More On Free Comp Checks

[jnordquist]

you are a fool to allow a lender to owe you $6000.

Depends if they pay or not. I would let some of my lender/bank REO clients get that high if they have a good payment history with me. Mortgage Brokers COD only!!! The truth of the matter is everyone I deal with normally pays in 30-45 days, so I don't think I can produce enough to one client in 30 days to equal $6000, unless I dumped every other client I have.

 

[Mr Rex]

The NC Banking Commision has NC Appraisers backs. Once a lender gets that nifty letter from the NCCOB, a check usually follows within 10 days or less.

http://www.nccob.org/NCCOB/ConsumerAssistance/ComplaintInfo/appraiser.htm

 

[Joyce Potts]

Scrap USPAP and start over. Install a federal appraisal vault with FRT ID numbers and remove or at the very least AMEND the intended user. Any borrower that's a nickle of his own money in deal facilitated by an appraisal, IS AN INTENDED USER, PERIOD.

 

[kristin0731]

If I am busy, I tell those guys to go fly a kite. But, remember that there is nothing wrong with giving a range of values as long as you conform to USPAP. I typically offer to do a drive-by appraisal for a reduced fee providing only a range of values. They must pay in advance of course. If they think the range I provided will "make their deal", I will then do a full appraisal for the remainder of the fee. This doesn't work with everyone but getting them to go through with it sometimes is better than getting no work at all.

If they won't even do that, then you don't need them as a client! And who on earth would get an Accounts Recievable of $20,000 before deciding to go COD! We only allow billing for large commercial assignments and even then half of the fee must be paid upfront with the other half being due prior to us delivering the report. A co-worker of mine refuses to grow a back bone and tell these people that he must be paid upfront and he already has three appraisals this year that he hasn't been paid for! I guess once he racks up $20,000 he will get the point.

 

[Webbed Feet]

<.......snip......>I typically offer to do a drive-by appraisal for a reduced fee providing only a range of values. They must pay in advance of course. If they think the range I provided will "make their deal", I will then do a full appraisal for the remainder of the fee. <......snip.......>

I'm only posting to say I think your method is just fine. However, it would be good to express your billing method slightly differently and think of it differently. Instead of "for the remainder of the fee," you should view and communicate it as "for an additional fee." The former way of saying it sorta smacks of a contingency fee situation even when it clearly is not. You would not want to write up an engagement contract using "remainder" wording like that.

Just a suggestion..

 

[kristin0731]

Yes - thank you for clearing that up - it is not a contigency fee! I would just charge an additional fee. I only mentioned it as the remainder of the fee because if I would typically charge $300 for a full appraisal and already charged $150 for the drive-by, I would charge an additional fee of $150 for the full report.

Thanks for the suggestion... and understanding.

 

[Webbed Feet]

There you go! The engagement(s) can include two separate assignments for two separate fees, two different SOWs. "Separate" might be even a better word than "Additional."

Personally, I do think that the business costs of "Drive-by A" + "Interior SOW B" = Greater Than only a "Interior SOW C" as far as your costs and time go.... So therefore

The sum of A + B should be Greater Than just C in my opinion. But what you charge is your choice..

 

[AzaleaAA]

One lender wanted me to refund the appraisal fee cuz it didn't make value

OK, I am STILL getting requests for FREE comp checks even though it is against banking laws in other words "illegal". One lender recently sent me the order when I educated him. He was very professional. Word is some states allow free comp searches, and RE brokers do them all the time. When everyone makes it forbidden then we will see some headway.

Others who insist they need to see the market, before they proceed to process a loan, I tell them, "I can send you a CMA spread sheet of the neighborhood" which is considered a "data" search with no value opinion. I charge for this and they pay upfront by paypal if they order it.

If they ask me why I have to charge I tell them because I have to pay for my data resources and my desk time to do the search is worth something since I do not work for FREE. :blush: If they want a FREE comp search, I tell them to use Zwillow or the other free value check sites. I tell them that it is my experience that they are unreliable for my area but they get what they pay for.

Also, one lender was so upset when we didn't "MAKE THE VALUE NEEDED" that they wrote me a email insisting that I refund the appraisal fee to the borrower. I have saved this written request and wonder if this lender is still doing business.

 

[Pamela Crowley (Florida)]

AzaleaAA, please forward anything you get like that to me:

pec514 @ yahoo. com (remove the spaces)

 

[AzaleaAA]

"This is what I have been talking about the last couple pages. Couple pages back someone linked to a ASB answer regarding comp checks. The way I read it if the MB or LO requests sales data and the appraiser does no filtering it is just sales data.

Which means your MB/LO needs to tell you the street name only and if they want sales within a certain distance or if they want sales in the subdivision then all you need is the subdivision name.

I made the same staement couple pages back and even putting in 1/2 mile distance you are filtering and therfore is an appraisal and must meet USPAP.

Another thing we discussed if you have no subject property you have no appraisal so you don't want anything from the MB/LO that clearly defines the subject or more location than just street. "

Mike said "I was considering developing a sales request form that a MB/LO could fill out and I could send a list of sales within their defined criteria. I would not be filtering them and they could look at sales and determine if it's worth it. I can run a list of sales and e-mail it in a couple minutes. So if a couple minutes of my time can get me a full appraisal without having to give them a # upfront I am all for it".

Now you get the picture I was trying to paint. I use a "data order form" i created. It is very generic and open ended. The "orderer" tells me the parameters, I do the data search, they pay up front, they determine if the market they outlined supports they value they need.

They have no say so in which comps I choose use later and I do not form a value opinion untill I do the appraisal.

Our RE Brokers are advertising in our local paper to do free BPOs for anyone wanting to know the value of their property. They say they are doing this as a service to the home owners who need to check to see if their property values have declined. This is and appraisal in my opinion, and probably forbidden, but they are doing it and publicly advertizing for it. Lenders are ordering BPOs from brokers for forclosed properties instead of appraisals and PAYING THEM. The banking laws allow them to do this. This needs to stop as well.