July 2008 ASC Q&a- Wink Wink Comp Comp

[William K]

William, anywhere and everywhere that I have looked within the USPAP (plus, Q&As), the ASB has ALWAYS indicated that the appraiser's communication of an opinion of price or value (or range thereof) is to be understood as the appraiser communicating an appraisal. Hence, subject to the USPAP (Std. 1 & 2 etc.).

Lee,
I absolutely agree.

However now with the Q&A they give credence to a term "Comp Check" and state YES you can do a comp check for free.

Now we both know that a "Comp Check" is an appraisal.
Why didn't they use the term appraisal?
Why did they use the term "Comp Check"?
Just because the question was as to a " Comp Check" all they had to do was state again " All appraisals must be in compliance with USPAP!

If a "Comp Check" is an Appraisal.
And a "FULL" Appraisal is an Appraisal.

How do you explain their statement?

"Yes. However, the appraiser would have to ensure that receiving a "full" appraisal assignment is not contingent upon the result of the "comp check" assignment "

Whats the difference between the COMP CHECK and the FULL APPRAISAL? ( THEY ARE BOTH APPRAISALS, RIGHT? )

Is the difference the fact one is paid for and one is not?
Are free appraisals now defined by the ASB as " COMP CHECKS"?
Are charged for appraisals now defined by the ASB as "FULL" Appraisals?

 

[Hamlet]

Sandy,

USPAP does allow us to say no, in fact it requires it.

Do you think those that are providing the pre-determined values and completing contingency reports are going to stop because of USPAP? How is USPAP going to stop the source which is the lenders who request these? Making it illegal to request pre-determined value by the Feds and States is the only way to stop this. Punishing those that request them is the only way to stop them.

 

[Mr Rex]

Sandy,

USPAP does allow us to say no, in fact it requires it.

Do you think those that are providing the pre-determined values and completing contingency reports are going to stop because of USPAP? How is USPAP going to stop the source which is the lenders who request these? Making it illegal to request pre-determined value by the Feds and States is the only way to stop this. Punishing those that request them is the only way to stop them.

USPAP Police.

and if necessary declare USPAP martial law and call in the troops.

 

[George Hatch]

BTW, let's suspend reality and say the ASB was somehow able to distinguish between a "comp check" and an appraisal well enough to ban them. You know as well as I what would happen the day after they got that prohibition on the books:

Riiiiinng, riiinng.

A: "ABC appraisal services, Joe Camel speaking. Have disto, will travel. "

B: "Hi, do you guys do appraisals?"

A: "Sure do. We be the best appraisal outfit within a 100-yard radius."

B: "Great, great. We're always looking for good appraisers. Listen, I just heard from one of my other appraisers..."

A: "I think I kow who you're talking about. That guy is a skippy".

B: "Yeah, whatever. Anyways, I heard you guys can't do comp checks anymore. So what I'd like to ask you for is not a comp check, but a "value check", you know, just to let me know what the value of the property is before you go out."

A: "Why, I've never heard of such a thing. Just kidding. That sounds just like a comp check; and come to think of it, it sounds just like an appraisal, too. What's the difference?"

B: "Well, it's not the same thing at all because we call it a value check, not a comp check. They're two totally different things. Sometimes we also call it a pencil search or a pre-appraisal or a draft report, too. See, I'm trying not to waste my client's money until I find out for certain that I can fund a loan for them. All my appraisers do them. "

A: "Ummm, I'm not sure I can actually ..."

B: "Hey Sport, did I mention we're always looking for great appraisers? My borrower has gold plated credit. If you'll do this value check for me, we'll note you as being a cooperative appraiser and add you as a member of our elite team. We'll send all our work your way from now on. Now what do you say"?

A: "Help me, I'm tempted and I can't say 'no'. "

The moral of this tragicomedy is that your nemesis will just come back under another squishy name and we'll have to go through this "reading is fundamental" drama all over again.

 

[Webbed Feet]

I have done more than try. On the portal thread I posted an AIReady report that I created 2 years ago just to demonstrate the fallacy of such claims.

Ok, I believe you. Now, that makes one out of how many appraisers that can do it versus how many appraisers required to be able to do it and can't?

Webbed.

 

[Hamlet]

Whats the difference between the COMP CHECK and the FULL APPRAISAL? ( THEY ARE BOTH APPRAISALS, RIGHT? )

It depends on who you ask, to an ethical appraiser who understands USPAP, they are an appraisal. To the lenders/MBs they are a guarantee of value, all they want is follow up paperwork for the file. To the appraisers who provide those services, they are the means to getting a paying order and cut out the surplus of competition in our happy appraisal world.

 

[Hamlet]

USPAP Police.

and if necessary declare USPAP martial law and call in the troops.

USPAP Militia, Semper Fi!

Lets just arm all ETHICAL appraisers and we can take out skippy ourselves.:new_2gunsfiring_v1: NO QUARTER GIVEN!!

 

[William K]

Whats the difference between the COMP CHECK and the FULL APPRAISAL? ( THEY ARE BOTH APPRAISALS, RIGHT? )

It depends on who you ask, to an ethical appraiser who understands USPAP, they are an appraisal. To the lenders/MBs they are a guarantee of value, all they want is follow up paperwork for the file. To the appraisers who provide those services, they are the means to getting a paying order and cut out the surplus of competition in our happy appraisal world.

My point is the ASB with their answer infers there is a difference but doesn't define what it is!


Lets say my client calls and says I need a "Comp Check" on 123 ABC rd and if it is high enough then they will require a "Full" Appraisal.
I say I can do a Comp Check and be in compliance with USPAP and I go out to to the subject and perform a complete appraisal which would be in compliance with lending guidelines and USPAP., but as it is only a "COMP CHECK "the lender just wants the verbal, once I complete my report and transmit via phone call the final value making sure I have the fully documented report with file. The lender upon obtaining the verbal states I now want a "FULL" appraisal, for which I chose to charge a fee as now I am sending a printed fully USPAP compliant report which could end up in the hands of an unintended user, however under this scenario I would be in violation of USPAP.

My question is am I in violation because the second order was contingent on the value opinion of the first? Or because the fee was contingent upon me completing a second appraisal which was contingent on the Comp Check value?

And what if the scenario changed just slightly to the lender saying once we receive the "Comp Check" we will decide if we want a "Full appraisal" because if the comp check ( again which I completed as a Complete appraisal in accordance with USPAP) is high enough we won't need to order a "FULL" Appraisal but if it is to low then we will need a "Full" Appraisal with hard copy for which I will charge.

 

[Hamlet]

Lets say my client calls and says I need a "Comp Check" on 123 ABC rd and if it is high enough then they will require a "Full" Appraisal.

The difference is the communicating of the pre-determined value to the appraiser. If the appraiser has the knowledge of what number is expected, then you have a target to hit.

If they clients says that they need to get $X, in that sentence, then you have a target to hit and you must turn down the assignment. As long you do not know what value it is that they need, then you aren’t hitting a pre-determined number and it is strictly a business decision on their part if they want to proceed after viewing your results.

 

[Lee Lansford]

At the end of the day

At the end of the day, there are appraisers who will work to cirumvent what is right and there are those who work in a professional and correct manner.

Some appraisers work contrary to what is right because they are ignorant; some do it knowing what they are doing is wrong.

All of this back-and-forth in this string of discussion ("if ONLY the ASB would do 'this' or 'that'...IF only, if only...") is a nice exercise...but tomorrow will be pretty much like today for those who work to scam the system. They don't care how you define "comp check"...don't care if it is an appraisal or not...don't care about contingency assignments.

Just another day.