Revision request vs update vs new appraisal

[Zoe]

P

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.

I can't say you are totally right in your synopsis. But if they changed the plans and specs with 10% adjustment in cost on proposed construction?

It is new assignment. You have builder involved, lender involved. Neither builder or lender are dumb. Go build a house and make a 10% change in the contract you signed. See what happens.

Go ask lender for 10% more on what you apply for on the loan?

Catch my drift?

 

[Zoe]

One of people these days apparently is you need to be concerned very much about borrower also.

 

[Badlands]

One of people these days apparently is you need to be concerned very much about borrower also.

I got the revision request while visiting family in AZ, I have not read the attachments. I just saw the description in the revision request. It says new lower price for Materials list “will it affect value.” That pretty much answers my question. If they said change to plans and specs it would have been obvious as well. All the feedback has been helpfull. Discerning the difference between and update and a new appraisal is part of the equation as well.

 

[sputnam]

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.

I've tried... many times... to get Clients to let me chage based on the time spent on the assignment. No takers. Lenders can't do it that way because their regulations require them to provide a good faith estimate of closing costs to borrowers. If they get it wrong by much, their regulators give them a hard time.

 

[J Grant]

I've tried... many times... to get Clients to let me chage based on the time spent on the assignment. No takers. Lenders can't do it that way because their regulations require them to provide a good faith estimate of closing costs to borrowers. If they get it wrong by much, their regulators give them a hard time.

I was using lawyers as an analogy, no hope in heck we could charge by the hour or minute -

 

[J Grant]

an update is a time assignment - appraisals run out after 6 months so a lender or client needs to know if the value has declined since then.

 

[J Grant]

I got the revision request while visiting family in AZ, I have not read the attachments. I just saw the description in the revision request. It says new lower price for Materials list “will it affect value.” That pretty much answers my question. If they said change to plans and specs it would have been obvious as well. All the feedback has been helpfull. Discerning the difference between and update and a new appraisal is part of the equation as well.

If you want to answer them in an email, yes, a 50k reduction in upgrades will most probably affect value and a new appraisal would be needed. Thank you.

Now the ball is in their court.

 

[BRCJR]

What is an appraisal "update"?

When we use incorrect phrases, we only assist non-appraisers (lenders mostly) in believing their request is not a new assignment/appraisal when, in fact, it very well may be such.

Most may think it is a petty issue but, I think we should be correct in our definitions (terms used) even if others are not.

A New Assignment of a Prior Assignment
Regardless of the nomenclature used, when a client seeks a more current value or analysis of a property that was
the subject of a prior assignment, this is not an extension of that prior assignment that was already completed – it is
simply a new assignment. An “assignment” is defined in USPAP as:
a valuation service that is provided by an appraiser as a consequence of an agreement with a client.

 

[Tom D]

i think the poster asked the question to fast before understanding what he was looking at. it wasn't just changing the color scheme, or some upgrades. however, in this case if it was only the cost of the materials that went down and the cost to build went down. so how does that value change the same exact house, but now costing less to build value. you ain't gonna find any comps with that question, or changes answering it. so does the appraised value change, i see not. just replace the bid in the report. if it's a change in upgrades, and you think different, then new appraisal at a discount.

 

[sputnam]

What is an appraisal "update"?

When we use incorrect phrases, we only assist non-appraisers (lenders mostly) in believing their request is not a new assignment/appraisal when, in fact, it very well may be such.

Most may think it is a petty issue but, I think we should be correct in our definitions (terms used) even if others are not.

A New Assignment of a Prior Assignment
Regardless of the nomenclature used, when a client seeks a more current value or analysis of a property that was
the subject of a prior assignment, this is not an extension of that prior assignment that was already completed – it is
simply a new assignment. An “assignment” is defined in USPAP as:
a valuation service that is provided by an appraiser as a consequence of an agreement with a client.

Yep. Change the effective date... either directly or in a way that says 'the market hasn't changed'... it's an appraisal. A new assignment.