More On Free Comp Checks

[Webbed Feet]

Time Bombs. It will only take just one.

Pam I dont relate to these type of Comp checks. I get a different type. I have regular clients. They give me 95% of their work. They ask for me to check every property. My fee is not contigent on the value. If the value is way off the Sales price then they renegoiate or move on. Or they base the sales price on the value I arrive at. Why would this type of comp check conflict with ethics? My fee or getting an order or not connected. I get the orders because I am their guy.

One of the most glaring problems here is it's not a free "comp check," it's really a free real estate appraisal employing a vastly inferior SOW that other parties are now turning around and acting on all the way up to, and including, altering sales prices in real estate contracts. And so doing based on what has to be their total lack of understanding of the depth of lacking regarding the inferior SOW being used. And what we have here is a real estate appraiser that cannot get it into their thinking tool in their skull what is going to happen the moment they end up in court getting sued by one of the people that not only a court, but the state appraisal board as well, is going to declare to have been an intended user of the appraisal assignment, and declared to be so regardless of whatever the appraiser tries to claim. Especially, because it will come out that appraiser knew all along their client had parties to sales tranactions using the work to rely on for sales contract renegociations BEFORE the so-called second "Appraisal" was ever ordered that employed a SOW to the industry standard for lending. Just one legal hit, and only one, from having never thought this through is all it is going to take to make this free "customer service" the stupiest thing the person doing it has ever done in their entire career as a real estate appraiser. I hope this appraiser enjoys all the YEARS of time bombs this appraiser has left in their long trail of so-called customer service.

 

[Ken B]

In California there is no requirement to comply with USPAP in regards to a "comp check."

Per USPAP, compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation, or by agreement with the client or intended users.

In California Appraisal is defined as:

"Appraisal" means a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information.

California Business and Professions Code, Division 4, Part 3, 11302 (b).

Since a "comp check" is almost always used by brokers/LO's etc. as a preliminary step before asking their client to spend money on an appraisal or spending it themselves and not the actual report used in the underwriting process then it is not part of a federally related transaction and at this point there are no other intended users.

Where is the requirement for USPAP compliance?

What, life was a little boring for you this fine Monday morning? If anyone strokes out and it can be determined your post is the cause, would you be liable for involuntary manslaughter?

 

[TC]

If we are that picky I think those red thingies would have been needed in your sentence! ... LOL

your write.

Alright, English teachers.

I'm simply basking in the rare moment that Rescom and I see something from the same side.

Hey, I have a lot of free time on my hands since May 1.

 

[JSmith43]

In California Appraisal is defined as:

"Appraisal" means a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information.

California Business and Professions Code, Division 4, Part 3, 11302 (b).

Since a "comp check" is almost always used by brokers/LO's etc. as a preliminary step before asking their client to spend money on an appraisal or spending it themselves and not the actual report used in the underwriting process then it is not part of a federally related transaction and at this point there are no other intended users.

Where is the requirement for USPAP compliance?

Someone get out the bat signal, or is it the board signal (surf board). We need to at least pass this analysis through the George Hatch filter.

I will assume Greg's analysis is correct, for now. It gives me a mixed reaction, since I don't like appraiser shopping, but I do fully agree with the principle that an appraisal "birthing" should be a solemn & deliberate act, memorialized in writing and not the verbal musings of someone that happens to be a licensed appraiser.

My guess is that in most states, compliance with USPAP is incorporated into licensing statutes without such modifications to the definition of what constitutes an appraisal. Greg's point is that the State of CA has defined the birthing of an appraisal that would make it come under the coverage of licensing.

Or, this really is Greg's sick attempt at stirring up the crowd

 

[Webbed Feet]

In California there is no requirement to comply with USPAP in regards to a "comp check."

Per USPAP, compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation, or by agreement with the client or intended users.

In California Appraisal is defined as:

"Appraisal" means a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information.

California Business and Professions Code, Division 4, Part 3, 11302 (b).

Since a "comp check" is almost always used by brokers/LO's etc. as a preliminary step before asking their client to spend money on an appraisal or spending it themselves and not the actual report used in the underwriting process then it is not part of a federally related transaction and at this point there are no other intended users.

Where is the requirement for USPAP compliance?

Very stupid definition. Especially as Fannie, Freddie, VA, FHA, Ginnie Mae, and maybe some others were all given exclusions under the FRT standard and therefore have not been FRT for about as long as I've been in this business. So CA, in it's vast wisdom, defined almost all secondary mortgage market real estate appraisals to not be real estate appraisals... LMAO!!!! THAT one is going to hold up very well I bet... NOT!

Like I said, just let this one play out in civil court if and when any seller or buyer comes back later with legal action against the appraiser whose "comp search" was used to renegociate a sales contract with. I will not hold my breath regarding what, even in CA, judge in a court of law determimes what it is when any licensed or certified real estate appraiser utters an opinion of value regarding a specific piece of real estate. I'll just make a prediction if it has not already happened. That judge is going to determine that utterance, oral or written, was a real estate appraisal due to the expectations of the parties that knew it was coming out of a real estate appraiser. Especially, if that appraiser knew what those parties intended to do with that utterance. End of story. The state appraisal board may not under their administrative rules think it is one, but so what? Apparently they didn't think every report ever sent to Fannie out of CA was either.

 

[rescom]

Your post lacked just a wee little bit of the impact it could have had if you would have spelled genius correctly.

What can I say? I had been drinking all day. :new_all_coholic:

I decided that the best thing to do was to get on the AF and drunk reply. I'm surprised that was the only word misspelled.

 

[rescom]

Alright, English teachers.

I'm simply basking in the rare moment that Rescom and I see something from the same side.

Come on now. I really am a nice guy. Now join me on the dark side of the force!

:new_asthanos::new_asthanos:

 

[C Alexander]

english anyone?

Alright, English teachers.

.....make that all right for the zealous editors in the forum :Eyecrazy:

 

[fifteen]

Ca is backing up my contention that the USPAP definition is that an appraisal needs to be "expressed" in some form of writing as a value or range of value based on filtering. I don't believe a spoken value range always consititutes an appraisal as, who's going to prove it? Unless the conversation were recorded (illegal in most states and only legal in some states if you get the other persons consent to record the conversation) or there was more than 1 person on the phone listening at the LO office, they'd have no proof. The only possible proof that would stand up in court that someone could have is written or expressed in written form (ie.. handing a LO 10 MLS comps for an indicated range, writing a figure down on a slip of paper, etc). Nothing written, no proof.

I'm not saying it's right, but who's going to prove it's wrong?

 

[CANative]

States have appraiser licensing laws in order to comply with FIRREA which pertains to lending by federally regulated/chartered institutions. Who cares if a private lender makes bad lending decisions... the capital is not from federally insured deposits.

State appraisal laws are there as a matter of compliance not consumer protection. The problem with the system is that the feds have only one weapon with which to fight. It's a nuclear weapon (withdraw a states ability to participate in federal lending) and therefore can't be used.

Still, I don't like "comp checks" as a regular part of an appraiser's practice because it destroys the appraiser's ability to remain objective in the subsequent assignment (if there is one.)