More On Free Comp Checks

[JSmith43]

Well, Mike, I see we agree to some extent on the purposes of the VA bulletin

But I don't feel nearly as strongly as you do on the issue so I won't try to compete with you on use of over the top rhetoric, this time

 

[Mike Kennedy]

WHO meeeeee? Never.:new_smile-l:

 

[PropertyEconomics]

A restricted report for a client unfamiliar with the property? Not a good idea.

AO-11

Content of the Restricted Use Appraisal Report (AO-11)
As noted in the Comment to Standards Rules 2-2(c)(i) and 8-2(c)(i):

The Restricted Use Appraisal Report is for client use only. Before entering into an agreement, the appraiser should establish with the client the situations where this type of report is to be used and should ensure that the client understands the restricted utility of the Restricted Use Appraisal Report.



The Restricted Use Appraisal Report should contain a brief statement of information significant to the solution of the appraisal problem. “State” is the distinguishing term related to the Restricted Use Appraisal Report.



Standards Rules 2-2(c)(vii) and 8-2(c)(vii) requires the report to state the scope of work used to develop the appraisal. The client for a Restricted Use Appraisal Report should not expect to find all significant data reported.



The report must reference the existence of specific workfile information in support of the appraiser’s opinions and conclusions. The contents of the workfile must be sufficient for the appraiser to produce a Summary Appraisal Report. The workfile should be available for inspection by the client (or a client’s representative, such as those engaged to complete an appraisal review), state enforcement agencies, and such third parties as may be authorized by due process of law, and a duly authorized professional peer review committee, except when such disclosure to a committee would violate applicable law or regulation.





AO-12

A decision to use the Restricted Use Appraisal Report is absolute because the minimum level of information required in a Restricted Use Appraisal Report is not designed to address the needs of any third-party users. When an appraiser uses the Restricted Use Appraisal Report option, a prominent notice to any reader must be provided. The prominent notice must warn any reader of the report that the appraiser’s opinions and conclusions set forth in the report may not be understood properly without the additional information in the appraiser’s workfile. The Restricted Use Appraisal Report may be useful when:

the client is the only intended user of the appraiser’s opinions and conclusions set forth in the report;

the client understands the limited utility of this option;

the intended use of the appraisal warrants restricted disclosure about the appraisal process steps completed in the assignment; and

the client (the only intended user) does not need the level of information required in a Self-Contained Appraisal Report or Summary Appraisal Report.
This Advisory Opinion focuses on the use of the appraisal report options and should be read in conjunction with Advisory Opinion 11, which focuses on the content of the appraisal report options of STANDARDS 2 and 8.



I would love to see this "Restricted Report" being handed out. Perhaps they are right, perhaps not.

Apparently it has the blessings of the ASB ... two USPAP instructors in the past month have spouted the EXACT same thing. One handed out the text they use the other just said they did them. So .... this is what we are up against.

 

[JSmith43]

Apparently it has the blessings of the ASB ... two USPAP instructors in the past month have spouted the EXACT same thing. One handed out the text they use the other just said they did them. So .... this is what we are up against.

PE: Why would you want to be up against the ASB?

Then again, I guess in as much as I lobby for changes in standards, I am up against them. But, if they have a policy, they have a policy. I accept the policy even as I may lobby against it in some way

Bottom line: I don't see the point of harshly judging other practitioners that are following the rules for following the rules. And, I really have a hard time seeing the point of some posters who apparently want to mislead others, implying illegality/ non-USPAP compliance of their legitimate attempt at following the rules.

PE: That last part doesn't apply to you since you are disclosing the ASB position. So, we're cool, right?

 

[PropertyEconomics]

PE: Why would you want to be up against the ASB?

Then again, I guess in as much as I lobby for changes in standards, I am up against them. But, if they have a policy, they have a policy. I accept the policy even as I may lobby against it in some way

Bottom line: I don't see the point of harshly judging other practitioners that are following the rules for following the rules. And, I really have a hard time seeing the point of some posters who apparently want to mislead others, implying illegality/ non-USPAP compliance of their legitimate attempt at following the rules.

PE: That last part doesn't apply to you since you are disclosing the ASB position. So, we're cool, right?

Mentor .. my biggest issue is with doing a "compliant" restricted report and then accepting the second full assignment and saying its not contingent upon a predetermined value. I think the ASB is fully wrong here just as they were wrong in the March Q&As ... thats just my position. You cant preach one of complete ethics .. and then bless something that at the very least smells of being unethical.

And no we dont have a problem.

 

[EVAUSA]

Comp Checks, too much to say about nothing

Unfortunately for you, I believe you are full of it. Shall we get down to brass tacks and nuts about what you are NOT doing? As your so in compliance, you have nothing to fear. Right? Webbed.

