Revision request vs update vs new appraisal

[Tom D]

Appraisers are too cowed and frightened to ask for a fee or a new assignment- that is what these cheap clients are hoping for.
We all are familiar with a change order or two, but the assignment was complete and finished. Now a month later they have new information and want to re open the whole thing wrt the client spefciall asked if the value will change.

if such, yes you deserve to be paid, if you have to upgrade the value & comps.
grant, do you have any long time direct lender clients. i get paid well, no annoying questions, consistent orders. now, on most appraisals i think they are easy, so sometimes when there is a difficult appraisal or some construction change i do it for no extra nada. i'm not frightened, it's called a long time business relationship. and don't do pre construction without expecting to see some cosmetic changes during the course. changes that don't affect anything important on the appraisal is not a new appraisal. if changes do, you can do & charge what you want. and as slow as it is, the lender will look at someone else next time.
you all do what your happiness desires, the client will also do the same. AMC different story, i don't do plantation orders.

 

[J Grant]

Poor ( literally dollar-poor by this point in time), row-beaten appraisers, trembling with fear about charging for their time or calling it a new assignment. Meanwhile, lawyers charge by the minute, and everybody else is charging big fees just to show up or give an estimate in a trade, and if they come back for additional work, they give no discount for having been there a month ago.

 

[J Grant]

if such, yes you deserve to be paid, if you have to upgrade the value & comps.
grant, do you have any long time direct lender clients. i get paid well, no annoying questions, consistent orders. now, on most appraisals i think they are easy, so sometimes when there is a difficult appraisal or some construction change i do it for no extra nada. i'm not frightened, it's called a long time business relationship. and don't do pre construction without expecting to see some cosmetic changes during the course. changes that don't affect anything important on the appraisal is not a new appraisal. if changes do, you can do & charge what you want. and as slow as it is, the lender will look at someone else next time.
you all do what your happiness desires, the client will also do the same. AMC different story, i don't do plantation orders.

Any lender who orders direct lender in this scenario would not hesitate to be charged or it or call it a new order. Then again, as you note, they are far less f**d up then the AMC 's,who themselves are groveling to keep clients and try to extend that to exploit the appraiser that supports their very existence by the fee split.

 

[Badlands]

My vote, new assignment.

It can basically be a clone of the prior report except what JTip said and your fee is a business decision.

edit//
and prior service disclosure as Terrel mentioned too

Thanks for the feedback!

if such, yes you deserve to be paid, if you have to upgrade the value & comps.
grant, do you have any long time direct lender clients. i get paid well, no annoying questions, consistent orders. now, on most appraisals i think they are easy, so sometimes when there is a difficult appraisal or some construction change i do it for no extra nada. i'm not frightened, it's called a long time business relationship. and don't do pre construction without expecting to see some cosmetic changes during the course. changes that don't affect anything important on the appraisal is not a new appraisal. if changes do, you can do & charge what you want. and as slow as it is, the lender will look at someone else next time.
you all do what your happiness desires, the client will also do the same. AMC different story, i don't do plantation orders.

Thanks. To be more specific I have made updates for small changes, happy to do it. The lender is a good client. This request is to look at a new materials package budget, $50,000 less. Review the new package document's and tell them
If it affects value. A little Bell went.. hmmm. I am just wondering how other appraisers handle this and where you draw the line with revisions on new construction.

 

[Badlands]

since we do not know the exact changes, how can you say new appraisal. these changes might just be cosmetic in nature, and not have any affect on value. and you can't tell just by looking at it that it's minor cosmetic changes. i did tons of new construction, and items changed as the job progresses. that doesn't mean a change in value. so you are going to charge for a whole new appraisal for a color change, maybe different floor coverings. it's your business decision and you future client, or not. unless it's a major change in GLA, or price jump, then it's just different decorating schemes. i would have had to do new appraisals 5 times during their construction. if it doesn't affect the value, then just add it to the appraisal, it's a material fact, not a value issue. what you charge depends on how much you like this client, or not.

I like the client, i have made several updates or changes for small things. This is a $50,000 lower budget and new materials package. My question is where do you draw the line and where do you cross a line in terms of USPAP.

 

[J Grant]

I like the client, i have made several updates or changes for small things. This is a $50,000 lower budget and new materials package. My question is where do you draw the line and where do you cross a line in terms of USPAP.

Clients are supposed to pay for services and you already did several updates/changes gratis.

