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New Buyer, Same Lender

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DeeDee Armstrong

Sophomore Member
Joined
Jun 24, 2002
Professional Status
General Public
State
Minnesota
Hi.
We did an appraisal for Bob and Julie (not their real names) a month or so ago. Now, they are selling their home, and the lender wants to know if they can use that appraisal... do an update with a new borrower's name. The lender is the same lender as the original....

What's the rule on that?
Thanks.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
I don't think that there is a rule but I wonder if the mortgage lender will accept an appraisal done before the date of the agreement of sale. Another question that occurs to me is what was the purpose of the appraisal" If the purpose was to set an asking price, I don't see a problem.
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
There seem to be separate questions. The lender can use “that appraisal” a second time. That is up to them, their house rules, legal banking rules, etc. What they seem to be asking for is a second estimate of value as of another date (aka, "update'). And there is no rule against you giving them one.
 

Larboard

Member
Joined
Jun 25, 2003
Professional Status
Certified Residential Appraiser
State
Michigan
USPAP Advisory Opinion-3 at line 36 says:

"A New Assignment

Regardless of the nomenclature used, when a client seeks a more current value or analysis of a property that was the subject of a prior assignment, this is not an extension of that prior assignment that was already completed -- it is simply a new assignment."

That was an excerpt. You can see the entire opinion by selecting it from the USPAP Table of Contants.

This is an Advisory Opinion, so it is not binding. But you may want to review it for ideas.

Bruce
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Like Bruce noted, I'd quote a fee to re-inspect and do a whole new file. What you charge is your bizniz.

Besides, it's my experience that 9 times out of 10, the UW will call back wanting the date changed. :rolleyes:
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Just make it easy on yourself. Do a new appraisal. Charge what you want to, but go walk through it again, look for any new info, and deliver that new report.
 

Phil Rice

Member
Joined
Apr 22, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Another flavor of a common question.

The rules are all about changing client, not borrower. As long as the client remains the same, you have little to worry about as far as USPAP is concerned. IMHO, you do not need a written release from the client.

If you keep the same effective date (up to the borrower if this is acceptable), you do not need to reinspect. If client wants more current effective date, you need to reinspect.

If you decide to keep the same effective date, you can change the borrower name, intended purpose, and anything else that is appropriate. Take another look at market data, and use the best available as of the signature date. Change the opinion of value and comps if the market data indicates.

Go to a tire shop, and ask for a quote to balance your tires - they say all 4 for $25. Ask for quote to rotate tires, they say $25. Tell them to do both. In order to balance the tires, it is necessary to romove each tire. To rotate, they simply put each tire on a different wheel, there is no extra work involved. Do they pass the savings on to you, or do they charge $50?

Same principal applies to appraisal.
 

Larboard

Member
Joined
Jun 25, 2003
Professional Status
Certified Residential Appraiser
State
Michigan
Actually AO-3 is about a new value opinion being requested for a prior assignment.

AO-10 addresses changing clients.

I reread the original post. My mistake, I thought a new value was being sought.

But now I am not sure who the original client was. The post says you did an appraisal for Bob and Julie. Were Bob and Julie the client(s)?

Is the same lender the client in both cases?

Is this changing from a re-fi to a purchase so that there is now a purchase agreement to be considered?

If it is a change from a re-fi to a purchase doesn't the scope of work and intended use change, requiring a new appraisal assignment?

It still seems to me that it would be easiest to just get a new appraisal assignment. Then it is clear that the appraisal was done in regards to the purchase financing transaction. Leaving no doubt down the road.

By the way, do you know if the lender is charging the new borrower for an appraisal in either case?

Bruce
 

bradellis

Member
Joined
Jan 16, 2002
Dee Dee,

Do a new appraisal.

For mortgage lending, the appraisal must be ordered by the lender- looks like you having done it for Bob and Julie (assuming they were the clients) will not fly.

Banking regs...

Brad Ellis, IFA, RAA
 

Phil Rice

Member
Joined
Apr 22, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
The original post says:

The lender is the same lender as the original....

It is a new assignment no matter who the client is or who the borrower is. Yes, the intended use will be different, and therefore, the scope of work could change.

The effective date of the appraisal does not need to change. You can if you want to, but you do not have to.
 
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