More On Free Comp Checks

[EVAUSA]

I'll send them MLS sheets on all sales in the subdivision within 20% of the subject's size for them to see whats sold.

By defining a property address and criteria (20% of GLA), you have now provided a value high and low (in CMA) for a SUBJECT PROPERTY, and it's still is an appraisal. Instead, don’t get a street number, street name only, then send them a CMA of everything in the neighborhood, but don’t narrow it down for them in any way, NO CRITERIA, NO SUBJECT PROPERTY. "Attached is a CMA for the XX track" or "for sales data within 1.0 miles of X Street."

 

[Mister Ed]

As stated, I can see making the assumption that something may not have been done in compliance with USPAP. However, it may or may not be true. Too many questions not answered to make the assertions.

Did the client define the parameters? etc.

 

[Gajope]

NCAB has devoted a good part of their newletter to comp checks. See the USPAP Q&A section

http://www.ncappraisalboard.org/bulletins/Aug08.pdf

 

[MarcMangan]

Thats good to know. Thank You EVAUSA. As stated, I don't tell them the sales are within 20%. I just state that these are the sales in the subdivision. Good point though and I will do as you suggest in the future.

 

[PJK03]

Are you serious?

Is someone still doing comp. checks? I thought it is against USPAP. This profession is just going to keep on the decline, until appraisers stop being secretaries for underwriters.

 

[Gajope]

PJK - look at USPAP Q&A in this NC newsletter to educate yourself on comp checks - not illegal, but you have to be careful and follow USPAP.


http://www.ncappraisalboard.org/bulletins/Aug08.pdf

 

[JSmith43]

PJK - look at USPAP Q&A in this NC newsletter to educate yourself on comp checks - not illegal, but you have to be careful and follow USPAP.


http://www.ncappraisalboard.org/bulletins/Aug08.pdf

The NC example is pretty good. The answer is incorrect, or unclear at best regarding the response to the question about a "comp check" done for free.

The answer says the appraiser is to ensure that receiving a subsequent assignment is not contingent upon the results of the "comp check" assignment.

It needs clarification. If the lender says something like: If you don't come in somewhere between $200,000 and $220,000 on the "comp check" assignment, you won't get a request for a full URAR. Arguably, that may put an appraiser in conflict, even though they are technically separate assignments.

Best to not know the lender's trigger point. What if assignment 1 is a paid assignment at the appraiser's going rate and the so called trigger point for the subsequent assignment is known? All sorts of problems with that one, where there should be no problem. The report should stand on it's own.
But, that's life in regulation city.

An appraisal of a lesser scope, say, a restricted use report with the purpose to screen for transactions is a valuation product that may make sense. NC newsletter is unclear if such a report option is allowed. Of course the results are what the client is going to use to determine if a URAR should be ordered. It is the same logic for starting with a level one environmental assessment.

They fell short on clearing up this mess. But, it is understandable. Maybe in a follow-up issue they could do the industry a favor and take a clear stand on this narrow point.

 

[Gajope]

I agree. The problem is that the only reason a comp check is asked for is in order to determine whether or not a full appraisal will be ordered. So you must treat a request for a comp check as a request for an appraisal in and of itself. BUt even then, you still know there is a potential bigger assignment out there, depending on your first value...Thus there is probably no real way to get around being able to follow USPAP and complete a comp check. Whether it is for free or for a fee. and whether or not the client puts an estimate of value on the request for a comp check which is a whole other issue.

 

[Webbed Feet]

Mentor,

I think you have had an "oops" here. .. If I read that NC publication correctly they have simply copied a Q&A from the ASB. That answer regarding comp checks for free is not from the NCAB at all, it is from the ASB. Other than that I agree with you. The answer sucks as far as the entire issue is concerned. Another poor answer from the ASB. Technically correct, but poor given the entire issue regarding life in the trenches. AGAIN, they hang the appraisers with sweeping little matters like just exactly HOW are appraisers supposed to "ensure" the assignment has no following contingencies regarding the phasing of a next assignment dependent on the outcome of what is really a "desktop" appraisal service.

Once again, many of these Q&A's from the ASB really are "solve nothing" answers for the ethical real estate appraisers and actually accomplish nothing more than opening a door for real estate appraisers that are not ethical to use a bunch of excuses for their behavior.

 

[Webbed Feet]

P.S.

A very long time ago I suggested to this forum that we define a new vernacular that labels a "comp check" comment to be a "Comp Check C," for compliant and a "Comp Check N" for non-compliant, just so we all could finally understand what everyone was posting about. ... I was laughed at, which is ok. ... Yet here we have more appraisers posting they thought comp checks are illegal and that they are not. I think for an entire country of supposedly trained real estate appraisers this never-ending confusion and debate about a label ("Comp Check") is just stupid.

I'll post again and happily be laughed at again. Why don't we all stop with the idiotic slang? ... It is so bad even the ASB has now gotten sucked into it! ... It is all really simple folks!!! We are talking about real estate appraisals that are compliant with USPAP versus real estate appraisals that are not compliant with Standards. Why don't we all just type a little more and stop with the meaningless slang? ... Everyone will look much more professional and at least know what the other appraiser is posting about.

Sheesh!