Intended Use

[hglenbetts]

I had a Mortgage broker contact me who wants an appraisal on his private residence. He stated that it is not for financing, so I told him I'd do a GPUR report and I would need to collect the fee at the door, at the time of inspection. All is well.

In doing some preparing on the report, I asked him whom the intended users need to be and what is the intended use. His response is "It's just for me" and "Personal Use".

I don't have a problem with listing "Just him" as the intended user, But is "Personal Use" acceptable for intended use??

 

[Lawrence R.]

I had a Mortgage broker contact me who wants an appraisal on his private residence. He stated that it is not for financing, so I told him I'd do a GPUR report and I would need to collect the fee at the door, at the time of inspection. All is well.

In doing some preparing on the report, I asked him whom the intended users need to be and what is the intended use. His response is "It's just for me" and "Personal Use".

I don't have a problem with listing "Just him" as the intended user, But is "Personal Use" acceptable for intended use??

Yes. I think so. The term personal edification comes to mind.

The problem you have isn't with what he said...it's that you don't beleive him. But USPAP does not cover hunches. We are allowed to take people at their word.

 

[PropertyEconomics]

I may say the intended use of the report is for financial planning purposes on behalf of the client. That is a personal use. I would question "personal" use as well becuase it could be for a divorce and in that situation you have simply been duped. I do not worry about these situations much, however, I would take him at his word and perhaps call him and ask him if personal financial planning would accurately describe the reason you are doing the appraisal. Good luck.

 

[Mztk1]

The purpose of this report is to estimate market value for the owner, and it is for informational use only. It is not intended for any other use, nor for any user other than the property owner/client.

 

[DWiley]

The purpose of this report is to estimate market value for the owner...

That is a statement of the applicable definition of value. It is not a statement of the intended use.

"Personal use" could possibly mean for marketing, divorce, bankruptcy, financial planning, private financing, etc. The scope of work could be very different for those different uses.

Since the credibility of assignment results is judged in the context of the intended use, I recommend being VERY specific about the intended use.

 

[George Hatch]

In addition to Danny's suggestion about being as specific as possible, I also include a comment similar to "No other intended users were identified by the appraiser at the time of engagement and none are assumed." I make a similar comment about intended users.

 

[leelansford]

I had a Mortgage broker contact me who wants an appraisal on his private residence. He stated that it is not for financing, so I told him I'd do a GPUR report and I would need to collect the fee at the door, at the time of inspection. All is well.

In doing some preparing on the report, I asked him whom the intended users need to be and what is the intended use. His response is "It's just for me" and "Personal Use".

I don't have a problem with listing "Just him" as the intended user, But is "Personal Use" acceptable for intended use??

Your client is being less than truthful and very likely does not understand the importance of you having awareness of the REAL Intended Use of the appraisal. I'm very cautious regarding working for someone who is not truthful when engaging me.

"Personal use" runs the gamut from "using" your report to line the bottom of the bird cage to matters of personal bankruptcy etc. It is important for you to know which use is the use you are serving.

Question: Would it make a difference to you whether or not the appraisal is one that one day may require your testimony in court? Importantly, does it make a difference to your client?

You need to have a "heart-to-heart" with your client.

 

[Mztk1]

That is a statement of the applicable definition of value. It is not a statement of the intended use.

"Personal use" could possibly mean for marketing, divorce, bankruptcy, financial planning, private financing, etc. The scope of work could be very different for those different uses.

Since the credibility of assignment results is judged in the context of the intended use, I recommend being VERY specific about the intended use.

The purpose of the report, in my statement, is to estimate market value. The use is for informational purposes of the owner, period. Nothing more, nothing less. You have a curious owner. My statement covers it all.

 

[Mztk1]

In addition to Danny's suggestion about being as specific as possible, I also include a comment similar to "No other intended users were identified by the appraiser at the time of engagement and none are assumed." I make a similar comment about intended users.

The comment I made said just that.

 

[Mztk1]

Your client is being less than truthful and very likely does not understand the importance of you having awareness of the REAL Intended Use of the appraisal. I'm very cautious regarding working for someone who is not truthful when engaging me.

"Personal use" runs the gamut from "using" your report to line the bottom of the bird cage to matters of personal bankruptcy etc. It is important for you to know which use is the use you are serving.

Question: Would it make a difference to you whether or not the appraisal is one that one day may require your testimony in court? Importantly, does it make a difference to your client?

You need to have a "heart-to-heart" with your client.

"Personal use" is a terrible explanation, it is too open ended. Financial Planning is better but still too broad and to the heart of what the owner wants, simply to know market value. The use has to be limited. That's why I put for "Informational use only" in these types of reports. You do get people who, for no other reason than wanting to know the value of their house, ask for an appraisal.