Lender requesting reduction of estimated value

[BIGSKIPPER]

I recently was requested to lower my estimated opinion of market value. The subject Square foot was bracketed. Time/date of sale adjustments were used for any sales beyod the current qtr. and verified with local market data. An additional comparable sale and a current listing was added at the lenders request. The listing to sales ratio % was also noted. The number that the lender indicated was well below any of the sales used in the report (139,000-147,000). The subject property is located in a rural area. Other than distance the recommended FNMA guidelines were all met. I did not change my opinion of value. I know that once the report is submitted you cannot change the value. I am trying to find the exact wording in USPAP. I would appreciate any help with this. Thanks, Martin

 

[Mike Kennedy]

"it is what it is because the Market says it is" also known as an Opinion. Underwriting is ALWAYS free to discount any appraised value and often does. Stand Pat.

 

[Fred]

I know that once the report is submitted you cannot change the value. I am trying to find the exact wording in USPAP. I would appreciate any help with this.

As to the "change" part, it is permissible do another appraisal and submit a second report. That's not really "changing" anything.

However, I think the USPAP problem that you would enounter relates to having the client decide what the value is first, and then you hitting the client's number. That would tend to contradict that stuff about "independent" appraisal, not hitting a "pre-determined" result, and "certifying" that the value opinion was (independent and not pre-determiined), ie yours.

 

[BIGSKIPPER]

"it is what it is because the Market says it is" also known as an Opinion. Underwriting is ALWAYS free to discount any appraised value and often does. Stand Pat.

I totally agree. I am standing pat. I was looking for the exact reference in USPAP that addresses this. Thanks for the input, Martin

 

[BIGSKIPPER]

As to the "change" part, it is permissible do another appraisal and submit a second report. That's not really "changing" anything.

However, I think the USPAP problem that you would enounter relates to having the client decide what the value is first, and then you hitting the client's number. That would tend to contradict that stuff about "independent" appraisal, not hitting a "pre-determined" result, and "certifying" that the value opinion was (independent and not pre-determiined), ie yours.

I was more confused as to why they wanted the report reduced. The order came from an appraisal managment company ( one of the good ones that pay a fair amount for services) that I have worked with for a while. The owner is an appraiser and was in agreement with my data etc. and backed me up. I was just trying to locate the specific wording/guideline in USPAP. Thank you for your reply, Martin

 

[Marcia Langley]

Martin,

If all they did was ask you to reduce the opinion, that's just nuts.

They do have the option of asking you to reconsider value but unless they provide you with additional data that you may have missed or cite specific reasoning in your report that they think is flawed, then it just doesn't make sense.

From your post, the only thing I could think of is if they possibly felt your listing put a cap on the adjusted ranges and you failed to addres that in your report.

 

[Pamela Crowley (Florida)]

HUH?

Asking the appraiser for a reduced value is just as bad as asking for an inflated value!

 

[Michael Tipton]

Intentionally “Deflating” Opinions of Value

Question:​

Most appraisers know that “inflating” values is unethical, but some appraisers think that “deflating” values is acceptable, particularly in light of difficult market conditions. I think that both actions are unethical. Am I correct?​

Response:​

Yes. The ETHICS RULE requires an appraiser to be independent, impartial, and objective, and to perform assignments without bias. An appraiser who intentionally “inflates” or “deflates” an opinion of value would be in violation of the Conduct section of that Rule.

http://www.appraisalfoundation.org/s_appraisal/bin.asp?CID=12&DID=1110&DOC=FILE.PDF​

 

[Smokey Bear]

Something about a value that favors the interest of one of the parties (which includes lenders) I think it's in the certs.

 

[RSW]

You can change the value if your client can provide sales data that you may have overlooked that would indicate a lower value. I agree with Marcia on the listing thing too.