Recertification

[Farm Gal]

OK so as I understand it I CAN in fact do a Recert of Value...
under the circumstances described... orig value date no change, no change in anything... other than a fresh picture See Fannie Mae 02-02 guidelines page 5 for Update definition

For those to lazy to pull their USPAP books lines 3481-3483read:

The term "Recertification of Value" has been mistakenly used in leiu of the term "Update of an Appriasal" by some clients. A Recertification of Value is performed to confirm whether or not the conditions of an appraisal have been met. A Recertification of Value does not change the effective date of the value opinion.

I really appreciate it Jo-Anne...

Now All I gotta do is insure the client really understands what they want.... :roll:

 

[Stephen J. Vertin MAI]

Group:

Several people have asked what is a recertification?. I would also like to know. However, no one has answered the question. Furthermore, what is involved? Do you reinspect the property, etc.. Additionally, what do you charge? Yesterday, I recieved a faxed request to recertify an appraisal I did 6 months ago. However, it was not a construction loan. The improvement was complete. Why would someone order a recertification within 6 months? As a commercial appraiser this recertification stuff is new to me. Those of you who know give those of us who do not a break. Tell us what recertification is.

Steve Vertin

 

[Ross (CO)]

Steve, .....While I might do windows, I do NOT do Recertifications (of Value). The form by that name still exists in most software suites along with numerous other ancient, extinct and useless forms-of-choice for an appraiser to use. The R.O.V. is defunct and inappropriate and yet the client pool has not been given enough information from their "management" to stop asking us to do them. I think the R.O.V. is the perfect product for an in-house group at our clients' office to do. Let them crunch their database numbers, get a computer print-out AVM, and sit back in their chair and make that bold decision about whether the subject and it's market have "declined, remained stable, or increased" in value(s). Short of that, the R.O.V. has been an arm-twisting device to extend the appraiser's opinion of value and his/her potential liabilities and to sweep the magic wand through the air as to grant the a-o.k. that everything reported and concluded in the original report still holds today and one says that on a 1-page form. An ROV stating "decline" was the kiss of death....the one stating "stable" was frowned upon....and the one stating "increase" was EXPECTED ! In the current situation of our national economy and all the "bubbles" one sees from coast to coast, the "purpose" of the ROV may be defeated already upon the moment of requesting it. Of course, it is also expected that the R.O.V. is done for a very, very cheap price. The one way by which we appraisers can possibly halt the request for them is to charge an paid-up-front fee of, say, $350.....and see what response we get. Another easy way out is to say....." I don't do ROV's". Come Jan. 1st the ROV and the Update will be notched further back into non-existance......but it may still require another 10 years before everyone catches that wave. It is becoming easier and easier to state what I can and can not do, will and will not do, and when common sense dictates what I need and need not do. Clients do not own us, nor our allegiance to off-the-wall requests because they do not know better. Remember, it's our signature, electronic or hand-written.

 

[Blue1]

Sounds to me like a "Recert" is just looking at an appraisal and saying: "O.K. it's an appraisal." I can think of nothing more useless to a lender. In fact, I hazard to guess, that if most lenders actually had a real understanding of what a "recert" is, that term would become extinct!

Let's face it, they don't want a "Recert" they want your name on the "dotted" line "blessing" the original value. If the appraisal was done by someone else not affilliated with you, neither an "update" nor a "recert" is appropriate IMHO.

 

[Tim Hicks (Texas)]

I really believe that 50% of the appraisers in this business do not know the difference between a "recertification of value" and an "appraisal update". Of the 50 % who do know the difference, I bet 90% of them don't care and just give the lenders what they want. I get that response 9 times out of ten when I discuss with other appraisers. "Who cares, just give them what they want and move on the next assignment." There lies the problem with our profession on just about every issue.

 

[Jo Ann Meyer Stratton]

When a lender calls to order a "recert", about 99.999999999% of the time they really want an update to an appraisal because they are concerned about current market conditions, not the market conditions at the time of the original effective date. They might be requesting this service for several reasons. New construction, appraisal done over six months ago, took more than six months to build is one example. Property is unusual, took a broker months and months to find a lender that is willing to lend on that type of property, another example. Problems with the borrower in their application--went on vacation for 3 months wasn't around to sign, in process of divorce, took months to figure out who was going to be responsible for the loan, lender took too long to verify employment and residence history, etc for other examples--all could be situations whether it is a new or older, existing home. Now Fannie Mae and other lenders do not like to see ALL sales that were used to come to an opinion of value more than six months ago--so call for a "recert" to get information on current market data. So then the appraiser can decide how to handle this request. My personal policy has been that is if there has not been any changes to the subject and the market, then I can prepare my Update to an Appraisal letter with a new grid with new comparables to reflect current market data, add photos of the front, rear, street and anything else of interest of the subject, research and analysis the current market, take photos of the ones I decide to grid, prepare a map that shows the location of those comparables, make out my invoice and ship off to the client. If after investigating I determine the market has changed or the subject has changed, then I will decide to use a 2055 or 1004 to report those changes as well as any change in my opinion of value. If nothing has changed, my letter is an extension of the original report, all the information in the original report remains as true as of today's date as the original effective date of opinion, only new comparables are being added.

Oh by the way, new comparables or lack of new comparables have no effect on a Recertification of Value because nothing since the original effective date is considered.

Regardless of which procedure you follow, it is a new assignment and all applicable USPAP requirements need to be followed. The main change after 01/01/2003 the expression Updated Appraisal will no longer be used but I am sure a similar letter to my current Update to an Appraisal letter will still be feasible in certain situations. In fact everyone that has received my Update template, I really would like to have some ideas on how to reword that "Reference to a Previous Assignment" letter (and not using the word update)!

By the way, software packages that have a similar Update to an Appraisal one page form have a bug that I have seen. An Update to an Appraisal is NOT a stand alone limited appraisal assignment. A letter or one page form is an extension of the original report or just an additional addendum to the original report. Still part of the total package, just writtern several months apart.

 

[Mike Garrett RAA]

I will not do a "recertification of value". As far as I am concerned ...it no longer exists. I will do an "update" if it applies or will do a new appraisal.