Review Rebuttal

[ghrousseau]

I completed an assignment several months ago. Recieved full fee from owner.
Nice property close to county line. Manufactured home of superior quality, Barn of superior size and quality, etc. Cost approach has property in high $300's. Conservative adjusted sales comparison range is $275 - $325, Actual sales range $240 - $300. In my opinion subject is superior to all sales. All comparables are in same county as subject, although inferior sales are avaliable in neighboring county, closer to subject. Very little market value to support any opinion of value in the area, much less this superior property, so I bring subject in at $300, trying to be conservative while still stating subject is a superior property..
Report is now updated and sent to new lender after recieving appropriate fee.
New lender is not "Regular" a client of mine, i.e. never recieved an order from "Big" lender. Report is sent to review, and reviewer's opinion is $240, never setting foot on property. I recieve phone call from originator and lender asking me to rebutt reviewrs opinion. This will take a while and at first I want to argue. Now the question, is it worth the effort for a lender that does not routinely use your services? I have not been offered any reward for my efforts. Or is it a matter of pride to try and defend your value? Remember there is limited market data to support any opinion.

Since you were aware of the low sales, and the possibility that a review appraisal report might identify those lower sales as potential comparables, I would say yes you have an obligation to defend your report. In this current lending and market environment you should be taking extra time to address all of these issues within your addendum. If you tell the lender to go pound sand, the homeowner potentially suffers. If you confidently appraised the property at X, then you need to insure that the end reader can clearly arrive at the same conclusion as you.

 

[Restrain]

Here's my viewpoint if I was reviewing your report (based on the limited info given). If the subject is superior to everything else, did you consider a superadequacy. I would expect the subject to be bracketed. The fact that you brought it in over all the other sales without writing a book would really get my attention. That's probably what got the in-house reviewer's attention as well.

Anytime you hit something like this, you really need to write the book. Who, what, why, how come the value's high, etc. Appraisals like this need a lot more support than the typical report.

Here's some suggestions for those of you who hit these. Always have at least one sale higher than the final estimate of value. Bracket the subject in terms of size, site size, etc. Any pools, large barns, etc, provide at least one sale with similar amenities. Large sites, provide vacant land sales, demonstrating the site value and adjustments.

Remember, anyone who reviews a report is relying on what is in the report. In today's high-risk lending market, all unusual appraisals are under a significant probability of an in-depth review. Will it take longer to do one? Yes. But it will cut down on the come-backs from the lenders, saving you much in time of overall costs and effort.

Finally, one comment was along the lines of, are you doing this for free? You better not be charging for this. If the report was not acceptable, it's your problem to fix it. If I have a plumber come out to fix the pipes and it still leaks, I'm not paying for him to come back and finish the job. Same with an appraisal. Just because you think it's done doesn't mean that it's done to the satisfaction of the client, and that's the final user. It's your responsibility to provide an appraisal that satisfies their needs (not value driven, etc) that meets their underwriting criteria.

 

[Dwayne Drummond]

Thanks for all the replys. I took the time and answered each comment. I did not bring it in higher than any sale I had, although I consider it superior. There are not available sales to completely bracket, that is one of the problems. Superadequacies were a consideration, and a reason I stayed within the actual sales range, while the adjusted range was higher. I sent a bill, but am now reconsidering following the last comment. However, that would imply I was wrong and needing to "Fix" something?

 

[c w d]

An appraiser's location in reference to the subject does not constitute a geo-competency issue alone.

Has he demonstrated a lack of geographical competence? Did he compare a property on the right side of the tracks with a property on the wrong side of the tracks? Or does the fact that his address is ~90 miles from the subject alone make him incompetent. Personally, I don't believe you need to live in the same town to be geo-competent. With enough in-field research one can determine what is comparable from what is not. Although, the further out you go the weaker your position and ultimately the credibility of your report without adequate demonstration to the contrary.

 

[Mike Boyd]

I open a comment page and just write a narrative as rebuttal.

 

[Mike Siegfried]

You better not be charging for this. If the report was not acceptable, it's your problem to fix it.

