Reviewing what?

[xm72mhd]

I'm going to do a desk review to see if I can figure out what to do. So this one used a sales approach (really bad comps of course and unexplained adjustments) that supports a value in the range of $134,400 - $157,450 and a cost approach of $152,245.

Reconciled value in report = $120,000. Contract price $118,000. Guess what the appraiser's scope had in it.

Reconciled value actually looks about right for that market, but you couldn't get there with the info in this report.

Client wants to know if accurate and if I don't agree with value state why and make a new sales grid. Well funny thing is, I'll probably agree with value, but the appraisal is one of the crappy ones you guys seem to do.

So do I come up with a review scope that includes USPAP and the client's wishes, or just send the darned thing back?

Lots of other junk in the report to make underwriters behave, but some of it ain't true. I happen to know this property from two subsequent appraisals beginning in 1996. It started out at $144,000 then to $125,000 in 2003 and now it's definitely lower. Appraiser doesn't mention the physical depreciation that is rampant, the fact that there are two houses (one was uninhabitable the last time I saw it) and barns, that there is an un-permitted homemade addition and other alterations to the residence and says the market is increasing when it most definitely is not. And the appraiser checked a 40 acre parcel in the boonies as suburban. Course its not far from a highway so I guess the appraiser couldn't pee without notice off the porch.

 

[George Hatch]

An appraisal is more than just a number.

You obviously have some errors of omission and commission - those need to be noted and corrected. If you disagree with the comp selection you need to explain why and provide the better alternative. Your reader will end up making their own decisions about which (if either) is more credible.

By the time you get done with it and when including your report in with the original appraisal, your client will have enough information to make their decision. You will have saved them time and money because now they won't have to reject this report and get another, and they won't have to review that other to ensure it doesn't contain the same errors this one has.

If there is a problem with this property from the lender's standpoint, it probably won't be the final value conclusion; it'll be one or more of the subject's attributes that were omitted or mischaracterized in the report. It's an example of why "if the value is accurate" is a clumsy and possibly inappropriate standard by which to judge appraisal work.

 

[Fred]

Edd,
What? You couldn't bait George enough with the fantasy elephant review?

Client wants to know if accurate and if I don't agree with value state why and make a new sales grid. Well funny thing is, I'll probably agree with value, but the appraisal is one of the crappy ones you guys seem to do.

You just identified the problem, the intended use and the assignment results. You are almost done.

 

[xm72mhd]

You just identified the problem, the intended use and the assignment results. You are almost done.

I'm told this is one of the "better" clients to review for. Bet if I send the review with the comment that the scope was sufficiently limited to effect the credibility of the appraisal therefore rendering the report meaningless, the client will come back with, " But, is the value OK?"

So, I guess I better suck up if I want more work, huh!

 

[Fred]

Edd,
I don't think you followed. That's your assignment results. The client wanted to know if the value is accuate and you said, yes. You're done. The rest is typing.

 

[Rudy Canoza]

Edd,
I don't think you followed. That's your assignment results. The client wanted to know if the value is accuate and you said, yes. You're done. The rest is typing.

I sorta disagree...

If the report is technically unreliable, the value is unreliable. Even though you may agree with the value, the conclusion is unsupported and unreliable. The report can't be used...

/Accidents happen...

OR...

//A stopped clock is correct twice a day...

 

[George Hatch]

If the only question is about the number then you're almost done. If the client's actually asking about more than just that then you have a ways to go. The decisions made by lenders (which I assume it is) are based on more than just the final number, and both the appraiser and the reviewer need to keep that in mind.

One other thing: How can you say the SOW was so limited it affected the credibility when it's the process actually followed was in outright conflict and contradiction with what was asserted in the report? There's a big difference between "so limited" and "outright untrue".

 

[xm72mhd]

Edd,
I don't think you followed. That's your assignment results. The client wanted to know if the value is accuate and you said, yes. You're done. The rest is typing.

Well, actually the client wants to know if the report is accurate and if I agree with the value. So I don't know what part of the report the client is interested in being accurate. The market will take me to the value, and I suspect it will be close to the opinion in the report, but the what is in the report woll not lead me to the value that the appraiser opined.

What do you think the client's assignment is? Accurate and value or accurate value?

 

[xm72mhd]

One other thing: How can you say the SOW was so limited it affected the credibility when it's the process actually followed was in outright conflict and contradiction with what was asserted in the report? There's a big difference between "so limited" and "outright untrue".

Good point! How about f*(&^%up mess. Is that defined in USPAP?

1004 Cert 7 sortof says " the best comps are in my report." But, I don't think it is true for this one. I've better ones that underwriting will like better too. Isn't that a difference of opinion?

 

[Mike Kennedy]

So this one used a sales approach (really bad comps of course and unexplained adjustments) that supports a value in the range of $134,400 - $157,450 and a cost approach of $152,245.

* "really bad comps, unexplained adjustments." / Both Violations of USPAP and Fannie Guidlines.

* "Reconciled value in report = $120,000. Contract price $118,000."

based on comments above 134400-157400 ???????? cost approach $152, 245? any comps used bracket Reconciled Value? Depreciation Estimates in Cost Approach based on ????? calculated correctly???? Reconciled value actually looks about right for that market, but you couldn't get there with the info in this report." / Incompetency - USPAP

"Client wants to know if accurate and if I don't agree with value state why and make a new sales grid. Well funny thing is, I'll probably agree with value, but the appraisal is one of the crappy ones you guys seem to do."

/Suggest Client instructions incorporates unstated - "based on the data in the Report" ...............including the sales used.......

"So do I come up with a review scope that includes USPAP and the client's wishes, or just send the darned thing back? "

/Based on your analysis of the sales used ......which do not support the Final Value...........thats your answer. "new grid" reliable Value Opinion based on verified data.

"Lots of other junk in the report to make underwriters behave, but some of it ain't true. I happen to know this property from two subsequent appraisals beginning in 1996. It started out at $144,000 then to $125,000 in 2003 and now it's definitely lower.

**** Appraiser doesn't mention the physical depreciation that is rampant, the fact that there are two houses (one was uninhabitable the last time I saw it) and barns, that there is an un-permitted homemade addition and other alterations to the residence and says the market is increasing when it most definitely is not. And the appraiser checked a 40 acre parcel in the boonies as suburban."

/ so in essence the Report contains fraudulent subject property data, description, misleading Physical and/or Functional Obsolescence, Erroneous Cost Approach, and fails to cite Illegal Use, reports Market Value Trend which is erroneous, and intentionally misrepresents comparable location.

Edd- Sorry......but, I'm just not sure what your hesitation is. It IS what it IS - a Fraudulent Appraisal.