A 50k budget can change the value by 50k ( or in that range.) It is certainly a case where most appraisers would "draw a line " that it is significant enough of a change to the property to need a new opinion of value - which is normally called an appraisal. We are not supposed to cross a line for USPAP, and a "good' client would not expect you to. This is not a revision, but keep talking yourself into it if you want to.

Sometimes a good client over steops the bounds and needs a correction to do the right thing.

 

[Zoe]

Changes usually go upwards in many proposed construction assignments and the borrower has to cough up cash for any new adjustments to the original contract. I want this added or this changed to original contract. Builder. "okay no problem" give the "cash to do it".

I say new assignment on $50,000 downward adjustment to cost to complete. That is a big shift one way or the other depending on price of home.

 

[Webbed Feet]

I like the client, i have made several updates or changes for small things. This is a $50,000 lower budget and new materials package. My question is where do you draw the line and where do you cross a line in terms of USPAP.

Hi Badlands. Go back to your USPAP and read the Scope of Work rule once more. Beyond the "beat up appraisers" and "keep your client" debate, I feel all we need to ask here would be "Is this the same house?" It would be more apparent if the original assignment had plans for a two story house, and you were just sent plans for a one story house with dramatically reduced costs of construction. Same lot, same location, different house = New and different Scope of Work = New Assignment. We can use a lame analogy about cars here. Would a same model car that has a LX "package" and another one that has the DX package be deemed "the same car" by the market for cars if one was $30,000 and the other $40,000? I know my answer to that one. Is this client, in essence, asking you to by way of your license and expertise to look again at new market evidence to determine if there is a market value difference between a LX and a DX? If this request would have been made originally with you presented with one set of plans, and two different sets of "specs" for the house framed as a request for you to analyze the market differences between the packages and opine regarding values for each of them, would you have considered the process of doing that one real estate appraisal or two real estate appraisals? Keep in mind I did not state "reports," but "appraisals."

I believe the facts will bare themselves out to you as to what is being requested from what should be a real estate appraiser's viewpoint. Do not allow trade jargon buzz words, such as "update" or "upgrade" or "reconsideration of value" to mislead you as to what the request is. Then after that, my advice would be to consider what kind of living you make or career you have when one finds themselves working for free or perhaps sub-minimum wages.

Best,
Webbed.

 

[J Grant]

50k is significant- it is not a 5k option change which might not have enough impact on value to matter

 

[Badlands]

P

Hi Badlands. Go back to your USPAP and read the Scope of Work rule once more. Beyond the "beat up appraisers" and "keep your client" debate, I feel all we need to ask here would be "Is this the same house?" It would be more apparent if the original assignment had plans for a two story house, and you were just sent plans for a one story house with dramatically reduced costs of construction. Same lot, same location, different house = New and different Scope of Work = New Assignment. We can use a lame analogy about cars here. Would a same model car that has a LX "package" and another one that has the DX package be deemed "the same car" by the market for cars if one was $30,000 and the other $40,000? I know my answer to that one. Is this client, in essence, asking you to by way of your license and expertise to look again at new market evidence to determine if there is a market value difference between a LX and a DX? If this request would have been made originally with you presented with one set of plans, and two different sets of "specs" for the house framed as a request for you to analyze the market differences between the packages and opine regarding values for each of them, would you have considered the process of doing that one real estate appraisal or two real estate appraisals? Keep in mind I did not state "reports," but "appraisals."

I believe the facts will bare themselves out to you as to what is being requested from what should be a real estate appraiser's viewpoint. Do not allow trade jargon buzz words, such as "update" or "upgrade" or "reconsideration of value" to mislead you as to what the request is. Then after that, my advice would be to consider what kind of living you make or career you have when one finds themselves working for free or perhaps sub-minimum wages.

Best,
Webbed.

Thanks, my gut said new appraisal or update at a minimum, but then an update seemed sketchy as in USPAP rules.
Part of my question is process, how to respond to the request. It would be easier if it were an AMC instead of a loan officer that sends a fair amount of work my way.
My thoughts are that the principle of substitution would come into play, in a market where there are no new spec homes, it is not going to appraise for more than it costs to build. ( There are more lots available.)
I was thinking I would reply that if there are any changes to square ft of living space, finished living space or quality of finish It would affect final value.
If the change in cost was smaller ( inside the range of adjusted values) it could be an update. But more time is probably required to do an adequate analysis with basicly a 10% change in cost.