Thank You, I was waiting for someone to say that. The idea of charging to defend your work is preposterous. It should be a matter of pride in your work. The times I have been cut (fortunately about twice since 2000), I take it very personally and will go to the ends of the earth to prove them wrong. My greatest accomplishment was about 12 years ago when I was responsible for getting an American Savings reviewer transferred because I proved that she didn't know the market in LA. Ahh, sweet victory. Oh, and PS, I have ALWAYS gotten my value back.

Mike

 

[Dwayne Drummond]

A good illustration is what side of the "Tracks", county line in this instance.
A reviewer can have access to local MLS, but if you live over two hours away from the subject, I don't think you are spending a whole lot of time in the neighborhood. Since this was a desk review, I know he didn't travel over here and drive by the subject or his "Comparables".

 

[Webbed Feet]

<.....snip.....> trying to be conservative while still stating subject is a superior property..

So that is our mission, to be convervative. Hmmm. That sure is news to me.

Report is now updated and sent to new lender after recieving appropriate fee.

Gee, that's funny. I thought an "Update" was a new assignment. I thought a new client certainly meant a new assignment and that "Updating" was not an extension of any prior assignment. ... Hmmm. Silly me!

I recieve phone call from originator and lender asking me to rebutt reviewrs opinion.

Why? ... You gave them your opinion. That was not enough. They selected and hired a different person for a new assignment that included two phases, a review PLUS a new opinion of value. They caused the quandry, they should pick who they want to believe.

Now the question, is it worth the effort for a lender that does not routinely use your services? I have not been offered any reward for my efforts. Or is it a matter of pride to try and defend your value? <..... snip ....... >

Now they want a free rebuttal, not included in the original engagement contract, to a different assignment that had a different SOW from yours? My view? ... I don't have to "defend" my value!.... I already stated "my" value opinion and fully advocated for it in my original report. .. No, now they are asking me to review the review and attack the reviewer's value opinion that was based on a different SOW. .. My answer?

:new_alien:

It is very far past time that all of lending get their crap together. It is very far past time that appraisers need to all start refusing to play in this stupid game.

Webbed.

 

[Webbed Feet]

Thank You, I was waiting for someone to say that. The idea of charging to defend your work is preposterous. <..... snip.....> Mike

Then if the original appraiser performed a quality job 100% USPAP compliant, I then put forth the idea of being forced to defend it for free and not file a board complaint against the reviewer is equally preposterous....

It sounds to me like the main issue is the two SOW's were not equal. Lending has no business ordering different SOW assignments regarding value, and then going back with requests that the original appraiser "defend" a value opinion. Answering questions regarding the credibility of a method, adjustments, or data used in the analysis is one thing. But asking the original appraiser to mount a simultaneous defense and attack regarding the original value opinion, versus the one of the reviewer who had a completely different SOW, is just wrong. Lending needs to get put in it's place about this.



Webbed.

 

[Chelley Bahner]

Then if the original appraiser performed a quality job 100% USPAP compliant, I then put forth the idea of being forced to defend it for free and not file a board complaint against the reviewer is equally preposterous....

It sounds to me like the main issue is the two SOW's were not equal. Lending has no business ordering different SOW assignments regarding value, and then going back with requests that the original appraiser "defend" a value opinion. Answering questions regarding the credibility of a method, adjustments, or data used in the analysis is one thing. But asking the original appraiser to mount a simultaneous defense and attack regarding the original value opinion, versus the one of the reviewer who had a completely different SOW, is just wrong. Lending needs to get put in it's place about this.



Webbed.

I concur. This is absurd. There's a big difference between explaining items in your appraisal report and providing a second review between your work and the desk review. I'll explain anything in one of my appraisal reports any day. But if you want me to review someone's else's work compared to mine, that's going to cost you. Asking that becomes a new review assignment and you should be compensated for it.

I worked for a lender as an underwriter before. If we ordered a desk review on an appraisal we questioned and there were differing values, we went with the lower to reduce risk and that was the end of it. That's the way it should be. We got that appraising wasn't an exact science.

On the other hand, I will address issues from underwriters who derive their "own" opinion of value based on data from who-knows-where. When they question one of my reports because sales they found, probably on Zillow, don't support my value or they have a general "declining market" list that shows the subject property is affected because of its zip code, I'll give it to them. I can't help but do the extra work there. It's too much like putting a band-aid on a cut and calling yourself a doctor... They need to be reminded of that.