Reviewer's name withheld

[hastalavista]

David-

I was writing my example while you posted yours.

 

[xm72mhd]

I disagree with Edd and agree with Steven on this one. The client (or reviewer) is not a mind reader; explain what is done in the report. That's why they are paying you.

Here's a recent example:
I just completed an appraisal on a completely restored historic home. Real serious...all of the moldings in the home were taken off, stripped down to the wood, placed back, and repainted. This eliminated the usual chipped-paint look. All of the windows and doorways were made plumb, so all of the original doors and windows work. All the plaster was repaired...etc., etc.

When it came time for the sales analysis, I used a specific set of sales. Historic homes were used, newer ones were not, regardless of location or price.

I could have simply thrown the sales on a grid; hey, I would have known what I did...but the casual reader may not have.

So I described the home in great detail, explained the methodology for sales selection, and explained why certain sales were not used. In this particular case, I was able to do this as a class. Historic homes used; new homes not. As a result, the reader is not left in the dark about anything.
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If there is any one thing that is lacking in reports I review, it is methodology. I am left in the utter dark about why certain sales were used an others were not.

For example, in the rebuttal I received that I was PO'd about, the appraiser did not use other waterfront sales in the immediate area (plenty of them), but instead chose sales miles away outside of the village. Why? Beats me...how about a few lines of methodology for sales selection, and maybe a few lines about why specific sales on the street were not used.

Doing so would've likely eliminated the review in the first place.
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We're being paid for our expertise...give the clients something worth reading.

I agree for the assignment you describe, but you missed the point. Why didn't you explain why you didn't use The Methodist Church and the courthouse. That is the point. Also for an assignment such as you describe detail may be warranted, but such assignments are the exception and not the rule here. How about the cookie cutters, or when you struggle to find even three comps so you can fill up the darned Fannie form?

Rich Hey pointed out that credibility is relative to the assignment and SOW. Do you and Steven do this amount of explanation on everything, regardless? Rich asked me where does it stop?

 

[xm72mhd]

Tell me where you "detail in the name of communication" guys stop explaining what you didn't use by way of comps and why.

 

[Tony Blackburn]

I have to agree with Dennis, Richard and George. The only thing I would expand upon is Richard's comments on professionalism. Mortgage brokers and others love it when we bicker and fight and throw insults. Leave that to the kids at the playground. This is a profession that we all work very hard to maintain in terms of education, integrity and skill. Any slamming of someone else in our profession, just because they have a different opinion than we do on a review, makes the slammer look unprofessional, not the slammee. Your best bet is to be objective and address each point in the review thoughfully, carefully and professionally, with common courtesy thrown in for good measure.

 

[Brad Ellis]

TE Lawrence,

No one is suggesting that an appraiser must discuss ALL the sales out there; what is important is for the appraiser to discuss the ones he/she feels might be found and noted by a review that are NOT considered by the appraiser to be relevant.

Not every sale is a comp, of course.

If you are telling me that you would not discuss a situation in which you failed to use model matches due to non-arm's length transactions then I'd say you are only making more work for yourself.

If you are going, say, over a mile and there are 20 more proximate sales that are out there, then don't you think some explanation is in order? There are probably good reasons for it- and it is your job to discuss that so that readers can follow your thought processes.

However, you and I both know- as do all the legitimate folks on this forum who scream about "skippy" that the easiest way to make the number is to ignore the really good comps out there in favor of more distant, less similar sales that support the higher number.

THAT is why you should at least provide discussion on some of the stuff that might appear on paper to be useful but that, for the particular assignment, really are not the best or better indicators of value.

Do remember that SR 1-4 uses the words..."analyze all information necessary..." and that SR-2 uses the words ..."the reasoning that supports the analysis, opinions, and conclusions..." So, while I agree that one need not discuss every little bit of market data, it sure makes good sense to discuss stuff that others might think useful that you, as the appraiser, know is really not useful.

Brad

 

[Jim Onderisin]

Mark: If so little of the review was provided that you could not understand the review conclusion, why not just let the client know that? If you do understand the conclusion and it makes no sense, just tell your client why it makes no sense. If you notice something about your own report that should have been clarified, but you overlooked it, just clarify that point and point out how your report makes as much or more sense than the review.

