Review Appraiser "Hides" behind client relationship

[Robert Dunkle]

A lot depends on the reviewer's SOW and whether this loan is likely to go to the secondary market (spelled FNMA) Fannie does not like large ratios of outbuildings to the house. Now, the poster doesn't say the value of the house...may be $10M for all we know and the $100K outbuildings would insignificant. However, if the house is in the $100-200K range. That is a pretty significant outbuilding. Besides, our experience around here is that a $100K horse barn, two years old, may or may not (probably not) contribute somewhere near the original cost.

To William,

As Barry Dayton said, I hope you, and the reviewer are Certified or the value is under $250K. I, also, hope that you had lock down comps that had sold WITH a similar horse barn to show the contributory value of the horse barn. Outbuildings like that, even here in horse country, cuts down the size of the market substantially, and rarely return even the depreciated cost.

Are "bad" reviews the only newsworthy item the last few days. It seems that most of the posts lately, involve a review.

 

[Fred]

she chose to hide behind the "client relationship". I think thats a cop-out.

The client gave you the results already. Nothing left to hide behind.

Maybe there are different principles and ethics that should apply to reviewing, since opions are not just about abstract "property," but about a person's work.

 

[Jim Onderisin]

If I had done the review and you called me, I would have politely listened to the purpose of your call and any opinion you might have about the review. But, I would not have discussed my review with you unless the client had given me permission in advance. My research, analysis and conclusions are confidential. That's not the answer you'd like to hear, I'm sure, but how else would a professional handle this?

 

[Brad Ellis]

I am left wondering why on Earth that client of yours submitted an appraisal on a commercial property (clearly is that from your description) to CW?

Brad

 

[Dan Blanchard]

I'm sure I have been reviewed at one time or another. It has never been brought to my attention. If or when does happen, I'm going to try to handle it just like this:

I never get upset when I find out a report has been reviewed, or when I find out a reviewer cut the value.

2 people can have different opinions. And yes, 1 person's opinion can be off the wall. But once the report leaves my hands, the lender can use it, cut the value, raise the value, ignore the value, etc, I really don't care.

If you performed a solid, quality appraisal, why do you care if the lender wants to use the reviewers value over yours? You did your job. Move on to the next one.

I would never waste my time and call up a reviewer. If the lender wants to argue, then they can call the reviewer. The lender has my report, that speaks for itself.

When it does happen, since it will be the first time, I'll probably fail with the first line.

 

[Michigander]

I am left wondering why on Earth that client of yours submitted an appraisal on a commercial property (clearly is that from your description) to CW?

Brad

Because they are trying to pass it off as a "gentleman's farm" or some such rot and force a square peg into a round hole (and call it a simple single family).

 

[Pamela Crowley (Florida)]

the subject was a small horse farm (5 acres) with a very very nice barn (100K cost) and a large riding/show arena, riding rings, 3000' feet of three rail fencing, etc.

5 acres isn't much for a commercial horse property.

BUT, a 100K barn, riding/show arena, riding rings..... THAT sure does sound commercial. Money pit commercial, but still commercial.

 

[Robert Dunkle]

5 acres isn't much for a commercial horse property.

BUT, a 100K barn, riding/show arena, riding rings..... THAT sure does sound commercial. Money pit commercial, but still commercial.

My bolding and underlining. Talk about a money pit! I have a 100' by 300' indoor arena on my ranch. When I was looking at the property I made the comment to a friend that the barn could become a money pit. Has it ever. Sheet metal comes off in 80 mph winds like we have had several times this year. Maintenance is a nightmare when the eaves are 20 feet up and the peak is about 30 feet in the air.

I'm not sure that it IS a commercial! For $100K you are not going to put up a real large, quality barn. To be commercial, someone would need to be able to produce horse shows, ropings, buckouts, or, at least substantial boarding income. It is, IMHO, a "gentleman's farm", but the original post implied it was "unique" in the area, so I would anticipate that he didn't have "true comparables" in his report. This would involve other "horse properties" with similar improvements. Also, it should not be completed by anyone less than CRA!

 

[hastalavista]

If you were the other (review) appraiser in this case, would you speak to me? Or would you hide behind that client relationship also. I dont care what the rules might be in regards to it, as a review appraiser if I tear somebody apart Im gonna do them the courtesy of explaining why if the ask me.

