137. DOES CHANGING THE SALE PRICE RESULT IN A NEW ASSIGNMENT?
Question: I recently completed an appraisal for mortgage financing purposes in a purchase
transaction and delivered the report to my client. My opinion of value did not
support the pending sale price. As a result, the purchase transaction was not
consummated. However, one week later the buyer and seller entered into a new
purchase agreement where the sale price coincided with my appraised value. My
client asked if I can provide a revised report that includes the analysis of the newly
agreed-upon sale price. To provide a revised appraisal report, must I consider the
client’s request as a new assignment?
Response: If the client does not require a more current effective date, USPAP would not mandate treating the
request as a new assignment. However, if the client does require a more current effective date, the
request must be treated as a new assignment.
In this example, regardless of whether the effective date is changed, the date of the report would
have to change to accurately reflect the appraiser’s consideration of the newly obtained agreement
of sale. Because the new purchase agreement was obtained after the date of the first report, the
revised report would need to have a date of report that is the same as or later than the date the new
purchase agreement was obtained by the appraiser.
In addition, the new report would also need to reflect the appraiser’s analysis of the prior
agreement of sale. In the development of an appraisal, an appraiser is required under Standards
Rule 1-1(b), to not commit a substantial error of omission or commission that significantly affects
an appraisal. Since information about the prior agreement of sale is known by the appraiser and
that information is relevant to the appraisal problem, it must be considered.
Additional related guidance may be found in Advisory Opinion 3, Update of a Prior Appraisal.
