Purchase Appraisal

[Brandi Bollack]

First time posting..

I've have run into the situation of not receiving the sale contract before and was actually told by the realtor after checking with his broker that I was not suppose to receive a copy of the sale contract.

After checking with USPAP and my local state no one could confirm that it was indeed required to get it. I have since taken Real Estate Principal courses and it does state that everyone in connection to the transaction should receive a copy of the contract but does not specifically include the appraiser. Typically the lender will release it quickly, so as suggested before just ask the lender they should comply.

In the above situation, I turn down the assignment, stating they were un-cooperative. Turned out it was a bad deal FHA, wouldn't fly FHA, foundation problems, and the broker was purchasing the home.

One thing I have learned is "if it smells bad it probably is". If they fight and fuss about releasing the contract they definitely may be hiding something. But to put another spin on it some brokers just don't want to give us a pre-determined value. They did not want to steer us. Best way to handle it would be to disclose and state sales contract withheld


Hope I could be of some help.

Brandi

 

[Richard Carlsen]

Brandi

Welcome to the board!

As far as smelling bad and probably is, that doesn't always ring true. Consider liver and onions. I rest my case.

One good way to counter the broker argument that nobody is suppose to see the P.A. is to tell them that the appraisal report required by the lender requires you to review the sales agreement. It is not your requirement to do the appraisal but a requirement of the type of loan that the borrower chose. It is sort of passing the buck a little but it sometimes works.

I still have trouble understanding how not having the P.A. can interfere with forming an opinion of value. You do not consider any concessions made in this sale in the grid. The fact that you are doing an appraisal for lending consideration means that it is a cashout transaction and therefore cash equivalent.

Anyway, not a biggie as far as I am concerned. Just make the notation that you asked for it and was not provided with a copy.

Again, welcome. Have a great what is left of a fine July4th weekend.

 

[Serge Paquette]

Nice thread.

USPAP is good, sometimes.

If you ignore a recent sale of the subject, it may impact your estimate assuming you would've considered the subject sale a worthwhile indicator and would have given it weight in your valuation. Ignoring the subject sale would be equivalent to the client telling you not to use certain comps. We pick the value indicators, not the client.

 

[Mike Garrett RAA]

If the sales agent is uncooperative, ask the loan officer to fax you a copy of the contract. It is a requirement that you review the contract, if available. What if you appraised the property for say $200,000 and the contract was $201,000? Tell me you are good enough to get within $1,000 or 1/2 of 1%. In those cases, I always give consideration to the contract and not having it can really screw up the whole process.

 

[Patrick Egger]

USPAP doesn't require that you be given a copy of the contract, but it does require that you analyze any current listings, sales, etc of the subject property... additionally you must comment on any special financing, personal property, etc ... and then there are the supplemental standards from any Federally Regulated lender or FNMA, FHLMC, HUD, etc ...

Now, if you have knowledge of the intended use (scope of work requirement) "for mortgage loan purposes" ... wouldn't it generally fall under the lender's supplemental standards, which if they are any of the above, you are now subject to analyzing the agreement, listings, sales etc and the lender is required to provide you with any and all appropriate information.

As such, when the LO states its not a USPAP requirement to give you a copy of the contract, tell him/her that they are correct, fax them a copy of FNMA, HUD, FIRREA doc's (each has a section that specifically requires them to give you that information) and then request that they please review the contract and summarize the sales information from the contract (including all pertinent information, date, price, terms, financing, personal, etc. ... make a good long list) and send it to you since it is the client's (lenders in this case) obligation to provide such info to you.

In the case of USPAP ... you can (as stated in the post) say that the info wasn't available etc ... and cite your attempts to obtain it ... however, for most of the assignments we generally get, there are the supplement statndards of Fed Lenders, FNMA, HUD, etc ... that do not excuse you from analyzing the agreement and if a copy its not available (due to some juristictional logic, etc. ) they must make the operative and applicable information available to you.

One last point ... you can learn a great deal by attending a commission meeting and seeing what they expect in that report or better yet, reading trial transcripts regarding flips etc ... one of the reasons they (the feds) want you to read the sales agreement in the first place ... remember FIRREA and how we got to this point.

Even better, read all of the comments, intents, preambles to CEBA, FIRREA, etc ... these are the basis for USPAP and often spell out the intent of the regulations and the expectations (by the intended users) of the appraiser.

If you ever act as an expert in court ... a lot of this will come your way and its in a court, where a good lawyer will make a lot of appraisers look like they side-stepped their responsibilities with regards to issue such as this.

 

[Pamela Crowley (Florida)]

Thank you, Patrick!