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SFR Rental Survey

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ZZGAMAZZ

Thread Starter
Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
I've read the AF threads and also the USPAP standards that pertain to new assignments, but this issue is confusing:

Often times a client will order a rental survey after-the-fact, sometimes a day later while the original assignment is in progress, other times a month later.

Because the rental survey is integral to the original assignment--same client, same loan, same property--is this a new assignment?

The client inevitably requests the rental survey effective date to be the same date as the original report; if so does that make the rental survey a new assignment with a retroactive date? (The rental survey order is never so far in the future that retroactive data isn't available in my market.)

I think I understand the criticality of the "new assignment" standards but I'm not sure whether it really matters in this scenario.
 

Pat Butler

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
The USPAP Q&A for December addresses this exact issue- no it isn't an additional assignment according to the AF.

Doesn't make sense however when you actually read through USPAP where it certainly would appear to be a new assignment. They've always made a big issue of getting the assignment conditions fixed in cement at the beginning of the assignment. I think this is one of the many issues whereby USPAP is senseless, yet the AF tries to explain themselves out of the situation with a Q&A response.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
The USPAP Q&A for December addresses this exact issue- no it isn't an additional assignment according to the AF.

Doesn't make sense however when you actually read through USPAP where it certainly would appear to be a new assignment. They've always made a big issue of getting the assignment conditions fixed in cement at the beginning of the assignment. I think this is one of the many issues whereby USPAP is senseless, yet the AF tries to explain themselves out of the situation with a Q&A response.

Pat-

Your summary (in bold) is correct. However, I walked away with a slightly different read-
My interpretation prior to the AF's clarification is that it was a separate assignment. However, now I interpret it as it could be a separate assignment if the appraiser decides to handle it that way. Or, it could be considered part of the original (appraiser's choice). The logic of my position is this:
If it is part of the original assignment, then it could be interpreted that I am required to complete it as part of my acceptance of the original assignment. Now, in most cases, I will complete it. However, for many legitimate reasons, it may be that I won't complete it (or, cannot given my client's time-line).
If I treat it as a separate assignment, then I can accept or decline it at will; no obligation to complete it under the interpretation that it is part of the original assignment.

For ZZ's scenario, I think the AF's opinion has a practical consequence (and one which makes sense to me): If you get this type of request, you can consider it part of the original assignment and don't have to go through the full "new assignment" process of SOW, etc.
However and again, I see nothing in the AF's opinion that prohibits the appraiser from considering the request a new assignment.

I'd be interested in hearing from the USPAP experts on this one? :new_smile-l:
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
If the request for additional services comes after a prior assignment was completed then how can it be anything other than a new assignment? Perhaps the confusion comes in the manner in which the rental analysis assignment is delivered to the client. In some cases it could be attached to the appraisal report or it could just as easily be sent as a stand-alone report. In either case it is a new assignment.

What difference does it make? The rental survey form has a place where you can enter the date of date of the data collection and the date of the opinion.
 

Pat Butler

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I missed the part where he made of already completed the first assignment and that the client could have made this request a month later. Yeah, in that case it would be a new assignment. All depends on when the request comes in- during the development of the appraisal or after when it's done.
 
H

Hall McClenahan

Guest
Just my take.

Let me see if I can bring up an old question asked a million time before in a new way? :laugh:

If the Income approach is applicable to the assignment and the client did not ask for it does that mean you don't have to complete it per USPAP.

Departure is gone, scope of work is the rule, however........ the following traps are present.

Scope of work acceptability.

Standards rule 1-4c

If you completed it because rental properties were common in the area but did not include it in the original transmission because the client did not ask for it. The original question is has been answered. No, it is not a new assignment only a request for the additional information you were required to perform at the time of original assignment. Charge for the additional work involved in transmitting the results of your research.

If you scoped it away because it was not in the original request, are you in violation of 1-4c or the nice little comment section of the acceptability section? Will disclosure of the fact that the income approach was not requested in the original assignment relieve you of the responsibility to research the applicable information.

"An appraiser must be prepared to support the decision to exclude any investigation, information, method, or technique that would appear relevant to the client, another intended user, or the appraiser's peers. "

Does "because they did not ask for it." work for everybody?

How does that apply to Desk tops and Comp-checks?

It gets ugly when we take shortcuts. But hey $98.00 for a 1004 turned in 4 hours you have to do something right? :rof:
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
The loan program has changed and the applicant needs to qualify with a renter in place. The lender needs to qualify the applicant with a market rent to support the new debt service. I would consider the assignment an extension of the originally assignment, but with a statement in the report the income approach is not reliable for a single-family home.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
The loan program has changed and the applicant needs to qualify with a renter in place. The lender needs to qualify the applicant with a market rent to support the new debt service. I would consider the assignment an extension of the originally assignment, but with a statement in the report the income approach is not reliable for a single-family home.
Kevin has the right take on this.

This happens when the LO or MB tries to put the buyer into an owner occupied loan when in fact the owner is buying it as an investor with the intent to rent out the home. After the appraisal was ordered or after the appraisal is turned in, some smart underwriter is doing their job and sniffs out occupancy fraud. Oh! We need a 1007 rent survey and a 216 operating income statement, along with that SFR 1004 for the loan package.

If the new order for the rent survey comes in after the inspection has been completed on the 1004, I do the 1007 and 216 separately with their respective effective dates. Of course, I charge accordingly for the additional work.
 

ZZGAMAZZ

Thread Starter
Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
It gets better:

The original assignment about 1 month ago was for a re-finance. The house was vacant with no utilities and my report reflected those circumstances.

When I received the rental survey assignment on Friday I asked for a lease, figuring I would stop the nonsense before I wasted time on the new assignment.

The client subsequently faxed a 2-year lease in mid-progress--with the $1,800 monthly rent to be paid in cash...in case I asked for proof ??????

Today I receive an e-mail reminding me to change the 1004 from "vacant" to "tenant" occupied because of the lease (lol).

While searching MLS for comps I notice that the subject is currently listed for lease, as vacant, for $1,495 a month.

The previous posts concerning mortgage fraud seem awfully pertinent in this assignment !!!!!!!!!
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
It gets better:

The original assignment about 1 month ago was for a re-finance. The house was vacant with no utilities and my report reflected those circumstances.

When I received the rental survey assignment on Friday I asked for a lease, figuring I would stop the nonsense before I wasted time on the new assignment.

The client subsequently faxed a 2-year lease in mid-progress--with the $1,800 monthly rent to be paid in cash...in case I asked for proof ??????

Today I receive an e-mail reminding me to change the 1004 from "vacant" to "tenant" occupied because of the lease (lol).

While searching MLS for comps I notice that the subject is currently listed for lease, as vacant, for $1,495 a month.

The previous posts concerning mortgage fraud seem awfully pertinent in this assignment !!!!!!!!!


Advise your client of what you are now aware and the "new" request may suddendly go away.
 
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