 

[xm72mhd]

So, while I agree that one need not discuss every little bit of market data, it sure makes good sense to discuss stuff that others might think useful that you, as the appraiser, know is really not useful.
Brad

So how do you know what others might consider useful? I might want to know why a sale across town isn't useful and you might think its not because its across town and you told me you reseached the market and chose the best comps. Why can't we live with that?

What's all this second guessing crap?

 

[Hal Mann]

The client (or reviewer) is not a mind reader; explain what is done in the report. That's why they are paying you.

Beyond ethical issues, this is the biggest problem I see in the profession. As a reviewer, I read a lot of appraisal reports, and far too often find that while appraisers explain what they did include in their analysis, they rarely explain what is not included. Simply listing the sales that a reader may be aware of that appear comparable but aren't and why they aren't will cut way back on questions and stips later.

Along the same line, sometimes I find the appraiser doesn't see (or should I say report) the forest for the trees. Sometimes certain things about a property seem so obvious to the appraiser that they don't get proper emphasis in the report. I've read appraisals of waterfront properties that fail to even mention this. When I call to ask about the report, they are surprised to find I don't already know that about the property. One really does need to remember that the readers of appraisals are not mind readers!

 

[The Warrior Monk]

Why didn't you explain why you didn't use The Methodist Church and the courthouse.

C'mon Edd...did anyone in this thread ever suggest using unrelated property types as comparables?

That is the point. Also for an assignment such as you describe detail may be warranted, but such assignments are the exception and not the rule here. How about the cookie cutters, or when you struggle to find even three comps so you can fill up the darned Fannie form?

IMHO, if one is struggling to find even three comps, that is a perfect example of an assignment that requires further clarification. Why aren't there additional comps? Rural area? Low density of housing? Inactive market? Explain, explain, explain...nobody said write a novel, but doesn't it make sense to leave the reader in the dark.

Rich Hey pointed out that credibility is relative to the assignment and SOW. Do you and Steven do this amount of explanation on everything, regardless? Rich asked me where does it stop?

It is related to the SOW. Before we discuss where it stops, the more important and relevant issue is where does it start. Most reports I review don't even get to that point...I'm left utterly in the dark about the methodology.

As far as an explanation goes, let's say we have a cookie-cutter assignment (something I dream of...LOL!). What is wrong with stating that there are 60 sales in a two block radius and the most recent (closest, similar style, etc.) of those 60 sales were used? You've just clarified a specific issue that was implied and left for the reader to guess at.

 

[George Hatch]

I think the nature of appraisal review has an effect on the "appraisal" portion of the assignment. What I mean by this is that the value opinions I express as a reviewer are a little different than they would be if I were appraising the property myself.

Part of the reason for this is that even with a field review, I'm not "hands-on" with my inspection of the subject and I usually can't develop my own opinion on that well enough to say I know as much as the original appraiser. Often there are questions that I would ask and answer that might affect my value opinion but which are omitted in the appraisal report under review.

However the bigger reason for the "different" value opinions is that they're expressed as part of an assignment that is about developing an opinion of the quality of the workproduct. A review is about the workproduct, not the subject property; and I think a value opinion expressed in the context of that review should also be developed within the context of the workproduct. When it comes to contradicting someone's professional opinion, I think it's appropriate for a reviewer to acknowledge that there will usually be some variations of opinion between appraisers that have nothing to do with appraisal standards or assignment requirements. There's a difference between "reasonable" and "accurate", the latter implying a degree of precision that generally isn't practical for most assignments.

That's why the value opinions I express as a reviewer are intended to reflect my opinion of what a reasonable range among my peers would be, rather than the one value that I would express if it was my assignment to begin with. If the original value falls outside of that range, that means I think that most of my peers (when working to standards) would consider it unreasonable. Obviously, that's not going to happen unless I can point out some factual errors of omission and/or commission that caused or enabled the original opinion to be unreasonable.

That's why I think it's a huge mistake for reviewers to approach their value opinions as if the assignment is primarily about the subject property rather than the workproduct and as if there was only one "accurate" number for that subject. That misdirected focus simply begs for personalized disputes that more often resemble catfights than professional appraisal practice.