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Reconciling a higher value indication by the market approach with a lower value indication by the cost approach.

George Hatch

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There is no "all" or "sole" in that sentence. Regardless of how much you disagree with the application of a CA in ANY URAR assignment.

In general, that which is not prohibited is generally assumed to be permissible.
 

alebrewer

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There is no "all" or "sole" in that sentence. Regardless of how much you disagree with the application of a CA in ANY URAR assignment.

In general, that which is not prohibited is generally assumed to be permissible.
Neither is there an avenue for putting weight on either of the other two approaches. Again - please read the cert. Period means period - at least that's what I was taught in grammar school... an analogy might be helpful here. Take the following statement: "I spent two hours playing baseball." As there is a period at the end of the sentence, one can rightfully glean that I did not spend part of the time playing football or soccer, but rather, I did exactly what I said I did. One can infer that I may have spent some of the time playing basketball, but that would be an incorrect inference, as I stated I played football during that time - wait for it.... - period.
 

CANative

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EI, EI. Oh. Make sure you're paid up on the E&O.

Market conditions probably didn't support your estimate of depreciation (understated) and lack of including a component for Ent. Incentive.
 

andrew81

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Talk about a user telling an appraiser what to think, this would be an example of that.
I don't think I'm capable of making anyone think what I want them to.
i dont believe he meant an appraisers forum member (user).

he meant, fannie mae (intended user) telling the appraiser what to think.
 

andrew81

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Fannie Mae Selling Guide
B4-1.3-10, Cost and Income Approach to Value (04/15/2014)

Fannie Mae requires the cost approach for manufactured homes and recognizes that for all assignments the cost approach may be required if it is necessary to develop a credible report.

However, they also go on to state, appraisals that rely solely on the cost approach as an indicator of market value are not acceptable.

Remember, this is a guide for lenders selling loans to fannie mae. It is not an appraisal standard.

Cost Approach to Value
Fannie Mae does not require the cost approach to value except for the valuation of manufactured homes. However, USPAP requires the appraiser to develop and report the result of any approach to value that is necessary for credible assignment results. For example, when appraising proposed or newly constructed properties, if the appraiser believes the cost approach is necessary for credible assignment results, then the cost approach must be provided. Appraisals that rely solely on the cost approach as an indicator of market value are not acceptable.
 
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Michigan CG

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I had a personal discussion with a former ASB member who also has had some pretty big chief appraiser positions and he stated that a client can not tell an appraiser that they cannot rely on the CA for a lending assignment as it would be a violation of appraiser independence.
 

alebrewer

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i dont believe he meant an appraisers forum member (user).

he meant, fannie mae (intended user) telling the appraiser what to think.
I kind of think not - else he'd have said, "talk about an intended user telling an appraiser what to do." Regardless, GH and I both have pretty thick skin.
 

alebrewer

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I had a personal discussion with a former ASB member who also has had some pretty big chief appraiser positions and he stated that a client can not tell an appraiser that they cannot rely on the CA for a lending assignment as it would be a violation of appraiser independence.
That's correct. If an appraiser believes the SOW to be too constrictive, the appraiser would have to recuse himself/herself from the assignment...
 

andrew81

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I had a personal discussion with a former ASB member who also has had some pretty big chief appraiser positions and he stated that a client can not tell an appraiser that they cannot rely on the CA for a lending assignment as it would be a violation of appraiser independence.

exactly, neither the client or intended users can force the appraiser to limit the scope of work to such a degree it is not credible.

however, if it does not meet the client or intended user guidelines, they do not have to accept the appraisal either.
 
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alebrewer

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Joined
Mar 11, 2008
Professional Status
Certified Residential Appraiser
State
Texas
Fannie Mae Selling Guide
B4-1.3-10, Cost and Income Approach to Value (04/15/2014)

Fannie Mae requires the cost approach for manufactured homes and recognizes that the cost approach may be required if it is necessary to develop a credible report.

However, they also go on to state, appraisals that rely solely on the cost approach as an indicator of market value are not acceptable.

Remember, this is a guide for lenders selling loans to fannie mae. It is not an appraisal standard.
That's true. That is why Cert #4 is different on the 1004C (and the 1025 for that matter) than it is for the 1004. Here's the cert for the 1004C:

". I developed my opinion of the market value of the real property that is the subject of this report based on the sales comparison approach to value. I also developed the cost approach to value as support for the sales comparison approach. I have adequate comparable market and cost data to develop reliable sales comparison and cost approaches for this appraisal assignment. I further certify that I considered the income approach to value but did not develop it, unless otherwise indicated in this report." Bold and italics added by me.
 
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