My 1007 Test

[Addie]

Doing a test 1007 for my supervisor to gauge how I'm coming along.

Test. Client orders a 1007 standalone to comply with USPAP only.

Me coming here is probably cheating but hey, so are calculators and books.

1) Starting at the beginning. I'm under the impression this is an appraisal report or restricted. So I included the USPAP addendum and checked restricted report (taking liberties to only 1 client in this test) I did exposure time too.

2) I have intended user, use and client. (just wrote my own in on blank page) I wrote my own Scope of Work: "This report is for an opinion of market rent relating to the rights to occupy and use space for a specific period of time (Leased fee interest). The opinion of monthly market rent is $x. The appraiser did not physically inspect the property from the interior, exterior or in person in any way. The appraiser performed everything from their desk. No field visit was performed. The appraiser believes the data sources used in this report are accurate to conclude credible assignment results." I have next all my data sources used. legal desc/APN, map etc. (the hypothetical subject is a pending listing pulled from MLS)

3) This is where my main question comes in. Since I'm thinking this standalone has to adhere to USPAP standards 2. I have to state my market value definition and its source. I can not for the life of me find a definition of market value for rent and a source. So am I allowed to copy paste market value from USPAP and modify it and as my source say it from USPAP and modified to fit market value of rent? USPAP market value has in it "passing of title from seller to buyer" this does not apply.

Along the lines of this question, is everyone citing their source for market value definition for 1004's? USPAP says state definition and its source.

 

[Addie]

OK, changed it.

Scope of Work: This report is for an opinion of market rent relating to the rights to occupy and use space for a specific period of time (Leased fee interest) of said property (attached is the legal description) The appraiser did not physically inspect the property from the interior, exterior or in person in any way. The appraiser performed everything from their desk. No field visit was performed. The appraiser believes the data sources used in this report are accurate to conclude credible assignment results. This report is meant to adhere to USPAP as stated in the engagement letter. A 1007 form was used as the client requested and are set-up to intake. Reporting requirements of this appraisal report form, including the cited definition of market value for monthly rent. The appraiser identified the characteristics of the subject property that are relevant to the purpose and intended use of the appraisal, researched, verified, and analyzed data from reliable public and/or private sources. At least 3 rental comparables will be used. The appraiser will report their analysis, opinions, and conclusions in this report.

 

[Michigan CG]

Yes you need to include a definition of the value you are reporting but it isn't Market Value, it is Market Rent. Considering you have someone that is training you I assume you have access to the Dictionary of Real Estate, 6th Edition. The definition you seek is in there.

 

[DWiley]

As part of the SOW you need to explain the approaches you used (and did not use) to develop the opinion of market rent. What about a certification? Use any EAs?
Just look through the report requirements in STD 2 and use that as a checklist.

 

[George Hatch]

I *always* cite the source of my definition of value(s).

 

[Addie]

Yes you need to include a definition of the value you are reporting but it isn't Market Value, it is Market Rent. Considering you have someone that is training you I assume you have access to the Dictionary of Real Estate, 6th Edition. The definition you seek is in there.

Awesome. Thank you. I was looking everywhere for a definition of it and a source to cite.

 

[Addie]

As part of the SOW you need to explain the approaches you used (and did not use) to develop the opinion of market rent. What about a certification? Use any EAs?
Just look through the report requirements in STD 2 and use that as a checklist.

Thank you. I was fully expecting to fail my 1st test as I did. SOW might be over my head for now but gave it a go.

No EA’s. Just regular assumptions. House was pending MLS. I said assume house still standing and in condition MLS#xx represents.

I was using that as my checklist. Just didn’t know where to find market rent definition and source. Obvious SOW confusion. But was going through std 2. Did h&b use, characteritics etc.

Anyway. Thanks.

 

[Addie]

Still not your scope of the work.

Get a USPAP book and try again.

And MCG is correct you need both a defined value and a citation for that value definition.

Just sad

.

You weren’t of much help. While MCG is correct. That was part of my question that made you cry. So I was also correct, just didn’t know where to find it. But st least I knew what value I was going for and Knew had to cite. All the appraisals I’ve seen never ever cited a source.

 

[DWiley]

All the appraisals I’ve seen never ever cited a source.

If you are like many, most (or perhaps even all) of the reports that you have seen have been on Fannie forms. When using a Fannie form, the MV definition is pre-printed right on the form, which serves as a citation of the source in and of itself.

 

[Addie]

If you are like many, most (or perhaps even all) of the reports that you have seen have been on Fannie forms. When using a Fannie form, the MV definition is pre-printed right on the form, which serves as a citation of the source in and of itself.

Not questioning you. I believe you. But in this day and age with lawyer speak. Where did the appraiser ever cite the source?

Just like on the FNMA form has check box for h&b use doesn’t mean it fulfills USPAP.

USPAP says cite the source. It’s common sense that source is FNMA. But USPAP doesn’t say use common sense.