My identity is not a secret, my user name is my web address and I'm sure the USPAP police can find me if they really want. But I'm not too worried in that department, unless USPAP is like the IRS and they never leave empty handed, my work-files are pretty clean. Over the years I've developed my own order form (with the help and suggestions of a couple USPAP instructors) that allows the client to decide whether they would like the assignment to continue with an inspection after a Preliminary Value Survey is completed from the desk. No need to waste anyone’s time and money for an inspection. I'm always interested in the input from a fellow USPAPian as you appear to be. So if you'd like to take a look at my order form and tell me if it's strong enough or where there's holes, I can send it to you, if you don’t mind. By the way, I'm staring at three banker boxes of 2007 "comp checks". I'd hope an audit would show how many assignments the values I didn’t push. Here in Ca, like many states, our USPAP investigators are understaffed, and if they are looking for comp check violators there is a real problem. I mean c'mon, are the ones telling the bank the house ISN'T worth it the real criminals?

You can call me Mrs. Smith

 

[Mike Kennedy]

"allows the client to decide whether they would like the assignment to continue with an inspection after a Preliminary Value Survey is completed from the desk. No need to waste anyone’s time and money for an inspection."

Is the Preliminary Value Appraisal to obtain a "Real" Appraisal Order .....referenced in the "Real" report with either the $$Fee paid OR the hourly rate $$ as a "thing of value" given to procure the "Real" Order?

 

[Mike Kennedy]

Section 8 of RESPA generally prohibits the giving (or acceptance) of any "thing of value" in connection with an understanding for, or to induce, the referral of real estate settlement service business involving a "federally related mortgage loan."


The definition of "federally related mortgage loan" is sufficiently broad so that virtually any transaction involving a purchase or sale of one to four family properties in which a portion of the purchase price is financed will be covered under RESPA, as well as any re-financing of any such property.


A "settlement service," for purposes of RESPA, broadly includes just about any conceivable service provided in connection with a prospective or actual settlement.

Examples of included services include mortgage loan and mortgage brokerage services, real estate brokerage services, title policies and services, attorneys’ services, notarization, preparation, delivery and recordation of documents, credit reports, appraisals, escrow, private mortgage insurance, casualty, flood, and homeowners’ warranty insurance.


A "referral" consists of any oral or written action directed to a person which has the effect of affirmatively influencing the selection of a provider of a settlement service or business incident thereto, when the person will pay a charge attributable in whole or in part to such settlement service or business.


A "thing of value" includes any payment, advance, fund, loan service or other consideration which is provided either directly or indirectly to a person referring settlement business.

A "thing of value" can take many forms -- money, discounts, services of all types at special or free rates, trips and payment of another person’s expenses.


Violation of RESPA Section 8 results in potential treble damage civil liability, and may result as well in criminal prosecution. In addition to the Department of Housing and Urban Development, any state Attorney General or Insurance Commissioner can bring an enforcement action under Section 8 of RESPA.

A record number of treble damage suits are presently pending, and yes, real people have gone to jail for violating the law. Criminal penalties can range from up to a $10,000 fine, or imprisonment for up to one year, or both. Both the person paying and the person receiving a prohibited payment are subject to the civil and criminal penalty provisions of RESPA.

 

[JSmith43]

Mrs Smith: You demonstrate sanity in your reply, with the one question lingering about why a sane person would antagonize torch carrying crusaders

 

[Bob Ipock]

No money is ever "wasted" We perform an appraisal and the client finds out what a property is worth. They get what they pay for....a professional opinion as to the value of a specific property.


NC Appraisereport August 2005


Comp Search or Appraisal?

Recently there has been a noticeable
increase in the number of requests
for a comp search. These may
take the forms of requests such as
“We need comps for this property
that will support a loan of $100,000.
Please provide 6 sales.” Usually the
client will state that there is no need
for a property inspection or any other
fieldwork. Often the fee, if there is one,
is minimal.
Some appraisers consider this type
of a request a preliminary appraisal. If
they feel they can get the value the
client wants, they inform the client and
hope to receive an assignment for a
“full” appraisal.
Appraisers need to understand
that whenever they give a value or
range of values for a property, they are
doing an appraisal. The comment to the
definition of “Appraisal” in USPAP
states “An appraisal must be numerically
expressed as a specific amount, as a
range of numbers, or as a relationship
(e.g., not more than, not less than) to a
previous value opinion or numerical
benchmark (e.g. assessed value, collateralvalue).”
If appraisers do a comp
search and tell the client that they have
6 comps that would support a loan of
$100,000, they have performed an
appraisal.

There is no such thing as a preliminary
appraisal. If an appraiser values a
piece of property in any way, it is an
appraisal, and both Standard 1 and
Standard 2 apply. If the appraiser gives
the value orally, the appraiser must
comply with the requirements of
Standard Rule 2-4.