Bob Ipock
Elite Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified Residential Appraiser
- State
- North Carolina
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NCAB proposed rule changes
- Thread starter Bob Ipock
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Thomas Holding
Junior Member
- Joined
- Jan 22, 2004
- Professional Status
- Certified General Appraiser
- State
- North Carolina
Draft Reports
North Carolina appraisers really need to read the proposed USPAP rule changes regarding "Draft" reports. Most residential appraisers have never been asked to do a draft report and don't really know what one is. From my experience, attorneys will ask for them during the preparation of a legal case to evade disclosing certain information during the discovery process. There are also other reasons why draft reports are requested, but they are not allowed in North Carolina (for good reason in my opinion). These proposed changes to USPAP would now allow for draft reports. This could potentially be devastating for residential appraisers. The banks are pushing this one through in order to hamstring residential appraisers even more.
Imagine a scenario like this. You get a residential order. By accepting the assignment, you agree to the AMC's stipulations (which include being able to request a "draft" report. You perform the inspection, the analysis, and write your report. You submit your report to the AMC. The AMC doesn't like the value, or they just want to pay you a lot less, and then they say sorry, according to USPAP, the assignment is not over, your report is a draft report, and we cancel the order. Here is your $25 dollars for the work you've done and thank you. Or they could just keep pestering you to reconsider more and more comps until you give in and hit their value. Either way, they have your report, written by a certified appraiser, and you get screwed. Now also imagine that a ticked off home buyer or home owner has been turned down for a loan. They request a copy of all of the info that the lender has regarding their loan, which includes your "draft" appraisal. Your liability is still the same, as you can be sued or have a complaint filed, but you got paid next to nothing for your work.
Residential appraisers really need to look at this section of the proposed changes and to comment on them before they are accepted. We are very lucky that in NC our Appraisal Board has clearly defined when an assignment ends (upon transmission of the report). If this draft report rule is passed, residential appraisers will once again be subject to the never ending assignment by AMCs, or worse, they could be forced to work for next to nothing.
North Carolina appraisers really need to read the proposed USPAP rule changes regarding "Draft" reports. Most residential appraisers have never been asked to do a draft report and don't really know what one is. From my experience, attorneys will ask for them during the preparation of a legal case to evade disclosing certain information during the discovery process. There are also other reasons why draft reports are requested, but they are not allowed in North Carolina (for good reason in my opinion). These proposed changes to USPAP would now allow for draft reports. This could potentially be devastating for residential appraisers. The banks are pushing this one through in order to hamstring residential appraisers even more.
Imagine a scenario like this. You get a residential order. By accepting the assignment, you agree to the AMC's stipulations (which include being able to request a "draft" report. You perform the inspection, the analysis, and write your report. You submit your report to the AMC. The AMC doesn't like the value, or they just want to pay you a lot less, and then they say sorry, according to USPAP, the assignment is not over, your report is a draft report, and we cancel the order. Here is your $25 dollars for the work you've done and thank you. Or they could just keep pestering you to reconsider more and more comps until you give in and hit their value. Either way, they have your report, written by a certified appraiser, and you get screwed. Now also imagine that a ticked off home buyer or home owner has been turned down for a loan. They request a copy of all of the info that the lender has regarding their loan, which includes your "draft" appraisal. Your liability is still the same, as you can be sued or have a complaint filed, but you got paid next to nothing for your work.
Residential appraisers really need to look at this section of the proposed changes and to comment on them before they are accepted. We are very lucky that in NC our Appraisal Board has clearly defined when an assignment ends (upon transmission of the report). If this draft report rule is passed, residential appraisers will once again be subject to the never ending assignment by AMCs, or worse, they could be forced to work for next to nothing.
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