Significant Appraisal Assistance (1004p)

[J Grant]

Yes, I'm forming opinions based on my physical observations. But as with the desktops I've done for non lending work (which sound to be similar tot he 1004p - I use the GPAR form in Total which looks pretty similar to the 1004 by Fannie) I'm relying on MLS/client provided photos and County/MLS/Client provided sketch/GLA

Our MLS here (I believe you have the same on the other coast - MFRMLS) allows agents to have up to 50 pics of a property. That's a lot of pics for a 1,400 sf ranch (and yes, they sometimes utilize all 50 pics for such a property!) I can pretty much get a decent "observation" of what the property is like without actually inspecting it
again, I'm going to stick by my prior comments on this and say it's about the fee(s)

For $300-400+/ report, I would have no problem doing 1004p's (and obviously that would depend on the property - there are plenty of private/non lending properties I do NOT offer a desktop option, although, yes, in theory, it is still possible to complete that appraisal - I just don't want to take that liability - business decision)

Since you want to make it all about fees,-I am working on assumption the clients who pay good fees now for 1004 will pay good fees for 1004P, the clients who offer mediocre fees for 1004 will offer mediocre fees for 1004P, and the clients who pay low fees for 1004 will pay low fees for 1004P.

But this thread was not about fees, it was about USPAP verbiage to be clarified to require disclosing significant appraisal assistance when a party does an inspection of the subject for appraisal purpose and appraisal will rely on the inspection for results.

Do you think USPAP should require that disclosure?

Do you think the stakeholders should be allowed to label an inspection as "data collection". in order to pass off a non appraiser inspecting as not engaging in appraiser practice? Why do you think they are taking such pains to call it that? If they are going to call it that, then call it that on the form and call it that when make an appointment ." Hello, I want to make an appointment to do data collection on your property. " They won;t say that, they will say they want to set up an inspection appointment for the apprasial . As misleading as possible so contact person wont really tell the difference. Want to bet on it?

 

[J Grant]

Yes, I'm forming opinions based on my physical observations. But as with the desktops I've done for non lending work (which sound to be similar tot he 1004p - I use the GPAR form in Total which looks pretty similar to the 1004 by Fannie) I'm relying on MLS/client provided photos and County/MLS/Client provided sketch/GLA

Our MLS here (I believe you have the same on the other coast - MFRMLS) allows agents to have up to 50 pics of a property. That's a lot of pics for a 1,400 sf ranch (and yes, they sometimes utilize all 50 pics for such a property!) I can pretty much get a decent "observation" of what the property is like without actually inspecting it
again, I'm going to stick by my prior comments on this and say it's about the fee(s)

For $300-400+/ report, I would have no problem doing 1004p's (and obviously that would depend on the property - there are plenty of private/non lending properties I do NOT offer a desktop option, although, yes, in theory, it is still possible to complete that appraisal - I just don't want to take that liability - business decision)

Since you want to make it all about fees, the fees you list sound unrealistic for the work but would be nice. Will see what happens with fee aspect of it. I am working on assumption the clients who pay good fees now for 1004 will pay good fees for 1004P, the e clients who offer mediocre fees for 1004 will offer mediocre fees for 1004P, and the clients who pay low fees for 1004 will pay low fees for 1004P.

But this thread was not about fees, it was about USPAP verbiage to be clarified to require disclosing significant appraisal assistance when a party does an inspection of the subject for appraisal purpose and appraisal will rely on the inspection for results.

Do you think USPAP should require that disclosure?

Do you think the stakeholders should be allowed to label an inspection as "data collection". in order to pass off a non appraiser inspecting as not engaging in appraiser practice? Why do you think they are taking such pains to call it that? If they are going to call it that, they shoudl never use the word inspection than becuase that is misleading.

The third party calls for appointment: " Hello, I want to make an appointment to do data collection on your house. " Huh ? The confused party says..

