Webbed Feet
Elite Member
- Joined
- Feb 11, 2005
- Professional Status
- Certified Residential Appraiser
- State
- Canada
to make the 1004D usable
Mr. Asher,
Here is my opinion. To make the 1004D usable remember some basics... First, incorporation by reference MUST require the original client be ordering the update (new appraisal)... Otherwise you have to incorporate by attachment.. and there may be a question as to if you can even do that for a second client without the first (original) client's knowledge and ok.
Once you are past these things.. next is the matter of the certifications on the 1004D are not in compliance with Standard 2-3... compare and add the missing stuff... Then, if you are doing the minimum "Exterior Only" inspection when the original was an interior an EA is needed that nothing on the interior has changed significantly since the original appraisal.
Now we are to the requirement to analyize the market as of the new effective date. The assignment is to see if the market is "not less than" the benchmark opinion of value in the prior appraisal. The form requires a "Summary" report of this. It is a new assignment.. what would Standards One and Two require to determine that? Development is required, reporting is required just like in any appraisal. A SOW of only new sales comparable may be satisfactory for this purpose. Redoing a Cost Approach could be not required. However, be careful if the Income Approach was applicable prior it probably should be done again. Unless you feel a "not less than" conclusion can be properly defended using only the Sales Approach. If approaches used in the original appraisal are not repeated in the new assignment, any astute appraiser had sure better be explaining why they are not repeated and not needed for the new SOW.
You need to analyze any approaches used and "Summarize" this in a report as the 1004D is indicated to be a "Summary Appraisal." With respect to my colleagues, I believe some examples here are stopping short and not doing enough to reach the requirement to "Summarize" and are only providing examples of "State" for a reporting requirement.
In my book, as this is a "New Assignment" being done perhaps many months later after a prior appraisal (I was recently asked for one ten months later.) many other things that were in the original appraisal have to be restated. Not just taken for granted that they are the same as in the prior appraisal without making any comments to that effect. The highest and best use for example. The 1004D should really require a "Statement" that you concur with the prior appraisal and a "Summary" of what form of inspection was done. These things should not be left to the imagination and everyone wondering if the minimum has been met or not, or if something beyond the minimum was done. A "Statement" regarding if the new comparable were curb inspected or not. Was this turned into basically a desktop appraisal with only a driveby of the subject?
To me a LOT of serious questions are left unanswered by this form. As a client, or underwriter, I'd want the damn answers... as a review appraiser asked to review this turkey (this is what started this thread) I would demand the damn answers! Personally, I believe many appraisal boards are going to demand answers when the time comes after they get a complaint regarding one of these. My board put it well a long time ago. "Say what you do, and do what you say."
Mr. Asher,
Here is my opinion. To make the 1004D usable remember some basics... First, incorporation by reference MUST require the original client be ordering the update (new appraisal)... Otherwise you have to incorporate by attachment.. and there may be a question as to if you can even do that for a second client without the first (original) client's knowledge and ok.
Once you are past these things.. next is the matter of the certifications on the 1004D are not in compliance with Standard 2-3... compare and add the missing stuff... Then, if you are doing the minimum "Exterior Only" inspection when the original was an interior an EA is needed that nothing on the interior has changed significantly since the original appraisal.
Now we are to the requirement to analyize the market as of the new effective date. The assignment is to see if the market is "not less than" the benchmark opinion of value in the prior appraisal. The form requires a "Summary" report of this. It is a new assignment.. what would Standards One and Two require to determine that? Development is required, reporting is required just like in any appraisal. A SOW of only new sales comparable may be satisfactory for this purpose. Redoing a Cost Approach could be not required. However, be careful if the Income Approach was applicable prior it probably should be done again. Unless you feel a "not less than" conclusion can be properly defended using only the Sales Approach. If approaches used in the original appraisal are not repeated in the new assignment, any astute appraiser had sure better be explaining why they are not repeated and not needed for the new SOW.
You need to analyze any approaches used and "Summarize" this in a report as the 1004D is indicated to be a "Summary Appraisal." With respect to my colleagues, I believe some examples here are stopping short and not doing enough to reach the requirement to "Summarize" and are only providing examples of "State" for a reporting requirement.
In my book, as this is a "New Assignment" being done perhaps many months later after a prior appraisal (I was recently asked for one ten months later.) many other things that were in the original appraisal have to be restated. Not just taken for granted that they are the same as in the prior appraisal without making any comments to that effect. The highest and best use for example. The 1004D should really require a "Statement" that you concur with the prior appraisal and a "Summary" of what form of inspection was done. These things should not be left to the imagination and everyone wondering if the minimum has been met or not, or if something beyond the minimum was done. A "Statement" regarding if the new comparable were curb inspected or not. Was this turned into basically a desktop appraisal with only a driveby of the subject?
To me a LOT of serious questions are left unanswered by this form. As a client, or underwriter, I'd want the damn answers... as a review appraiser asked to review this turkey (this is what started this thread) I would demand the damn answers! Personally, I believe many appraisal boards are going to demand answers when the time comes after they get a complaint regarding one of these. My board put it well a long time ago. "Say what you do, and do what you say."
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When I say every form is insufficient, it means don't use one of those infernal things unless you have to (institutional client). The constructive notice is part of your diligience in warning off those "may reliers."