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USPAP Question For Review Assignment

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Valuadora

Sophomore Member
Joined
May 10, 2008
Professional Status
Certified General Appraiser
State
California
I'll start off by saying "Hi Denis!" because you'll probably be one of the responders!

I prepared an appraisal review a month ago. The original appraisal appraised two properties. In that assignment I accepted the concluded value for Property #1 but rejected the method used to appraise (and thus the conclusion) for Property #2. At that time, I did not complete my own opinion of value, because we expected the original appraiser to revise his report.

The appraiser disagrees with me and believes that the method I suggested is not relevant. So now I have been asked to value Property #2. My question is what is the best way to prepare my own report:
1. a supplement to my prior review report in which I conclude to my own opinion of value; or
2. an appraisal report.

In either case, I will incorporate by reference the prior appraisal as well as my prior review.
Thanks for discussion/responses

Nancy
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
New assignment. #2
I hope you loaded for bear on your review.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
Yeah...game that can really hurt you if you aren't prepared. He will be looking to shred you to pieces.
 
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residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
Charge high and prepare a very thorough report; making sure you verify all your sales and the subject with the party of the transaction to make sure motivations etc are all typical with no undue stimulus driving the price ...as well as verifying concessions to make sure you adjust correctly (which will be $ for $, unless there is some ulterior motive behind them). Do the same with the comps he used, as well.
 

TXTea

Sophomore Member
Joined
Aug 25, 2016
Professional Status
Certified General Appraiser
State
Texas
I don't have enough information about the properties you're dealing with. Typically, when I destroy another appraiser's appraisal I do so on a Form 2000 for residential which includes my own analysis or a narrative for commercial. I combine the review and my own analysis into one assignment.

And like Residentialguy said, hope you loaded for bear. See, you don't know the other appraiser. He/she could be a total dumb-azz. Or. He/she could be top shelf talent. So better come prepared. Better come fully loaded. Better have armor. I personally get pretty nasty when someone attacks my appraisal. Good luck.
 
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hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Hey, Nancy!

I think you could do it either way but if it were me, I think I'd side on amending my original review.

Just so I understand the situation:
Two values (appraisals) provided in one report.
Your review SOW is to evaluate the quality of the other report and either agree or disagree with the value (which is an appraisal); if you agree, fine. If you disagree, then you must provide (a) the reason for your disagreement and (b) your own opinion of value.
For the expedited scenario, it sounds like Property#2's review wasn't completed as-per the normal SOW. You didn't agree with the value of property #2 due to the methodology used; the hope (I'm sure of the client) was that the original report would reconsider the methodology it used and agree to use the one you thought appropriate. A month goes by and that isn't the case. Now, the client is asking you to provide your own value as the report will not revise its methodology.

If I'm reading the scenario correctly, this is why I'd opt to complete the review as part of the original review assignment. This presumes that had you/the client known that the original report wouldn't revise its methodology approach, you would have been expected to complete your own valuation as part of the review. What happened is that the time between you disagreeing with the methodology used and you being asked to provide your own opinion was due to the hope that the report would revise its approach. It didn't. Here's another way to look at it: If you had been asked 7-days after you rejected the original report's methodology to complete your own review value, would you have considered that a new assignment? Probably not (so I think!). If not, then the 30-day delay is likely not that big of deal considering the complexity of the property which I'm thinking would create a methodology conflict.

Completing it as part of the original review also has some process-benefits: for those sections that you find reliable, you do not have to duplicate; you can incorporate those parts into your own analysis; assuming the rest of the report was acceptable, this would allow you to limit your focus on the methodology/approach.

I'm also assuming that the original review assignment's fee included the cost of the review valuation if there was a disagreement. If not, then this becomes a change of SOW which doesn't (IMO) necessarily require a new assignment, but would create the opportunity to renegotiate the fee.

So, I don't think this is a USPAP issue per se. My guess is there is enough flexibility in the original review assignment and with your relationship with the client to initiate a new assignment with a value-only (not part of the review) if that is what you want to do.

I think this is a business decision. I'd rather make it part of my original review assignment for the reasons I've already stated. I also think from the client's regulatory-compliance perspective, it is better to have the new valuation in the review appraisal that was completed by the same review appraiser rather than as a separate assignment with a new fee. But I'm probably ultra-conservative when it comes to compliance. :cool:
 
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residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
Hey, Nancy!

I think you could do it either way but if it were me, I think I'd side on amending my original review.
Then you'd have to amend the fee, which could become problematic, since she already sent it in. That's why I vote new assignment and do an appraisal. Typically on a review, my fee is based upon work done. Inevitably, if a review is being asked, there is a problem and page 2 is necessary. These are twice the work of an appraisal. You basically have to do your own appraisal (much tighter, too) then line by line, check the other appraisal and comment. That equates to double fee of an appraisal.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
"OP_I prepared an appraisal review a month ago. The original appraisal appraised two properties. In that assignment I accepted the concluded value for Property #1 but rejected the method used to appraise (and thus the conclusion) for Property #2. At that time,

to clarify, did the OA appraiser 2 properties on one appraisal, or is it 2 separate appraisals, one on each property? Was it a URAR form/lender assignment, or other/private client/use?

I did not complete my own opinion of value, because we expected the original appraiser to revise his report.

Was it part of SOW/client directive/pre printed review form that if you disagreed with a value on any of the properties, that you were supposed to develop your own opinion of value? Who is "we" above? ..I am not familiar with a reviewer expecting an OA revise their report , just because I disagree with their value. In my expedience, If I disagree with a value, I state why and develop my own opinion of value.

The appraiser disagrees with me and believes that the method I suggested is not relevant. So now I have been asked to value Property #2. My question is what is the best way to prepare my own report:

Develop an appraisal on the property and state why /purpose of assignment (due to a prior review where you disagreed with a value/and method of a report you reviewed. that is my opinion of how to handle it. ( a continuation of original assignment or a new one, I dont' know which one makes more sense, though I'd ask the client how they want it done. Now it is a month passed since original eff date, so you would have to disclose a prior service (your review) on the subject )
 
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J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Res Guy is making this a fee issue.

I don't know the terms of Her original engagement, if it was a form 2000, if client expected her to develop an opinion of value if she disagreed with a value under review.

I would not want to make this about fee unless I was certain in her case, that I fulfilled original assignment of review. A relationship with a client and avoiding her own possible non compliance or USPAP issues is more important than fee , imo for this situation.
 
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