Revision Request

[DWiley]

No, just the opposite. The appraiser certifies what???
View attachment 35236

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.

Well, if everyone acted as purely as you suggest, there would be no need for an ETHICS RULE at all.

 

[residentialguy]

Last I heard there is a federal law that says that parties associated with a transaction can ask the appraiser to consider alternative sales.

lol...you mean D-F.... that law that says the lender can not pressure for value? Do you really think that's an exception to the law where they can throw irrelevant comps at them strictly because of their price??? or should they be in line with the law and give them comps that are good relevant comps that are better indicators of value than the ones the appraisers used? FNMA knows; comps their CU suggests must be analysed before you present them to the appraiser. I suggest you take their approach. Ignorance is not a defense.

Well, if everyone acted as purely as you suggest, there would be no need for an ETHICS RULE at all.

No, again the opposite. It's the motivator for the appraiser to analyse them and use them and not to ignore them....just as D-F is a motivator to analyse the sales prior to suggesting the appraiser to consider them so that they are not just sent over for their higher selling price.

 

[hastalavista]

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.

Yes. In that situation, the appraiser would be hung by their board.

I don't endorse what ResGuy does for lender work (and he knows that). I don't endorse it because:
1. It is my opinion that ROVs are part of the assignment-expectations
2. It is my opinion that one cannot enforce it on the client if the client didn't pre-agree
3. It may be a violation for sure (my opinion) if addressing ROVs is in the master engagement agreement
4. And, you raise the scenario where I believe an appraiser would be hung if a complaint were filed

Naturally, ROV requests have their limits. The process I use (identifying my competitive market set and the criteria I use to select comparables) will filter out any non-comparables (assuming I've collected all my comparables from the identified market area). It takes about 2 minutes to state that and address the ROV. Likewise, since I have a list of all properties that were collected in my 1004MC search (in the report), if the sale is already there, presumably I've considered it and rejected it for whatever reason. I'll state that. If I missed something, then I'll re-analyze. But I won't just say, "pay me or else."
I'll give any lending client one bite at the apple without much ado. I don't get a lot of ROVs (I can think of only one in the last 4 years; and it caused me to change my opinion). More bites, then I'm going to tell them it is becoming unreasonable and their data is not superior to what was considered in the report.
I charge more than most and the fee for an ROV (as infrequent as they are) is baked into that cake. I cannot recall a scenario where I thought a lender was abusing the process; whether it made me change my position or not. Certainly, if I had a client that regularly stepped overboard (as I perceive it) I'd add that to the fee or, more likely, stop doing business with that client.

It is a risky course. This doesn't have anything to do with getting paid for the work one does (I'm all for that). It has everything to do with the concerns I've raised and you've added to. It might work out for one appraiser, and cost another appraiser dearly.

 

[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

This is pretty good. A HOF post if there ever was one. First there is a claim that there is no contingency, followed by an explanation of the contingency.

Yes. In that situation, the appraiser would be hung by their board.

I don't endorse what ResGuy does for lender work (and he knows that). I don't endorse it because:
1. It is my opinion that ROVs are part of the assignment-expectations
2. It is my opinion that one cannot enforce it on the client if the client didn't pre-agree
3. It may be a violation for sure (my opinion) if addressing ROVs is in the master engagement agreement
4. And, you raise the scenario where I believe an appraiser would be hung if a complaint were filed

Naturally, ROV requests have their limits. The process I use (identifying my competitive market set and the criteria I use to select comparables) will filter out any non-comparables (assuming I've collected all my comparables from the identified market area). It takes about 2 minutes to state that and address the ROV. Likewise, since I have a list of all properties that were collected in my 1004MC search (in the report), if the sale is already there, presumably I've considered it and rejected it for whatever reason. I'll state that. If I missed something, then I'll re-analyze. But I won't just say, "pay me or else."
I'll give any lending client one bite at the apple without much ado. I don't get a lot of ROVs (I can think of only one in the last 4 years; and it caused me to change my opinion). More bites, then I'm going to tell them it is becoming unreasonable and their data is not superior to what was considered in the report.
I charge more than most and the fee for an ROV (as infrequent as they are) is baked into that cake. I cannot recall a scenario where I thought a lender was abusing the process; whether it made me change my position or not. Certainly, if I had a client that regularly stepped overboard (as I perceive it) I'd add that to the fee or, more likely, stop doing business with that client.

It is a risky course. This doesn't have anything to do with getting paid for the work one does (I'm all for that). It has everything to do with the concerns I've raised and you've added to. It might work out for one appraiser, and cost another appraiser dearly.

Nice synopsis. Drop the mic.

 

[DWiley]

lol...you mean D-F.... that law that says the lender can not pressure for value? Do you really think that's an exception to the law where they can throw irrelevant comps at them strictly because of their price??? or should they be in line with the law and give them comps that are good relevant comps that are better indicators of value than the ones the appraisers used? FNMA knows; comps their CU suggests must be analysed before you present them to the appraiser. I suggest you take their approach. Ignorance is not a defense.