I bet it will be: "Hello, I want to make an appointment for the inspection for appraisal on the property" The folks behind this will the term inspection when it suits them ( misleading) but use the term data collection at other times to evade disclosures..

 

[J Grant]

Our MLS here (I believe you have the same on the other coast - MFRMLS) allows agents to have up to 50 pics of a property. That's a lot of pics for a 1,400 sf ranch (and yes, they sometimes utilize all 50 pics for such a property!) I can pretty much get a decent "observation" of what the property is like without actually inspecting it

Yes listings on MLS can have extensive photos . Assume the data collector provides the same-I've found though that even with very good photos, my in person observations can differ from what I thought just from seeing the photos. But maybe soon none of it will matter, it will all be rough guesses since we never go there and if everyone else is fine with that then I will be too, an easy job doing segments of a report if we are wrong so what not our fault we never saw it!

 

[Dale Floyd]

Hmmmm…. I think I'm beginning to understand the theory of some....

Question: Can a third party do the physical inspection for an appraisal?
Answer: Doesn't matter. But it is in the best interest of an appraiser to refrain from inspections, because doing so increases their actual liability for the inspection data. (It's not about a credible report - it's all about fast, cheap, and how the appraiser can escape liability.)

Question: Should an appraiser disclose assistance by third party inspectors?
Answer: Doesn't matter. But since a loophole exists in USPAP, appraisers can disregard disclosure if non-appraisers are used. Might be better to use non-appraisers for that reason, rather than other licensed appraisers or trainees. And seriously, nobody should assume the professional employed to deliver an opinion of value for property should actually see it. (It's not about responsibility - it's all about fast, cheap, and how the appraiser can escape liability.)

Question: What if a reader finds an appraisal report to be bogus because of invalid third party inspection information?
Answer: Doesn't matter. And thankfully, the appraiser isn't liable since he/she didn't do it. Everybody should know that the appraiser's role should be at the desk and not wasting time gathering physical information. I believe it was CC's representative who said something along those lines to a congressional committee a few months back. (It's not about integrity - it's all about fast, cheap, and how the appraiser can escape liability.)

Yes - All of that is snarky, but some should listen to what they are saying and suggesting.

I truly believe that the products offered by the appraiser, should have meaning. We are not AVM's or BPO's, but it sure feels like several would like us to be reduced to those things.

 

[bnmappraisal]

JG, there are so many hypotheticals as far as the "data collection" or "inspection" side of it and what MAY/MAY NOT happen when they call to set appt ... IDK so I won't even bother trying to guess how it will play out

But you did ask me my opinion so I will answer your question here below

But this thread was not about fees, it was about USPAP verbiage to be clarified to require disclosing significant appraisal assistance when a party does an inspection of the subject for appraisal purpose and appraisal will rely on the inspection for results.

Do you think USPAP should require that disclosure?

As far as USPAP, my opinion, yes, this product is fine because USPAP does not require an inspection be made by the CERT/LIC appraiser.
As far as disclosure? I think any appraiser who doesn't disclose where the info came from (i.e. third party inspector, etc) would not be making a wise business decision, but ... it's their license
I clearly state in my SOW comments on desktops where I obtained the info for my conclusions and would expect any appraiser doing a 1004p (myself included) to do the same
But again, that's a business decision

Do you think the stakeholders should be allowed to label an inspection as "data collection". in order to pass off a non appraiser inspecting as not engaging in appraiser practice? Why do you think they are taking such pains to call it that? If they are going to call it that, they shoudl never use the word inspection than becuase that is misleading.

That's something you have to take up with them!

 

[bnmappraisal]

I truly believe that the products offered by the appraiser, should have meaning. We are not AVM's or BPO's, but it sure feels like several would like us to be reduced to those things.

Dale, I like your comment.

You are right, we are not AVMs or BPOs or ...

