Scope of Work question

[DWiley]

I think appraisers and reviewers sometimes fail to recognize that the appraiser's scope of work is communicated in bits and pieces throughout the report.

For example, in the adjustment grid on a Fannie Mae form one must state the data sources used. This is communicating about the scope of work. When I cite "Courthouse Retrieval System" as a data source I am telling the reader that my scope of work included consulting that source for that comp.

It is virtually impossible to fully communicate the scope of work in a signle section of the report.

With all that in mind, for form reports I add some additional scope of work comments, but they are not extensive. I think the pre-printed text and other items in my form reports are almost adequate to summarize the scope of work performed.

 

[Lawrence R.]

In a sue happy world.

I think sticking with the FNMA preprinted summary is best. I surely wouldn't want to use a word like I analyzed something where I should have said reported and end up in a legal mess!!:new_2gunsfiring_v1:

Anything out of the ordinary would require additional comments, but I may not label it as a SOW addendum, it would just find its way into the appropriate section of the report.

Commenting that you came up with your land value for the CA by land sales comparison isn't in an addendum, but it clearly summarizes what you did.

I do agree with those who say the SOW isn't negotiated properly up front. Often, when I try to discuss it, there is a long silence over the phone...then a well, just do what everyone else does!!

Thank God I haven't taken THAT advice.

Or I just get--well, do whatever is good enough for Fannie, that is where this one is headed eventually.

So in those cases, I just stick to what is on the form, which is probably 85% of my work anyway. To me, USPAP still dictates most of the SOW for the reports I complete.

 

[Mark to market]

I expand the scope for clarity, credibility and cover.

Would not leave home without it.

 

[CURT VAN HOOSER]

I agree with Mark but on a case by case, as needed, basis. I personally find it a bit annoying to review a report in which the comments section on the first three pages of the URAR are blank, with exception of the phrase, "see addendum." Then, I get to the addendum (if the appraiser remembered to include it), and the comments would have easily fit in the space provided. I wonder why that is....?

 

[Couch Potato]

I do agree with those who say the SOW isn't negotiated properly up front. Often, when I try to discuss it, there is a long silence over the phone...then a well, just do what everyone else does!!

Thank God I haven't taken THAT advice.

Or I just get--well, do whatever is good enough for Fannie, that is where this one is headed eventually.

So in those cases, I just stick to what is on the form, which is probably 85% of my work anyway. To me, USPAP still dictates most of the SOW for the reports I complete.

In a typical discussion I have with a client on scope of work the client simple says "Yes" when I ask if they want a typical residential appraisal done to Fannie Mae standards reported on form 10XX, and then says "No" when I ask if they have any special requirements. (Alternatively they tell me they need interior photos, the cost approach, etc. as an answer to question two.) Most of the time that is sufficient discussion. With those answers in writing, I now have the needed basis on which to demand more money for work beyond what is needed to meet Fannie's standards, such as that call two weeks later asking for the cost approach on the 50 year old house.

Don't waste time waiting for the client to tell you what to do, ask straight up if "good enough for Fannie" is what they want. That is typically what is needed. Once you get that answer and confirm there is no other requirement you are good to go. You now have a reasonable basis for claiming you finished the report. You can then charge for that extra analysis of the 5 "comps" they send over, or adding the cost approach. That little "yes" and "no" are very empowering.

 

[Lawrence R.]

Good advice CP, I pretty much do that, it is just sort of the natural discussion, or I may say, is this condo being done to the same specs as the last one? You just can't come right out and ask for a SOW, you are so right.

Of course, if the lender is identified, then you MUST find out what their additional requirements are, (eg. interior photos, etc..) if it is MB work, especially. I find it ironic that AMCs probably spell out the clearest SOW of any client, and are the least likely ones to adhere to it.

 

[Richard Carlsen]

The SOW in the FNMA form is acknowledgment of the minimum the appraiser has done. Specific items do not have to be written in a separate paragraph labeled SOW. You define the SOW when you make statements such as "All areas of the site were not viewed." and "The crawl space was viewed from the access port only." These descriptions of what you did to gather the data you have in the report are sufficient to define the SOW for the assignment.
I tried a detailed SOW and still use one from time to time that has been modified and shortened. The problem is that such lengthy epistles are often misleading in that the appraiser seldom does exactly the same thing in gathering data on different houses so the canned SOW is no better than the canned neighborhood data for all houses in a market.

 

[Ray Miller]

My additional scope of work is about 2 pages in length and can change with each appraisal from the get go to fit the needs of the subject property.

I have a scope of work for my RE appraisal, my PP, my Equine and Livestock Appraisals. I want the person that ordered the appraisal to know just what it covers and the scope of my work.

I also used an engagement letter and fee agreement letter that also includes the scope of work addendum with all appraisals. These must be signed now before work even starts. This leaves no miss understanding of the scope of work, the fees charged. On small assignments it is CAD or larger assignments it is a % down and balance due at time of delivery.

 

[Lawrence R.]

By the way.

Does anybody use that SOW generator I have seen advertised?

I would love to hear a testimonial...

 

[Jo Ann Meyer Stratton]

I have a Scope of Work statement on page 3 above the Cost Approach. Then through out the form I have more details about exactly what I did or didn't do. At the beginning of each blank on the form I have See attached Expanded Comment Section. Then in paragraphs with the same headings that are on the form--I go into detail about the subject property. If the section of the form could be expanded those detailed comments about the subject would be on the form except--but they aren't--so I have expanded the form myself.