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Update for other than original client.

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Robert L. Ripp SRA

Freshman Member
Joined
Oct 11, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Lender B has appraisal and letter of transfer from my original client, Lender A. Lender B requesting update of appraisal. USPAP states an update can only be prepared for original client. Does letter of transfer from lender A to lender B allow for update to be prepared for lender B and comply with USPAP?
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
In my opinion--no. Because Option 3 of AO-3 specifically states original appraiser's firm and original intended users have to be involved. You could do an Option 2, a new report like a 2055 with the original 1004 or 2055 attached and incorporated. Or just do Option 1, a new report--maybe a 2055 exterior versus the original 1004 or 2055 interior. Then the original client doesn't have to be involved (that letter of transfer solves the confidentiality problem and gives you a clearance to forge onward for the new client). You would go look at the subject on the new date, take new photos, add some new recent comparables (if there are any), clone the information from the old report of items that have not changed, and then it becomes your business decision on your part (not the client) of if your fee is discounted or not. To me, in this situation, Option 1 appears to be the simpler, easier way to handle the new client's request. Option 2 becomes kinda convoluted.

Check out Fannie Mae guidelines Section 201, Age of Appraisal, which requires an observation of the property on the new effective date and knowledge of current market conditions (looking for and at new comparables).
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
According to the new standards comments being circulated, this is a new report for a new client and prepare the report accordingly. You should have a new date and inspection and possibly comparables depending on how long ago it was done.

Roger
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I have just re-read your original questions and my jump to a conclusion answer. I should have said the no would have applied if you were wondering if you could do the Option 3 of Advisory Opinion 3. But the answer is yes if your were completing either Option 1 or 2.
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
8)

R Strahan has it right :D According to the 2003 USPAP, as well as comments from the Chairman of the ASB, and others, et al, the "Appraisal" is the intelectual property of the appraiser who performed the appraisal. The "report" belongs to the client the report was done for, based on the appraisal. If a new client(even an hour after the first client gets the report, or sooner, on anytime thereafter) wants a new report based on a new assignment, the appraiser who owns the appraisal, is free to provide the new client(or clients) with a new report, based on the appraiser owned appraisal. One should be careful to not break the confidentiality relationship with any client, and to comply with USPAP, but you are free to do a report for any client based on what belongs to you the appraiser. And.........do I dare say it :?: It's ok to get paid for the new assignment :D

Don Clark
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Don:

Agreeed on all other points bbbbut Please pass on your opinion:

.... you should have a new...{snip}... inspection and possibly comparables

IS a new inspection required?

This is still a VERY grey area to me!
I have heard arguements to the effect that reinspecting the property is not (exactly) required?!?!
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
8)

There is no requirement in USPAP to inspect or reinspect any property. How else could one do a desk top appraisal and not view or inspect the subject or comps? No where in USPAP is there such a requirement. So as to limit my liability I will see if it is still standing, but that is a personal issue. Not a USPAP requirement.

Don
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Don:
I should have been more specific:

IF generating a new 1004 form is a second insection and therfore effective date required?

Edited; I meant NEW effective date!
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
IS a new inspection required?

This is still a VERY grey area to me!

If the value date is the original, then no. If the value date changes, new appraisal, new inspection (at least I want to know it is still there.) Example? I turned in an appraisal the morning after it torched to the ground. I found out later that day. I went back and requested the report back, but the borrower had came in and paid for the report, promptly sold it to the seller for a profit...who kept it out of the hands of the insurance company who suspected arson (or as we refer to locally - Oklahoma lightning), and of course, yours truly got put on notice to go testify as I could not and would not give up confidential information to the insurance company. They settled.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
No new inspection is required even if the value date changes.

You simply state in the report that you collected data from the property on x date and all photos are from that that date. You state that the Extraordinary Assumption applies that nothing has changed that would effect value between the x date visit and the date of the value of the present report.

But back to the original question: This cannot be an update. It must be considered a new assignment for a new client. Updates can only be done for the original client.
 
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