(my bold above) And that's why I'm not against these 1004p's or other "non appraiser inspect" products except for the FEE(s)

I don't offer every private/non lender client a desktop option, but sometimes it's very accommodating for both parties and/or (and more importantly!) the client
IMO, we appraisers, especially in the RES world, have to remember there are a lot of appraisal problems that need to be solved and to do so doesn't always require an inspection

 

[George Hatch]

Everyone here who actually thinks the SOW should be the same for every assignment and should not be subject to adjustment based on user expectations being different for some situations than for others would fail the course. Regardless of how many times they took it.

 

[Raven59]

we appraisers...have to remember there are a lot of appraisal problems that need to be solved and to do so doesn't always require an inspection

 

[glenn walker]

Lol RE agents sure can come up with a very different set of "facts" about a property than appraisers do! Expcept for the basics, ( a ranch vs 2 story, and sometimes even that is screwed up if it is a partial below grade ) outside of that, one could almost think it was a different property sometimes.

Condo has an ocean view ! Really? If you stand on one corner of the balcony with binoculars...house has 4 bedrooms ( one is a nook with no window ) etc...and they exclude /ignore any facts that are adverse- the lot backing up to a dump , the roof near end of economic life. Can they be trained to overcome years of biased reporting of facts on inspections.? Maybe some can and others may not. Since we don;t choose who inspects, we simply will not know

CAN THEY BE TRAINED TO OVERCOME YEARS OF BIASED REPORTING OF FACTS ON INSPECTIONS ? As both an-appraiser and a licensed broker since 1984 who previously trained and owned real estate offices we have to understand not only is the training different but Realtors and Sales people are typically not hard wired like appraisers. In general appraisers by nature see the glass as half empty where the Realtor sees it as half full but then reports it as 3/4 full. Also Realtors think appraisers are weirdos who's only objective is to nit pick and make major issues out of minor things. So this issue is way more complex then simple training and even a brand new agent with no training or bias is wired to automatically emphasize the positives and many look through rose colored glasses. The appraiser reports the house as a single story ranch featuring three bedrooms and two baths all located on a 10,000 Sq.Ft. rectangular shaped lot with a residential street view but rates it as "adverse " under location because it backs up to a diary farm that smells like manure.

The Realtor legitimately sees that same home as a single story that includes four bedrooms because she knows that even though that tiny 6' X 7' nook has no window someones kid can still sleep in it and yes the roof is ugly but it's just old and with a hammer and a few new shingles that bad-boy is good for another 5 to 10 years. The location has a wonderful country feel to it because it backs up to that Century Old Dairy Farm where the new owners can have summer barbecues in the backyard while the children can watch 300 beautiful jersey cows and don't forget the dairy farm has monthly hay rides for the kids of the community to enjoy. So bottom line location is superior to homes with no view of dairy.

Answer : Hate to admit it but in most case's no amount of training can change most Realtors mindset and the way we trained them -So instead of using Realtors these lenders should consider engaging home inspectors or other people to measure take photos-describe location and then report any positives or negatives they observed. They would not do a time consuming in depth home inspection but a limited visual observation and with this information the appraiser would at least have a fighting chance of arriving at a reasonable and supportable opinion of market value. On second thought why not just engage appraiser trainees not require a supervisory appraisers signature on the inspection portion rule it as NOT being significant assistance and let them make some money but also get credit towards their required work experience to get their full license - A win-win for trainees and appraisers

 

[J Grant]

Ok, perhaps there is a potential optimistic side...)

Assuming appraisers will also be doing the inspections and it won't all go to RE agents/ethos, it might be a more diverse field if appraisers who like inspecting mainly do inspections, those that like desk work or have physical limitations mainly do that, and the appraiser that like the whole do more of the 1004 and FHA and complex thrown in.

Imo one of the big impediments to successful adaptation as a workable product will be turn time.

If an appraiser does the inspection do they have to be named as significant appraisal assistance because they are a licensed appraiser, or not so named if their task is limited to "data collection?"