NC Appraisal Board Appraiser Report Feb 2024

[CGinMN]

Where does a "client" REQUIRE an adjustment? If true, how many? Must all comps be adjusted? What is the minimum number of adjustments? At what point does a sale not require an adjustment?

I recall years ago when the same builder built all the houses to the same spec (some left-handed to the others) same SF and built them in the same year. 5 years later I appraised one and made zero adjustments because the three sales were within $1,000 of each other. These were cheap FHA funded houses - 1 carport, brick veneer, 3 bed, 1 bath, open kitchen-living area about 1,000 SF. Should I have done more?

Cert 9 on the 1004 states "I have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subjectproperty and the comparable sales."

 

[Terrel L. Shields]

"I have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subjectproperty and the comparable sales."

And if there are no differences - report them anyway. Got it.

 

[John Hassler]

And if there are no differences - report them anyway. Got it.

Making no adjustments is an appraiser decision when your SOW indicates adjustments will be made when necessary.

 

[Zoe]

Yes, this was a personal matter between the board member and the party with the complaint. The board member should have recused themselves. We've had former board members who surrendered their license while on the board. We've had past board chairs who were sanctioned and again there seemed to be an element of personal animosity between him and another sitting board member. They did compete in the same market so I cannot confirm that there was any personal angst but the sanctioned party did feel like it played a role.

That has played a role between the major appraisal organizations. That problem still exists. Appraisal Institute has moved into more of a game player than some of the other appraisal organizations. One primary reason is because many of the appraisal institute members are head owners and leaders over AMCs. Do you see the dichotomy involved in non separation of fees and other biased interests?

No doubt in my mind it can exist on appraisal boards.

 

[Zoe]

Sure you can. Carrot and stick. But the incentives are all wrong. The carrot goes to the corner cutter; the stick goes to a competent appraiser who sets their fees based on the required scope of work. In the secondary market world, there is no incentive to be competent and provide a well-supported appraisal; in fact, it is clearly disincentivized. These are market forces at play.

I agree, there are too many conflicting biased interests in the whole structure of real estate appraisal profession from top to bottom of the whole professional leadership.

Too many conflicts of interests and biases involved starting at the top and filtering down through the structure.

 

[George Hatch]

There are two answers. 1-USPAP does not say that you have to make adjustments or use a certain number of comparables. And yes, qualitative analysis is a recognized method. 2- The Client requires both and therefore, if you accept the assignment, you have to do it.

That comment should be a sticky. User-driven requirements are part of the assignment.

 

[sputnam]

Where does a "client" REQUIRE an adjustment? If true, how many? Must all comps be adjusted? What is the minimum number of adjustments? At what point does a sale not require an adjustment?

I recall years ago when the same builder built all the houses to the same spec (some left-handed to the others) same SF and built them in the same year. 5 years later I appraised one and made zero adjustments because the three sales were within $1,000 of each other. These were cheap FHA funded houses - 1 carport, brick veneer, 3 bed, 1 bath, open kitchen-living area about 1,000 SF. Should I have done more?

Read the all of the preprinted stuff on the Fannie form that you are routinely using to report residential appraisals. Of course... If your comparables are all identical to the subject, there are no adjustments to be made. And, of course, in any necessarily general discussion... there is always at least one who says..."well, not every...."

 

[Terrel L. Shields]

Again, if I have 3 similar comps, then the closest those comps are to the same price, at some point, making any adjustment will result in a larger range in value than the range encountered without making an adjustment. The purpose of adjusting is to reduce the spread, not widen it. In that case, ranking the sales makes more sense.

 

[CGinMN]

The purpose of adjustments is not to reduce the range, it is to reflect the market reaction to the differences.

 

[Carnivore]

The NC Board is not out to get the appraiser as a result of a complaint. below is the actual process.

The North Carolina Appraisal Board welcomes you to its Web site

All complaints must be in writing. The Board will not investigate verbal complaints and does not have the authority to open anonymous complaints. In certain situations, the Board may, on its own motion, open a complaint. See Board Complaints Policy.

Once a written complaint is received, a determination is made as to whether this is an appropriate matter to be investigated by the Board (for example, does the Board have jurisdiction, is it a request for advice). A letter is sent to the Complainant acknowledging the complaint. The Complainant is not a party to the complaint and does not have control over the course of the case, but they may be a witness should a hearing be required. A letter of inquiry and a copy of the complaint is sent to the Respondent requesting a response. Routinely, Board staff requests a copy of the appraisal and the file notes from the Respondent. (aka Workfile) Upon receipt of the response, the complaint is more thoroughly investigated.

If a decision is made not to open a complaint, it will be reviewed by the Board's Predetermination Committee. The committee will decide whether to investigate the matter or close the allegation. So this is Interesting, because the Accused Appraiser may never know about a complaint.


From what I can remember the reasoning behind no revocations and no $fines is the additional CE cost the offending appraiser time and money. Financially Fast Eddy is losing money because of lost time completing other valuations. If I understand it' the extra CE can not be used towards your bi-annual minimums.

My biggest issue with this process is it is very unfair towards the Appraisers who are following the rules and regulations.


















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