More On Free Comp Checks

[deturner]

It's also amazing that others are out there believing the same thing.

 

[JSmith43]

There could have been drafted a much more restrictive definition as to what constitutes an appraisal. However, as long as an appraisal is defined as it is, Taz will remain in a tiz.

Taz, you are wrong, which means more work for you due to less competition for those that think keeping a work file is a barrier, I guess.

Why is a work file such a big problem if you set up electronic records? Tip: PDF and high speed scanners for the occasional odd bit of information out of a publication.

It should boil down to a business decision, where an appraiser determines if it is worth the time and effort to set up and perform comp checks in a USPAP compliant manner. Dturner gave a practical example of one appraiser's business decision reasoning for doing/not doing comp checks.

 

[Steve Owen]

Comp Check does not equal Predetermined Value. If you do it correctly.

That is right.

Of course, the question is... how do you do it correctly?

It might be useful to separate the steps somewhat. The process of "doing" a comp check is not an appraisal. It only becomes an appraisal when you communicate the results to a client. Doing an appraisal doesn't necessarily equate to pre-determined value on the next appraisal you do.

So, here's the question, Taz.

When you are hauled before the board, and they have the results of a comp check (appraisal) you have done, are you going to have the appropriate work file and signed certification? Second question, if the "client" asked you to "see if it will make value" are you going to have proof in the file that you told them you cannot do an appraisal for pre-determined value?

Good luck.

 

[David Beasley]

Comp Check does not equal Predetermined Value. If you do it correctly. Every appraiser I talk to 'in person' does them. You would not do an appraisal half hazardly, so why would you do a comp check that way? Gathering info does not mean Appraisal. I don't know where you get your misinformation. Keep it up, though. More work for me. Thanks.

No, a comp check does not mean a pre-determined value. But what of doing the comp check to make sure value is there before proceeding? Do you charge for comp checks that won't work after running the numbers? Is it less than a regular appraisal fee? Well then, isn't your compensation THEN contingent on a predetermined value? (Partial fee (if you're lucky) if comp check comes in low, full fee if "value is there"?) People can call those "phased" assignments until the cows come home, but it is setting your fee depending on the value, which is wrong. Bad wrong. Semantics or euphemisms such as "phased assignment" only works here, and in peer discussions, but I doubt the phrase would carry much weight in a hearing at your local appraisal board.

Gathering info does not mean an appraisal, on that one point you were correct. But when you call that appraiser shopping lender back and tell them "it will make it" and start out on a full fee "full assignment", you have already rendered an oral appraisal to your client by telling them "it will make it". That's in black and white in USPAP. You know, the book we're supposed to go by for how to legally do this stuff? It's available in all 50 states, even Georgia.

The only one misinformed here seems to be you. You take all that extra work, and bank all of it, you will get caught one day and won't be able to do anymore.

And truth be known, 99% of the free appraisal seekers (comp checker lenders) ALWAYS say "Well, I don't want to spend the money if the value isn't there." They say that because they're working with people that 98% of the time *knowingly* don't have enough value in their home to do what it is they want to do, and hardly any money on the bank to pay such nuisance fees like appraisal fees. That says to me that they shouldn't be doing what they're doing to begin with - and your comp checking, lazy mortgage lender is trying to get something for nothing. And you, as a willing accomplice, are enabling them to do so every time you accept the assignment of seeing if you can make the value and later hopefully collect a full fee.

 

[OzzieMick]

Maybe a list of these lenders is in order?

Pamela,

Maybe there needs to be a place to hold these lenders accountable, a section on your watchlist maybe?

Reason being, it does need to be changed/stopped.

When I was in Lending, I was often in a position of doing a loan for out of state borrowers, and not having any clue of what the property values were in that state. I was in California at that time, doing a lot of loans in Michigan, and a loan officer detests working long on a file only to have that deal fall out because the borrower has an over inflated view of the property value (NO WAY!).

I called a few appraisers asking for pencil searches, and finally one pointed me to an AVM site. I signed up, got the information I needed and went on my merry way. Never called an appraiser for that again.

Then I went to another shop, it was there standard procedure to check values on an AVM first, and never ask for pencil searches.

My point is, as in every industry, there's a lot of diversity in work ethics and habits. Some are always looking for short cuts. Some are just blatantly unethical. Either way, the public, and especially our industry need to hold these firms/individuals accountable OR IT WON'T change. Hurt their pocketbook, they will notice.

Our shop regularly gets inquiries from a company in Minnesota called Brookfield Home Loans. We have noticed that they NEVER follow through with an order. Originally we allowed trainees who were learning to research do these searches. When we realized that they were just using us to some extent, we began to ignore them.

Then we changed business names, and it began again. It was obvious it was a POLICY of that lender to behave that way, because it involved 3 or more loan officers.

So now we track these lenders in our shop, maybe we should share it industry wide?

P.S. Love what you're doing for the industry btw, had many plans to take the same actions as you already have, so count me as being onboard!

 

[SAKO MK]

i would love to stop doing comp check. but all my business is with MB and i get calls from them every day. i call it area sales range analysis. if i don't do it i have no work. what can i do? every time i go to any seminar i ask the same question. i always get the same response from the people there. you should not do it, it's a violation of USPAP. but after the seminar or at lunch i have at least 3-5 people come up to me and say that they do it as well. so what do i do...

 

[TC]

i would love to stop doing comp check. but all my business is with MB and i get calls from them every day. i call it area sales range analysis. if i don't do it i have no work. what can i do? every time i go to any seminar i ask the same question. i always get the same response from the people there. you should not do it, it's a violation of USPAP. but after the seminar or at lunch i have at least 3-5 people come up to me and say that they do it as well. so what do i do...

On this board, you better duck and cover!


TC

 

[Pamela Crowley (Florida)]

i would love to stop doing comp check. but all my business is with MB and i get calls from them every day. i call it area sales range analysis. if i don't do it i have no work. what can i do? every time i go to any seminar i ask the same question. i always get the same response from the people there. you should not do it, it's a violation of USPAP. but after the seminar or at lunch i have at least 3-5 people come up to me and say that they do it as well. so what do i do...

Find another line of work to make a living and leave appraising to those with enough ethics and backbone to do it right.

 

[Hamlet]

i would love to stop doing comp check. but all my business is with MB and i get calls from them every day. i call it area sales range analysis. if i don't do it i have no work. what can i do? every time i go to any seminar i ask the same question. i always get the same response from the people there. you should not do it, it's a violation of USPAP. but after the seminar or at lunch i have at least 3-5 people come up to me and say that they do it as well. so what do i do...

Hello Sako,

Welcome to the AF!

Are you completing a work file for these comp checks? Are you accepting assignments contingent on meeting a predetermined value? Are you accepting these assignments contingent on getting the “real order”? Do you want to risk you license and livelihood?

Only you can answer these questions and must live with your decisions.

 

[SAKO MK]

I'm new to this board, i don't get it duck & cover