Restricted Reports and Estate Planning

[RCA]

Appraisers NEVER call a broker or investor or any market participant, even in their own firm! It's comical.

Well up until this past year, I would agree with you.

But, have you noticed that people get stressed out so easily nowadays? That includes sales agents who in turn have to interact with the stressed out populace. So, IMHO, "interview" real estate agents isn't what used to be. Nowadays they are pretty snappy and you are lucky to get a few words out of them. Add to that everybody is worried about being sued for looking at the wrong person cross-eyed or ****, for no reason at all.

Maybe it's the pandemic, or the after effects of being infected with COVID. Hard to say.

 

[BRCJR]

EDIT: WTF? Section 60.11 https://mf.freddiemac.com/docs/chapters/mf_guide_ch_60.pdf

Is that not sufficient for you?

You don't seem to get it - there hasn't been a "report format" for 15 years. The level of reporting detail is a function of the scope of work you are supposed to agree as part of your engagement. No matter what the level of reporting detail, your work file must contain all relevant support and methodologies used in developing your opinion of value. You can give a verbal opinion of value, but if done in the capacity of a licensed appraiser, that verbal opinion has to have a complete work file behind it.

The only difference between a restricted appraisal report and an appraisal report is the former must specify the intended users specifically while the latter can include broad intended users like "and/or assigns". For both report types, you must specify what you report and the level of detail (in accordance with USPAP).

How do you pass your USPAP update class without understanding this?

What if the estate in question has, say, 10 Class A apartment buildings in Manhattan and 5 Class A office buildings in the Financial District? In the case of the former, you don't have a 25% vacancy rate (arguably higher) and have no need to perform a fundamental market analysis. In the case of the latter, you would have a hard time claiming your report is credible without performing at least a Level C market analysis. The apartments are rather simple to appraise without extensive reporting necessary as the market is stable and demand remains high. In the case of the office buildings, a credible report that is USPAP compliant is much more complex.

That said, the number of times I've seen even a basic attempt at forecasting demand and capture rates is rare. Most MAI designated appraisers probably have never performed a Level C market analysis except for their demonstration report. In general, I would say appraisers have little to no understanding of supply and demand dynamics.

For most assets, those dynamics drive the extent of research analysis you must perform.

But for the last time, no matter how you convey your opinion of value, your work file must have everything necessary to support that opinion. There are no shortcuts in appraisal methodology, only the extent you report your research, analyses, and conclusions.

The commentary above is not relevant to my question you seem to avoid or cannot answer.

Where does is say 50 page limit?

No need to become insulting in an effort to distract from the fact you cannot and have not backed up your assertion a 50 page limit exists related to Freddie Mac.

 

[PL1957]

The commentary above is not relevant to my question you seem to avoid or cannot answer.

Where does is say 50 page limit?

No need to become insulting in an effort to distract from the fact you cannot and have not backed up your assertion a 50 page limit exists related to Freddie Mac.

Whether it’s formally in the guidelines or not, I’ve heard it stated several times by Marty Skolnik, the chief appraiser for Freddie. I’ve also seen severe pushback from his reviewers when the 50 page limit is exceeded. It may be a de facto requirement as opposed to being de jure.

 

[BRCJR]

Whether it’s formally in the guidelines or not, I’ve heard it stated several times by Marty Skolnik, the chief appraiser for Freddie. I’ve also seen severe pushback from his reviewers when the 50 page limit is exceeded. It may be a de facto requirement as opposed to being de jure.

I have no issue with your comments as you are not saying they ARE in the guidelines. My issue is when someone such as NewHaven says they are and cannot back it up with proof and then wants to start insults as part of their defense.

 

[PL1957]

I have no issue with your comments as you are not saying they ARE in the guidelines. My issue is when someone such as NewHaven says they are and cannot back it up with proof and then wants to start insults as part of their defense.

You have to consider the source

 

[BRCJR]

https://mf.freddiemac.com/docs/forms/f6011.pdf

Actually, this shows they do accept more than 50 pages.
It is called a waiver and is only related to certain loan products.

 

[RCA]

The commentary above is not relevant to my question you seem to avoid or cannot answer.

Where does is say 50 page limit?

No need to become insulting in an effort to distract from the fact you cannot and have not backed up your assertion a 50 page limit exists related to Freddie Mac.

I appreciate factual and logical posts.

The 50 page limit for SBL and 75 page limit for TAHX is in 60.11. Of course a waiver is allowed for good reasons. Would you create a waiver for some dumb or invalid reason? Not likely. So, they are saying "Try to keep from making the report too long, unless there is good reason." 50 pages without addenda is I am sure adequate for most purposes. What the addenda can contain and the allowed exceptions are also discussed in 60.11.

 

[RCA]

I am amazed at the number of Appraisers that think a Restricted Appraisal can have only one Intended User. Get out your USPAP and see for yourself that is a myth.

Why? It is a very recent change.

 

[RCA]

Interesting, I don't see where a Restricted Appraisal is disallowed.

From the IRS :

• 4.1 Reporting Guidelines
  4.1 Reporting Guidelines Overview
• The primary objective of the report is to provide the ultimate decision maker with convincing and compelling support for the conclusions reached.
• Valuation reports should contain all the information necessary to ensure a clear understanding of the valuation analyses and demonstrate how conclusions were reached.
• Reporting Guidelines
• Report Contents
• The type of report depends on the needs of each case. No particular format applies to all cases. The (format) will vary depending on whether the case is agreed or unagreed and whether the report is being relied upon by the decision maker (e.g., taxpayer, team manager, appeals officer, attorney, court, etc.).
• Reports “should be well written, communicate the results and identify the information relied upon in the valuation process. The report should effectively communicate important thoughts, methods and reasoning, as well as identify the supporting documentation in a simple and concise manner, so that the user of the report can replicate the process followed by the Valuator.”
• Subject to the type of report being written, valuation reports should generally contain sufficient information relating to the items contained in Sections 2.2 (identifying), 2.3 (Documenting) and 2.4 (Analyzing), to insure consistency and quality of valuation reports issued by IRS Valuators.
• Reports written with respect to Section 2.6 2.8 (Review with recommended changes), should contain, at a minimum, those items in Sections 2.2 ( Identifying), 2.3 (Documenting) and 2.4 (Analyzing) necessary to support the revised assumptions, analyses, and/or conclusions of the Valuator.

You need to give everyone time to catch up with USPAP 2020-2021 changes. Now that you can have more than one intended user on a Restricted Report, then there should of course be no reason it couldn't be used for the IRS.

 

[BRCJR]

Why? It is a very recent change.

Only about 3 years now. Current USPAP addresses this.