This forum is fast becoming a compendium on why real estate appraisers cannot be relied on for much of anything. Drama queens on another thread are claiming that most appraisers don't have the mental capacity to fill out a form while some in this thread are promoting the use of language and statements in reports under the "assumption" that it will limit their liability, without having much of an apparent clue regarding the effectiveness of that approach.
Q: “For purposes of liability reduction, is it critical for the appraiser to use an Extraordinary Assumption – such as, for example, that the appraiser has made an extraordinary assumption that the interior of the home is as depicted in the borrower’s photos? (Note: The instructions from the GSEs state that extraordinary assumptions should not be used for their alternative flexible appraisal approaches.”
Per Peter, “Based on extensive claims experience (over 8,000 claims by LIA), the reality is that this distinction in USPAP makes no discernable difference in real-world lawsuit claims.”
“The far more valuable protection is for the appraiser to explain in plain English what information from third parties they are relying on – whether an “extraordinary” assumption is stated has not shown to be relevant in liability claims.”
“Describing what you’re relying on and the source of the information in plain English works is the best “disclaimer”
In one negligence case against a commercial appraiser, the trial judge said from the bench, “I’m going to give as much attention to that fine print as the appraiser did copying and pasting it.”
www.liability.com
"While most appraisals involve some assumptions, extraordinary assumptions should only be made when necessary and should not be used excessively to limit liability. They are meant to address specific assignment-related uncertainties that could materially impact the appraisal’s conclusions, such as assumptions related to zoning compliance or environmental conditions. Proper documentation and disclosure of these assumptions are essential for clarity and transparency in the appraisal process."
And how many follow standards and address for every stupid little improvisation:
"the appraiser must
clearly and conspicuously state the extraordinary assumption and
state that its use might have affected the assignment results."
Some need to focus more on:
"For starters — and this is pretty fundamental — appraisers need to develop a credible valuation analysis and report it correctly."
www.liability.com
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