More On Free Comp Checks

[JSmith43]

I see it in these terms. You can't claim to be a virgin if you sleep around. You are only a prostitute if you charge for things that are illegal. If your peers don't agree with sleeping around, then you must be a *****. MHO, YMMV. Nothing personal. Carry on.

Quote from hottie gal in a Rambo spoof movie starring Charlie Sheen & the hottie: "I'm a virgin.......... I'm just not very good at it."

 

[EVAUSA]

"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?

The "real" report does not disclose the "comp check". Just like when I do a 2055 for a client and it is upgraded to a 1004, it is a second report. When "comps" are ordered, we will look up sales from the desk and this service is typically free. We send the client our "Preliminary Value Survey" (form created to comply with USPAP) and wait for a "Confirmation" to upgrade assignment to an inspection. It is stated that the value may or may not fall within the previously given range, as the scope of work has increased with the new assignment, new data may reveal information that was not available in "comp check". If the "comp check" is difficult, there is usually a flat fee for the service, $25 to $50. But usually, no charge. The upgrade appraisal (ex:1004) is billed or COD. I'm guessing what your getting at is doing the second appraisal could be considered "accepting an assignment with a predetermined value" if not completed properly. That is why each is treated as their own assignment, new scope of work. I hope that answers your question.

 

[Mike Kennedy]

The "real" report does not disclose the "comp check". Just like when I do a 2055 for a client and it is upgraded to a 1004, it is a second report.

When "comps" are ordered, we will look up sales from the desk and this service is typically free.

All sales or filtered comparable sales ??

"We send the client our "Preliminary Value Survey" (form created to comply with USPAP) and wait for a "Confirmation" to upgrade assignment to an inspection."

Is the second value then termed a Supplemental Value as the first one was termed "Preliminary"


Does this mean "the confirmation" order is contingent upon successful results from the "preliminary value" ?


How does providing this free (or dramatically discounted) service NOT fall under the RESPA definitions prohibiting:

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.

How does providing that "good customer service" for free or at a dramatically discounted rate and NOT disclosing it jive with:

http://commerce.appraisalfoundation.org/html/USPAP2008/FAQ/faq_21_.htm

 

[JSmith43]

which is provided either directly or indirectly to a person referring settlement business.

What lines in 2006 USPAP reference this? I'd like to see the context so I can see if there is a reason that this refers to taking a new assignment and rather than a bird dog fee, etc.

 

[EVAUSA]

In response to your questions:

Question: All sales or filtered comparable sales ??
Answer: Filtered sales, the comp check is an appraisal and I try to give an accurate sales range.
Question: Is the second value then termed a Supplemental Value as the first one was termed "Preliminary"
Answer: The second value is not termed anything, it is the "Appraised Value" based on the new scope of work. Both the first and second value is the "Appraised Value" as defined by their individual scope of work.
Question: Does this mean "the confirmation" order is contingent upon successful results from the "preliminary value" ?
Answer: I dont know what the "successful results" would be, I dont ask what value they need or want. But we both know that they will decide to order the second report only if they think they have a loan based on my value range, but that's not up to me. BofA likes to order 2055's, if the 2055 value is "too low" for their loan, they upgrade to a 1004. Is the only difference that BofA pays for the 2055? If yes, why does it matter? If I tell BofA 2055's are free, now do I have a problem? ...confusing :Eyecrazy:
Question: How does providing that "good customer service" for free or at a dramatically discounted rate and NOT disclosing it jive with:http://commerce.appraisalfoundation.org/html/USPAP2008/FAQ/faq_21_.htm
Answer: My first report is free or discounted whether or not they order the second. I get paid for the second report whether or not escrow closes, whether or not it falls in the range of the comp-check. But I do want to be sure all disclosures are made and I’m in compliance with USPAP (Disclosure of fees, commissions, or things of value connected to the procurement of an assignment must appear in the certification and in any transmittal letter in which conclusions are stated.) Should I add something of this affect to the Certification & transmittal letter, “It was the client’s decision to order this 1004 form appraisal based on the results of a free, restricted use, desk appraisal.”?

Thanks,
April

 

[EVAUSA]

It's not "finally." I always did understand they are real estate appraisals. That was never the point or the issue as far as trying to argue that they are something else. The fact they are appraisals is what makes the entire argument in the first place.

Webbed.

My first post stated they ARE appraisals, so then who are you arguing with?

