing, which many appraisers should be very thankful about since a significant minority of appraisers have very poor writing skills and have a very tough time communicating information in a manner that is often not confusing and/or ambiguous.

Just because you obviously did not bother to read all of the disclosures does not mean that there is a USPAP violation.

And where did I limit my posts to only a pre-printed intended use????

Did you read the part about the SOW??

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[residentialguy]

Can a client limit you to only relying upon information provided to you by anyone, concerning interior condition, layout, when an interior inspection is available????

Nope, you must decline the assignment.

Only if the appraiser determines that is not enough. Remember, they don't have the verbiage of the 2055 has on it.

 

[Meandering]

Only if the appraiser determines that is not enough. Remember, they don't have the verbiage of the 2055 has on it.

2055 verbiage has nothing to do with it.

The purpose is for lending, you have appraisal guideline overlays that are inplace, along with your USPAP.

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[residentialguy]

2055 verbiage has nothing to do with it. The purpose is for lending, you have appraisal guideline overlays that are inplace, along with your USPAP

I'm saying the if the appraiser accepts this type of appraisal, that means that the SOW is adequate. The appraiser can add to this SOW as well. In fact, since the report does not have the hangman's loose verbiage of the 2055 of no other assumptions allowed, this is a superior form. The appraiser is the one that makes it USPAP compliant. Due to the low fee and uncertainty of the data, I personally wouldn't do it. It would take more work to make it compliant than it's worth.

 

[Meandering]

I'm saying the if the appraiser accepts this type of appraisal, that means that the SOW is adequate. The appraiser can add to this SOW as well. In fact, since the report does not have the hangman's loose verbiage of the 2055 of no other assumptions allowed, this is a superior form. The appraiser is the one that makes it USPAP compliant. Due to the low fee and uncertainty of the data, I personally wouldn't do it. It would take more work to make it compliant than it's worth.

And how do you get around that an interior inspection was available, to anyone who is NOT the appraiser, yet the SOW was not severly limited by the cleint, which might put your opinion in jeopardy if you have been provided the wrong, or incomplete information?

How do you rectify that you determined the SOW was sufficient to develop a credible MVO subject to lending appraisal guidelines in place?

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