Investor Giving Me Tons Of Work

[Kate]

Standards Rule 1-5
(This Standards Rule contains binding requirements from which departure is
not permitted.)

In developing a real property appraisal, when the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business: (note13)

(a) analyze all agreements of sale, options, or listings of the subject property current as of the effective date of the appraisal; and

(cool.gif analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal. (note14)

Comment: See the Comments to Standards Rules 2-2(a)(ix), 2-2(cool.gif(ix), and 2-2©(ix) for corresponding reporting requirements relating to the availability and relevance of information.

Ok wait a minute. Mind if I get technical here for a minute. USPAP says as of the effective date of the appraisal. The house was not listed as of the effective date. It is listed afterwords. Now now I know it's not ethical for me to withhold info that I know about and I won't. BUT.....hum....USPAP says it pritty clearly. as of the effective date. Hum, interesting. Does that mean that it is beyond our scope of work to keep checking on properties up until the day the client gets it into their hands. Hum, when does the liability seace for the appraiser? I think it would be the effective date. In other words, if the place burns down the day after the effective date or is flooded the day after our inspection, it's out of our hands. Right? Interesting.

 

[Ghost Rider]

Kate, at the beginning of this thread, it seemed as if the property was listed for sale when you went to do the physical inspection, which I assume is your effective date of the inspection. If he lists it the day after you are in the house, your limit of liability for that listing is gone, not your problem anymore. It does NOT allow you to overlook the prior transfers.

If you inspected the property on July 1st, and he lists it on July 2nd, You can "get away with" (and I use that term loosely) not including information about the current listing.

 

[Kate]

Ah ha! I see. Any forseen problem with me not mentioning it then? Just re-read my original post and no I guess I didn't make that clear. He actually called me to tell me that he just put it on the market and wanted me to not mention it. But no it wasn't listed prior to the inspection-effective date.

 

[Ghost Rider]

Yeah - When the appraisal is reviewed, the review appraiser may or may not notice that the property was listed AFTER the effective date of the appraisal - It'll show up in the review, and you'll have to waste your time writing a rebuttal of the review. PLUS, it'll raise a red flag with the reviewer that you were "ignoring" data that should have been disclosed, and at the same time raise the same flag with the lender/investor that this loan is going through. Perception is greater than reality in some cases Kate.

 

[Chris Colston]

Although not a USPAP requirement, if I have seen the house on July 1 (the effective date) and I am still in the process of formulating the report on July 3 and the owner mentions he is going to list the house on July 2 or even the 3rd, I'm going to put the listing information in the report. (how's that for a run on sentence :lol: ) The loan hasn't closed, the lender hasn't even seen the report yet. I think they would want to know.

 

[Willie]

Kate, for goodness sake, you aspire to being an investor. Follow USPAP, and learn how to invest legally. Keep in mind, it really is high risk appraising, because he may not be fixing the homes up right. Then again, he may be doing so.

Many have said, there may be nothing illegal and you might have a good client. Pay attention to them, and not to the "scaredy pants" crowd who ever take a chance to get anywhere in life. They are like the person in the parable, who was given a talent, and did nothing with it, because they are afraid.

For the record, I only read the first couple of pages.

Oh yeah, disclose the listing.

 

[Stone]

It goes back to "who's your client." I know you recognize that the leneder is your client, technically, but clearly you think of the investor as your "client" in a non-technical sense. If you really do recognize that the lender is your client, why would you not put the listing in? USPAP or not, it is a piece of information that would likely be important to those lending the money. And since that knowledge could be beneficial to them, whether it affects the loan or not, ignoring it at least has the appearance of a conflict of interest on your part. It shows that you are not a disinterested third party, and that you are actually advocating a position (the investor's). Whether this is your intent or not, I believe it has that appearance. Put the info on the form. It is the right thing to do for your client. The lender.

 

[Kate]

Done. It's in there and may the chips fall where they may.

 

[Dee Dee]

Originally posted by Kate@Jul 6 2004, 05:45 PM
Now I am doing a new one for him. He flips a lot. He also buys multiple houses from other investors as like group sales. Then desides after what he wants to do. This new one is part of a total of four sales I'm doing for him that he is buing from another investor. I use the word sale losly. He now owns the houses but when he buys them he uses a different kind of financing that will loan him money no questions asked but the rate is high. One of them he is now listing but still wants to refi incase it take a while on the market.

I assume you are disclosing and describing in detail these prior transfers of ownership in your reports?

 

[Stone]

Good job. One of the hardest parts of this job is doing the correct thing when it can hurt your bottom line. Way to do the right thing.

Hopefully, this won't be a huge deal, and if this guy is for real, you will continue to get work through the correct channels.