 

[Bill_FL]

Who does your taxes? We can't charge those off. An appraiser can take el zippo for anything tax wise as a bad debt for unpaid appraisal fees. Maybe you meant that differently than I am thinking.

Webbed.

Webbed, that would depend if your business' books are kept on a cash basis or on an accural basis.

If you show income as those orders recieved, then unpaid bad debts are charge offs. If you are on a cash basis and show income as what money is received, then you would be correct, you can not charge them off.

 

[Mike Kennedy]

In response to your questions:

Question: All sales or filtered comparable sales ??
Answer: Filtered sales, the comp check is an appraisal and I try to give an accurate sales range.
Question: Is the second value then termed a Supplemental Value as the first one was termed "Preliminary"
Answer: The second value is not termed anything, it is the "Appraised Value" based on the new scope of work. Both the first and second value is the "Appraised Value" as defined by their individual scope of work.
Question: Does this mean "the confirmation" order is contingent upon successful results from the "preliminary value" ?
Answer: I dont know what the "successful results" would be, I dont ask what value they need or want. But we both know that they will decide to order the second report only if they think they have a loan based on my value range, but that's not up to me. BofA likes to order 2055's, if the 2055 value is "too low" for their loan, they upgrade to a 1004. Is the only difference that BofA pays for the 2055? If yes, why does it matter? If I tell BofA 2055's are free, now do I have a problem? ...confusing :Eyecrazy:
Question: How does providing that "good customer service" for free or at a dramatically discounted rate and NOT disclosing it jive with:http://commerce.appraisalfoundation.org/html/USPAP2008/FAQ/faq_21_.htm
Answer: My first report is free or discounted whether or not they order the second. I get paid for the second report whether or not escrow closes, whether or not it falls in the range of the comp-check. But I do want to be sure all disclosures are made and I’m in compliance with USPAP (Disclosure of fees, commissions, or things of value connected to the procurement of an assignment must appear in the certification and in any transmittal letter in which conclusions are stated.) Should I add something of this affect to the Certification & transmittal letter, “It was the client’s decision to order this 1004 form appraisal based on the results of a free, restricted use, desk appraisal.”?

Thanks,
April

http://commerce.appraisalfoundation.org/html/USPAP2008/index.htm

BIAS: a preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment.


Conduct (ETHICS RULE)

An appraiser must perform assignments ethically and competently, in accordance with USPAP.

An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.

An appraiser must not advocate the cause or interest of any party or issue.

Management section of the ETHICS RULE, which states, in part:

It is unethical for an appraiser to accept an assignment, or to have a compensation arrangement for an assignment, that is contingent on any of the following:

:icon_idea: a direction in assignment results that favors the cause of the client;

AO-19

Unacceptable Conditions (AO-19)

Certain types of conditions are unacceptable in any assignment because performing an assignment under such conditions violates USPAP. Specifically, an assignment condition is unacceptable when it:

• precludes an appraiser’s impartiality, because such a condition destroys the objectivity and independence required for the development and communication of credible results;
• limits the scope of work to such a degree that the assignment results are not credible, given the INTENDED USE of the assignment;

http://commerce.appraisalfoundation.org/html/USPAP2008/AOs/ao_02_minimum_.htm


It is the appraiser’s responsibility to determine the appropriate scope of work, including the degree of inspection necessary to produce credible assignment results given the intended use.

The appraiser must ensure that the degree of inspection is adequate to develop a credible appraisal. An appraiser cannot develop a credible appraisal if adequate information about the relevant characteristics of the subject property is not available. When adequate information about relevant characteristics is not available through a personal inspection or from sources the appraiser believes are reliable, an appraiser must withdraw from the assignment unless the appraiser can:

• modify the assignment conditions to expand the scope of work to include gathering the necessary information; or
• use an extraordinary assumption about such information, if credible assignment results can still be developed.

An appraiser’s observations must, at the minimum, be thorough enough to properly develop the appraisal and adequately report the relevant characteristics.

Regardless of how the information is gathered, it must be sufficient for the development of relevant analyses, such as

highest and best use,

the application of the approaches, etc.

 

[Mike Kennedy]

http://appraisersforum.com/showthread.php?t=136953

 

[JSmith43]

All of those elements can be met in a desktop assignment without much sweat, Mike. All relative to purpose and scope.

But, what Mike illustrates is that, depending upon the make-up of your local board, the results will vary no matter what the assignment.

I would call it an example of what Milton Friedman called the Tyranny of the Status Quo. Special interests will pick at your bones.