Yes, the very law that prohibits pressure also allows parties to ask appraisers to address alternative sales. You and I may not like that, but it is what the law says.

 

[residentialguy]

Yes. In that situation, the appraiser would be hung by their board.

I don't endorse what ResGuy does for lender work (and he knows that). I don't endorse it because:
1. It is my opinion that ROVs are part of the assignment-expectations
2. It is my opinion that one cannot enforce it on the client if the client didn't pre-agree
3. It may be a violation for sure (my opinion) if addressing ROVs is in the master engagement agreement
4. And, you raise the scenario where I believe an appraiser would be hung if a complaint were filed

I have no problem with ROVs...as long as they comply with the law. As you said, "ROV requests have their limits". They need to comply with the law...and sending over irrelevant sales that an agent gives them strictly because of their higher price points, sorry, but they have just exceeded their limits.

It takes about 2 minutes to state that and address the ROV.

I'm sorry my friend, that's fool's view. The lender/agent/borrower have their hand in this and you make a mistake on these, expect to find yourself in court. How many times have you gone out to the comp to find a different scenario then what the listing portrayed? How many times have you verified with the party of those transactions to find a different scenario then what the listing portrayed? How many times have you verified with County docs of those transactions to find a different scenario then what the listing portrayed? If they're going to hand deliver these sales to you saying they are better, you better damn well make sure that's not the case before you respond with your 2 minute response. It's one thing to miss a sale on an MLS search...it's another to be presented sales saying you need to look at these, we think they're better.

 

[residentialguy]

Yes, the very law that prohibits pressure also allows parties to ask appraisers to address alternative sales. You and I may not like that, but it is what the law says.

It says
Consider additional, appropriate property information, including the consideration of additional comparable properties.

If you think that submitting sales just because of their higher price to get the appraiser to raise their opinion of MV to hit a target is appropriate and not a pressure for value, then you should have no worry when appraisers start reporting you for value pressure. You may not like how they're going to rule on your twist of the ROV exception.

 

[hastalavista]

I'm sorry my friend, that's fool's view. The lender/agent/borrower have their hand in this and you make a mistake on these, expect to find yourself in court.

You are omitting the full context of my post.

The process I use (identifying my competitive market set and the criteria I use to select comparables) will filter out any non-comparables (assuming I've collected all my comparables from the identified market area). It takes about 2 minutes to state that and address the ROV.

In other words, it doesn't take long to reject sales that fall out of my defined search parameter. If they do not fit based on physical or locational characteristics, how deep do I have to dig? (Answer; not deep at all; in fact I don't even need a shovel). This is the 2-minute drill.

Likewise, since I have a list of all properties that were collected in my 1004MC search (in the report), if the sale is already there, presumably I've considered it and rejected it for whatever reason. I'll state that. If I missed something, then I'll re-analyze.

Ok, here is where it may take more than 2-minutes. But, again, if they are on my 1004MC list, that means that I've collected them and presumably considered them. If they are not in my grid, that means I didn't think they were superior to the ones included in my grid. I can explain why that is.
Now if I missed something, that's going to take longer. Otherwise, it is:
A. The sales you provided are not comparables; I've defined the comparable criteria and these clearly do not fall within it; or
B. The sales you provided have been considered; they are included in my 1004MC list. Here's why they are not better than the ones in the grid.....

 

[residentialguy]

Ok, here is where it may take more than 2-minutes. But, again, if they are on my 1004MC list, that means that I've collected them and presumably considered them. If they are not in my grid, that means I didn't think they were superior to the ones included in my grid.

So you've personally inspected these other comps and verified the conditions of sale and county records??? While on the surface, they may not look as viable of a comp. But we all know that can change upon inspection and verification. If they're going to hand these to me, I'm going to go to at least the same lengths I did with the comps that I used in my report...inspection, verification with the party, etc. Why? Because I could find out that this sale is better than the listing had portrayed it. If I just give it the "2 min" I already considered it and it's on my MC drill, but had I given it a closer look to find it actually is better and could have affected the results, the HO would have me hung in court. "Your Honor, The lender, the agent specifically presented these sales to him, and he just blew it off"

Thanks, but no thanks. I'm not trying to get quick cash with a 2 min reply. There's a lot of work that went on for that extra $75. Inspection, verification with the original transaction party, Map, Satellite, put it on the grid,...the same work I put into comp 1.

 

[hastalavista]

Res, I think you are being a bit over-the-top.

My report has the equivalent of a box in it: that "box" defines what I consider a comparable to be. If sales provided do not fit in that box, I do not consider them comparable. I don't have to drive-by them to do that. Takes as long to state that as it does to make this post.

But that's me!