Just curious what my peers think...

todd

(my bold)

Although I'd probably love to, I wouldn't because I can't. Plain and simple. And please take my word for it , I am not the type to "hide".

I'm sure there are many people who get a copy of your appraisal and want to talk to you about it; do you engage in a discussion with them when they call up out of the blue? Probably not (I hope), and for the same reason. You have a duty to maintain assignment confidentiality, and unless your client tells you its "OK", you cannot disregard that duty.

I think you let the frustration of getting a review (which you conclude is poorly done and may indeed be so) that questions your work cloud your judgment.

You can't go wrong by taking Pam up on her generous offer- you'll get an independent and extremely qualified consultation at a price you cannot beat!

 

[William Rightsell]

To clarify a few things....

First off....NO...I dont talk to just anybody about my assignments. Since some of my info is not posted I will give you some info on me. I have been appraising for 15 years, and am Certified in North Carolina. I am well within my license level on this one, and grew up in the county in which I work. I have lived here all my life.

Secondly, the property is NOT commercial by any stretch. Its a horse farm which apeals to a particular buyer set. The buyer pool is somewhat limited because of the added amenities, but if ya got horses ya gotta have somewhere to put them and exercise them, etc. Horse folks are willing to pay for that (in my market) and they do. The cost of the barn (1700sf) is close to 100K alone, not to mention 3000 feet of fencing (20K +/-) and a few other goodies. Through research and experience, I felt like the contributory value of the barn was approximately 35K - and thats probably a bit conservative. Reviewer put 10K value on it without ever having gone into the thing.

Thirdly - the barn was well described - a full paragraph and the statement that the barn was the best example of a barn the appraiser has seen. This thing was airconditioned, plumbing, 220 electrical, video surveillance hookup so the owner can see the horses foaling from the master bedroom!!! All in the report. Even the reviewer said I described the property accurately - so thats a non issue.

Fourthly - I used 3 comps with barns of various quality - one which was about as nice as the subjects'. The other two lesser quality. All on 5-10 acres with fencing and set up for horses. Comps were 5-13 miles away, but in the same general area of the county.

Because I was looking for horse properties, I went further away than the lender would have liked. Explained why - due to the setup, etc. Comps were reasonable substitutes.

Reviewer uses one of my comps. Misses land adjustment by 50K. Misses barn by at LEAST 25K. Other two comps she chooses have no barn at all or fencing, no possibility of accomodating horses. Those arent even viable substitutes for somebody with horses!!!

The problem is - as stated in an earlier post - the lender didnt like the property. And it was 100% LTV.

My value was 390K...reviewers at 315K. So yes, the outbuildings/amenities involved account for a fairly significant percentage of the value. And I am concerned about it because now its costing me money because the lender wants all kinda stuff more from me to save his deal which should have never been held up to start with. This also had the effect - because it was a purchase - of holding up 3 other real estate transactions because one couldnt close.

Did some poking around, and it turns out that this same woman has been blackballed by two of Countrywide/Landsafes clients due to shoddy work. Shes not allowed to do work for those clients!!! She's also appraising in two other cities - one 100 miles East of here and the other 100 miles Southwest of here. Im not saying she can't appraise in other areas and be competent doing it or thats its wrong/not allowed - I'm just saying she covers half the friggin state with a one person shop.

Enuf of a rant now. For those that are "tired" of these types of posts - go to the next thread - you dont have to read them!

Pam....appreciate the offer for a review. I dont think its all that necessary tho, because all the parties involved have admitted thats its a terrible review. Even the lender. The head appraiser for Countrywide in this area im told looked at it today and couldnt believe it.

And back to original point - If I slay somebodys work, Im gonna talk to them if they have a copy in hand and have obviously seen it and want an explanation as to why. Unless they are irrational and cussing at me - which I wasnt. I think thats professional courtesy. To deny one an explanation at that point is chickens**t. But then again, if I didnt have any answers, I might "hide" too. I just think thats plain wrong tho. If I'm gonna punch somebody - I don't suckerpunch 'em and run hide. But thats just me.



todd rightsell