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USPAP Causing Fee Increase on Reviews ?

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Joined
Jan 16, 2002
I'm a little slow on the up-take and finally got around to reading changes in Standard 3..........."an appraisal review that includes the reviewer's own opinion of value must be reported in a least a Summary Appraisal Report format"....hmm, sounds like a fee increase for reviews is in order. As of
Thursday AM all request for reviews will be same as full appraisal. Will let them all know up front when order is placed, as it can't be determined in advance. What say you ?
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
I say absolutely. You know, my market is rural here. But I have been charging full appraisal fee for reviews for two years.

It might be different if I had some good work to review but it is just not the case, and didn't have to truly perform a full appraisal.

A full appraisal is truly what they want............they just don't want to pay for it.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
My review fee has been same as full for over a year now.

Course, I don't get too many of them.

If you don't charge at least full rate, IMO, your harming yourself and all the rest of us. Reviews take a lot of work!
 

jtrotta

Senior Member
Joined
Jan 16, 2002
It's not only the work; it's the "RESPONSIBILITY" you have to accept once you put your name, even on the Review - your liability increase's dramatically.

We stopped duing Reviews about a year ago for that simple reason; if ya have enough work already, why would you want to tackle someone else's crapola; on top of which if ya git "Multi's" who wants ta do that stuff for any less than a typical Fee.

8)
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
... changes in Standard 3..........."an appraisal review that includes the reviewer's own opinion of value must be reported in a least a Summary Appraisal Report format"....

The State Board has not sent us out copy of USPAP yet and I have not taken the time to read on-line. So is it saying we have to do our own analysis and determine our own value even if we agree with the Appraisers value?

Just about to make some changes to my price sheet and sounds like this is one is going up too.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Today I received in the mail a document called The Summary Report from the Appraisal Foundation. It describes the changes to the 2003 USPAP.

Standard 3
What we did:
Several revisions to Standard 3 were adopted. The most significabt aspects of the revisions are:
Standard 3 will be inclusive of all appraisal disciplines------
An appraisal review that includes the reviewer's own opinion of value must be reported in at least a Summary Appraisal Report format.

Remove the requirement that the scope of work in an appraisal review match the scope of work in the appraisal under review (Complete or Limited).

Why we did it:
In the current and previous editions of USPAP, Standard 3 has been applicable to only the Real Property and Personal Property disciplines.----

The reporting requirement in SR 3-2(d) was revised to require a minimum level of a Summary Appraisal Report (or its equivalent in the various Standards) for the reviewer's report contenct. Previously, the format was required to match the report type of the appraisal report under review.

Addressing the case in which a reviewer develops his or own opinion of value, wording was added to clarify that the effective date of the reviewer's opinion of value may be the same or different from that in the work under review.

Finally, the language that required that the scope of work match the scope of work in the original appraisal was removed and replaced with a sentence that allows the reviewer to determine the appropriate scope of work.

Down load, if you don't have a copy of 2003 USPAP, Standard 3 from the Appraisal Foundation website for the 2003 USPAP.

For a typical Field Review Form 2000, it doesn't appear to me that there really isn't much change. When I am reviewing a URAR or a 2055, I am going through the same steps as the original appraiser (except for measuring and interior observation of the subject), checking taxes, zoning, lot sizeds, verifying comparable info, reviewing other comparables that might be applicable--then I write up the form 2000, attaching a Sales Comparison Grid, and develop my opinion of the quality of work and accuracy of data--which leads me to an opinion of value that is either the same as the original appraiser or different. The new Field Review Form 2000 that was issued several weeks ago by Fannie Mae incorporates a grid within the report. So after completing a form 2000, attaching whatever exhibits and addendums I think are applicable, the requirements of Standard 3 have been meet--and I have written a Summary Appraisal report. For 2-4 family properties, the grid, etc, will still have to be attached, as well as current USPAP requirements to the 1989 Field Review 2000 form.

So at this point (unless I learn differently), my procedures won't be any different in 2003 than they have been in the past. I just have to nag at my software vendor to get the new form 2000 available ASAP.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Oh yes, we have always had to develop our own analysis and form an opinion of value when completing a review. If expressing an opinion of value--we will and have been doing an appraisal that should be in compliance with Standard 1.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
My experience doing reviews is minimal. Yet, I know there are appraisers who do only reviews, so that clearly shows how one might develop a specialty in this trade. It is my conclusion that a well-done field review is as much work as a full appraisal, always, and if they want you to sprinkle it with your own conclusion to a value then the client has exceeded that work load and naturally the fee would be greater. Aside from an auditors request and obligation to select random reports "for review", that purpose of a review is understandable. Aside from that, I believe the client who orders reviews for "other" reasons is doing so because the weaknesses, the illogic, the bad comp selection, the wierd adjustments, and the inability to independantly and verbally summarize the analysis process has finally come home to roost ---- and now they most-likely have an over-valued property, described by short, canned and cloned text phrases, and against which a loan was made ! Nobody cared to address those things as the original loan officer, bank vice president and underwriter(s) were offering their 2-cents worth in the days following the submission of that appraisal !

They could have simply ordered another new appraisal back then, put off their loan decision another week, and done the right thing. If it is a "bad" report today, it was a "bad" report then ! Now the client wants one appraiser to point the nasty finger at another. They know exactly what was not "right" about the original report (now to be reviewed). Underwriters OBVIOUSLY can get very familiar with markets, and prices, and home qualities, and trends of value. They KNOW when they see an awkward report and they know when they see one which is squeaky clean. They should deal with the awkward ones when they first see them....by insisting the client secure another (new) appraisal from another local appraiser if that's what it takes to secure the loan "properly". If the bank must invest in an occasional "extra" report to get the loan done properly, then so be it, even if they have to cough up some of their "profits" to do so. Allowing awkward appraisals to pass as acceptable.....is totally irresponsible. What a shame that only appraisers are lined up for the eventual blame.
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
NO NO NO NO NO! NOT THE SAME FEE AS AN APPRAISAL! I'M YELLING BECAUSE YOU ARE DOING TWICE THE WORK! IF YOU DO A REVIEW WITH A VALUE OPINION YOU MUST CHARGE TWICE THE FEE YOU WOULD FOR AN APPRAISAL. IF YOU DON'T, YOU ARE WORKING FOR HALF-PAY. DON'T YOU GET IT?????????????
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
What's a review? No, seriously, charge at least the same as a full URAR, it is always more work than an actual appraisal unless you actually get to review a decent appraisal. Most lenders balk at the fee, but turn it down if they will not pay your fee. Double the fee is hard, because they are used to paying $150-200 for a review. A few lenders have conceded to my fees, but many more have chosen to shop around for a lower fee and someone always accomodates them. Let the dumb yahoos still charging the lower fees do the review for chump change. It will be one less headache and in my case one less blood pressure boil over when I see the report they want reviewed. :) Happy New Year :2gunfire: :beer:

My worthless brother-in-law who has had at least ten jobs in the last three years want to meet with me about being an appraiser. Somebody shoot me quick!
 
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