Revision Request

[residentialguy]

A new contingent fee is a problem

It's not contingent. They cost $75 a property. If the appraiser made an error on the original appraisal, then the appraisal will be corrected to include those sales. The fee for those sales is already paid for, since the appraiser is to use the best sales

 

[Terrel L. Shields]

I have bid after looking at the assessor card . whether I use the assessed value or the size, sketch, pix, or lot size...I can set my fee accordingly. I recently charged extra to a report in a very rural area knowing that there would be a minimum of comps. In fact in that two township size area there were exactly 5 sales under $100,000 and 1 over $200,000, none in between. I picked the best 3 and went on. Since I examined all the sales, what ROV could they ask for? Manufactured homes? Gluck with that...

 

[Rick Stillman]

Charging for ROVs are simply a fee charged for additional work requested by the client that is added from the original SOW. If the appraiser finds that they made a mistake, then obviously that should have been included in the original report, thus no fee would be warranted. This is nowhere near the intent of the management section of the ethics rule.

However, as a side note, it is very pertinent the lender's choice to pressure the appraiser for value...a violation I highly doubt they want to face. just sayin...

Expand the scope of work - expand the fee. What's so hard about this?

What does the scope of work even exist for? To limit my obligation to meet any ongoing work which the lender may feel they are entitled to carte blanche, ad infinitum, et cetera. (Man I love quoting latin. I can keep up those ivy league law types all day long.)

Lob this over in a report and see what happens: Scope creep is too often ignotum per ignotius and must be dealt with accordingly within the confines of the predetermined scope of work incorporated herein.

Plain and simple. Thank YOU Resguy for getting it! Too much kool aid has been proven to be hazardous to ones thinking, according to the Surgeon General.

 

[The Bob]

If what they want added or deleted from my "draft" is not relevant they got them an "appraisal" they may call a draft.

An appraisal is an appraisal if it walks like one......

Tell that to the judge.

Oh, that signed report is just a "draft".

My point is, in the eye of the lender/client, until the report meets all their expectations for content, it is not a completed report in their view.

 

[DWiley]

It's not contingent. They cost $75 a property. If the appraiser made an error on the original appraisal, then the appraisal will be corrected to include those sales. The fee for those sales is already paid for, since the appraiser is to use the best sales

So, they cost $75 each, depending on the results of the appraiser's analysis.

To paraphrase the USPAP instructor course, the prohibitions in the ETHICS RULE exists because either (1) they are unethical, or (2) they inspire unethical behavior. In the arrangement you suggest, is the appraiser not motivated to find a reason to discredit all alternate sales, because doing so leads to a monetary reward for the appraiser?

 

[residentialguy]

So, they cost $75 each, depending on the results of the appraiser's analysis.

Last I heard, the lender chooses the subject, the appraiser chooses the comps.

 

[hastalavista]

I think the USPAP issues regarding Ethics is a bit muddy... although I'd be a fool to argue things USPAP with Danny! So I'd factor in his comments significantly.

I'm more concerned with the appraiser who has a client and part of that engagement agreement (maybe read once) includes the requirement to address reconsiderations as it is part of the assignment requirements. If such a provision exists, and an appraiser insisted that they be paid for that or not do it, then I would see that as a USPAP violation.

ResGuy (and others) say this works for them. I have little doubt ResGuy (and others) has read any engagement agreement he is subject to. Prudence would require that any other appraiser taking this stance should do the same (read their entire engagement agreement they are subject-to. That may be a 30+ page document on the client's or AMCs website).

 

[DWiley]

Last I heard, the lender chooses the subject, the appraiser chooses the comps.

And? Last I heard there is a federal law that says that parties associated with a transaction can ask the appraiser to consider alternative sales. It is still the appraiser who chooses to use those sales or not.

You are saying that you charge, contingent on your analysis of them. That is the key issue of the last few posts, but you dodged that issue quite well.

 

[residentialguy]

In the arrangement you suggest, is the appraiser not motivated to find a reason to discredit all alternate sales,

No, just the opposite. The appraiser certifies what???


Therefore, not using the best comps, especially when the lender knows of them, means the end of his/her career because they produced a willful misleading report. So the appraiser is motivated to thoroughly analysis them and use them.

 

[DWiley]

I think the USPAP issues regarding Ethics is a bit muddy... although I'd be a fool to argue things USPAP with Danny! So I'd factor in his comments significantly.

I'm more concerned with the appraiser who has a client and part of that engagement agreement (maybe read once) includes the requirement to address reconsiderations as it is part of the assignment requirements. If such a provision exists, and an appraiser insisted that they be paid for that or not do it, then I would see that as a USPAP violation.

ResGuy (and others) say this works for them. I have little doubt ResGuy (and others) has read any engagement agreement he is subject to. Prudence would require that any other appraiser taking this stance should do the same (read their entire engagement agreement they are subject-to. That may be a 30+ page document on the client's or AMCs website).

My biggest concern is the motivation such an arrangement provides to an appraiser. Suppose a lender/borrower/agent could provide three sales that were objectively superior to any of the sales that the appraiser used. Does the appraiser admit to missing such sales, collect $0, and open the door for a possible allegation of an error of omission? Or, is it more likely that the appraiser finds some reason to "discredit" the sales and then sends a bill for $225? The goal in the USPAP ETHICS RULE is to avoid arrangements that reward unwanted behavior.