Reconsideration of Value

[Jon Liberatore]

I just completed yesterday an appraisal for an FHA purchase. The purchase price was $350,000 and I came in at $341,000. The appraisal was just submitted from the AMC to the LEnder & FHA today. After the fact I just received new information that could ultimately increase my estimated value possibly to atleast the purchase price of $350,000.

I called and notified the AMC of this new info and they sent me a Document to fill out for a REconsideration of value.

What should I do and what is the legal way to be in compliance with Dodd Frank to revise the report and resubmit with a higher value?

Any advise or direction would be great

 

[Michigan CG]

.......The purchase price was $350,000 and I came in at $341,000...............

How did you explain your rationale for coming in at $341,000 (a pretty precise point considering the overall value) in your reconciliation of value? I am guessing the AMC wants an explanation of your rationale for the number which is 2.5% below contract.

 

[J Grant]

I presume you would add the new information to the report, such as an additional comp and do a new reconciliation. Then explain...though I am a bit unclear....did the client ask for an ROV, or did you find this information after you submitted the report, then you contacted the client to add it and change the value?

What is the new information that indicates a higher value?

 

[Mike Kennedy]

"After the fact I just received new information that could ultimately increase my estimated value possibly to at least the purchase price of $350,000."

What information from what Source?

 

[Terrel L. Shields]

Was that new information something you should have found in the first place? Not criticizing, just asking. I would not change a report unless it was clear I screwed up.

 

[glenn walker]

There is nothing wrong with doing a reconsideration of value especially if there was data you missed or a math error or a comparable you missed which was a good comparable. I would Revise the report and be done. Of course your signature date will be changed. I will never forget the day I appraised a property for $250,000 and received a review two weeks later asking how I came up with $350,000. Of course it was a type-o but errors or missed data happen so suck it up and explain the reason for the revision and sign the report with a new signature date and be done.

 

[hastalavista]

There is nothing wrong with doing a reconsideration of value especially if there was data you missed or a math error or a comparable you missed which was a good comparable. I would Revise the report and be done. Of course your signature date will be changed. I will never forget the day I appraised a property for $250,000 and received a review two weeks later asking how I came up with $350,000. Of course it was a type-o but errors or missed data happen so suck it up and explain the reason for the revision and sign the report with a new signature date and be done.

+1.

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[Terrel L. Shields]

Such a $100,000 typo, however, is a violation of USPAP since it led to a misleading conclusion of value. Welcome to USPAP which likes to say perfection is not required.

No matter how obvious such a mistake is, the state now has you on record with a "bad" report and you could be sanctioned...though we'd all hope common sense prevails. USPAP has no provisions for common sense however. And the new proposal concerning "draft" reports should be canned....

What is needed is to say an assignment is not finished until reviewed by the client OR X days. And the only report coming from that period is the last one. All others are considered incomplete and are not subject to review or sanction by the regulators.

 

[J Grant]

I just completed yesterday an appraisal for an FHA purchase. The purchase price was $350,000 and I came in at $341,000. The appraisal was just submitted from the AMC to the LEnder & FHA today. After the fact I just received new information that could ultimately increase my estimated value possibly to atleast the purchase price of $350,000.

I called and notified the AMC of this new info and they sent me a Document to fill out for a REconsideration of value.

What should I do and what is the legal way to be in compliance with Dodd Frank to revise the report and resubmit with a higher value?

Any advise or direction would be great

You never returned to say what additional information was received and where it came from and why you think it is sufficient to increase your opinion of value. It was a passive statement...you received information...from who m...a RE agent? What is better about this information to warrant a change of value....since the lender did not ask for an ROV, and may never have asked for one. You requested this back for change.

FHA received the report and has your first value on record. So if you change your value based on new information, write good narrative on why this new information led you to conclude that a OMV of X$ is more credibly supported than the prior OMV of Y$.

Regarding subject SC price, are there seller paid closing costs? Look everything over carefully and spend the time needed on your new OMV development.

 

[residentialguy]

It doesn't matter where OP got the information from, as long as OP verified the information as being correct. Mistakes happen...explain it and make the change. Revise the report and make sure you use a new sign date and new file #.

Jon, in the future, next time you're opinion is that close to contract, make sure..triple check everything. $341,000 really suggests a precision that no appraiser can possibly have. And to be 2.5% off of contract in a market that probably has a 5% natural variance in a range of price that is equally as probably???....that contract better be out of that probable range. Remember, the subject contract is market data that you must consider; and if the sale is one of typical motivations of a knowledgeable buyer/seller and nothing else (such as concessions, financing, distress etc is affecting the price), then the subject contract is probably a good indicator of market value. Please notice that I did NOT say to target the sale price. That we must take great care in NOT doing. You need to analyse the subject sale and verify with the buyer/seller and/or agents to see what conditions are driving that sale. Same is true with the comps you use. Analyse, contact the agents to verify the conditions that drove that price, and report.

It is refreshing to see an appraiser that admits he did something wrong. Problems befall the appraiser that does things wrong and won't correct it.

Good luck