Used the wrong form now what?

[Terrel L. Shields]

It depends on how the report has been modified to fit the use.

A lot of work when using the right form is better

but the definition of value is the same

not exactly... you should be using a "fair market value" when dealing with estates.

It also should have also been put on a restricted general form.

Not necessarily. IRS requires an appraisal summary for gifting.

 

[sputnam]

What happens if someone uses the URAR 1004 form for private work, but clearly states intention for "Estate Valuation" or "Divorce Proceedings" multiple times in the report and Lender is N/A. I have read earlier threads, just now, that state that this in unacceptable. All information in report is accurate, just used the wrong form. Have other appraisers used the URAR form for private appraisals? Does anyone have any experience using them successfully for private work? FYI I did look for other forms, there are many, but did not think that using a modified URAR was inappropriate. I feel terrible by the way, so please be gentle in your replies. Yes, going forward I will use a general residential form and my next CE class will be related to this topic. Now what?

Probably nothing. It is always better to use the GP form for non-lending work... but, if you did use the 1004... don't sweat it. If someone does complain. Own it and fix it quickly. USPAP is silent about forms... no worries there. The violation, if there is one, usually happens because of the certifications are are built into the GSE forms.

 

[alebrewer]

As stated by several on here - you're not the first, nor will you be the last. I'm sure the 2055 is the 'go to' form for a lot of folks whose SOW includes exterior only inspection. I'm not even sure I'd be that worried about making sure your client gets an 'updated' GP report. The GSE's just have some specific reporting requirements above and beyond what is required in USPAP. As long as you did what you said you did, you should be fine.

 

[Terrel L. Shields]

As long as you did what you said you did, you should be fine.

The central problem is the certifications and definition of "Fair Market Value"

 

[alebrewer]

The central problem is the certifications and definition of "Fair Market Value"

I didn't see a post where he stated that the client provided the definition of value to be used? Assuming everyone is ok with using the GSE's definition, I don't think that would be a problem 'on it's face'. That said, using the 1004 for 'estate valuation' (IMO) is a lot less disastrous than if you're going to face an antagonistic attorney.

 

[Terrel L. Shields]

assuming everyone is ok with using the GSE's definition, I don't think that would be a problem 'on it's face'.

They are not. FNMA has explicit language in the form inappropriate for non-lender work.

And the IRS recognizes "Fair Market Value" not "Market Value". So, while it is possible to use MV, FMV is the IRS standard and this certainly applies to the gifting issues more so than the cost bump up issues...which are for the internal use of the heirs..

 

[alebrewer]

They are not. FNMA has explicit language in the form inappropriate for non-lender work.

That's on them for not specifying that in the SOW decision, then. Unless the OP missed that part of the engagement letter...

 

[Zoe]

That's on them for not specifying that in the SOW decision, then. Unless the OP missed that part of the engagement letter...

If you are dealing with an estate, the IRS is almost always relative. You have no idea what the estate will do with the appraisal. GSE is not the client. Lender is not a client in this situation.

 

[Terrel L. Shields]

That's on them for not specifying that in the SOW decision, then. Unless the OP missed that part of the engagement letter...

These sections as an example are completely inappropriate for a private appraisal

 

[J Grant]

The top of page one of the URAR states the purpose is to provide the lender client ( with a summary appraisal)

The form identifies the client as a lender client , but for an estate/divorce that would not be the client.