USPAP Question

[PropertyEconomics]

A simple question was asked. Sometimes people ask questions for which they already know the answer in order to gain greater understanding of the reasons for the answer. Sometimes they ask questions to ascertain the audiences general knowledge of the answer.

I have seen worse questions asked by those whose basic licencure should imply they already know the answer. The question was asked by someone who readily admitted she was not an appraiser.

 

[CANative]

Jacqueline Doty's Overview

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WOW .... so let me throw my $0.02 in ... IM SHOCKED (well not really) someone from an Appraisal Management company, that professes to "manage the appraisal process", doesnt know contract review is a USPAP requirement.

My suggestion, you and every one of your colleagues should sign up for the 15 hour USPAP class. If you are going to attempt to manage the process it might be helpful to have professional instruction as to the standards that affect those you hire.

My guess is you may have an appraiser on your panel to apologize to.

 

[Ken B]

And?

............

 

[Evincere]

Exactly, Peter, which is why I'm dumbfounded with the original question.

That makes 2 of us dumbfounded. If I am not mistaken, is this not the same person who initially crafted and championed the 1004MC for the GSE's now asking how and why a contract is relevant to USPAP?

This is like a certified mechanic asking the owner of the car where the steering wheel and gas pedal are located.

 

[Terrel L. Shields]

The contract is just another piece of the appraisal puzzle. Appraising is a heuristic endeavor which means the appraiser should synthesize all the data they can muster in support of their OPINION. It isn't a data dependent answer so much as the data reinforces the appraisers intuitions (which in turn, were perhaps influenced and/or evolves from the data that they find.)

You might check Germany. My understanding is that there is no public data to work with, an outgrowth of anti-Nazi laws. The Brits, and other European countries, have some very strange (to our minds) laws about privacy and I know it was not always easy to access even church records there when doing genealogy searches.

 

[Meandering]

Yes, analysis of the contract is important, unless,

No one will give the appraiser a copy of the contract.

Then we have to narrate the steps we took to get a copy of the contract.

So how important is it to the analysis if the law makers don't recognize it may be a needed piece of information for the valuation of real estate. Considering the real estate market is a major economic indicator. why is there not strength in the law for mandatory disclosure of an agreement of sale?

And to this quandary I'll add,

Financing concessions,
teaser rates,
introductory interest rates,
and all those other lending games which may or may not be in the note, but are definitely not in the recorded mortgage.

There, is where the importance truly lays. At least with my calculator.

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[Jacqueline Doty]

deleted irrelevant content

 

[Sunshine in VA]

Ken is exactly right. The purchase agreement/sales contract tells us a lot more than just a sales price. It also tells us if it is an arms length sale, i.e., not a sale where there is a bias or interest shared by the parties such as being family members, business associates, or close personal friends. That is not perfect but it is a beginning point as some of those mentioned may have an undue influence over one another. Also, it tells us the terms, which must be legal to the extent that the appraiser has knowledge to ascertain that information. And, it tells us what is included such as real property and real estate.

1. Real Property......The rights to real estate
2. Real Estate.......the concept of the physical location, it's boundaries, it's attachments, and how far below and above the surface of the earth that extends.

It provides the appraiser the opportunity to analyze whether or not it is consistent with market factors based on property type, location, amenities, and market reaction to those factors.

I do know that in most(very few) countries I have become familiar with, this information is provided to the appraiser or whatever they are called in their country.

And, it is required by the Uniform Standards or Professional Appraisal Practice (USPAP) that we analyze such a contract if it is available and explain what steps we took to secure it, if it is not available.


Next question?...................................

And don't forget that USPAP states if the information is irrelelvant, a statement acknowledging the existence of the information and citing its lack of relevance is required.

I find that most appraiser forget this part.

 

[KONA]

The appraisal is more than a communication of a value opinion, but also a communication of marketability; thus analysis of the purchase contract (its relevance or not, arms-length or not… ) should be provided to the client who’s is trying to make a prudent loan decision.

 

[Meandering]

Ms Doty,

If you are still there, might I ask why...

If you are looking for the opinions of professionals....

Have you put some of them on ignore?

These are professional people, and while they might not provide an answer that address your slant on your question, it really can't be a true fact finding mission if you eliminate those that disagree with you.

Maybe I'm just a product of the tolerance that was taught in Public Schools, that having multiple opinions from different backgrounds and filters, makes for ultimately better answers and is one of the things that helped make this a great country.

With your high level in a mega corporation, why would you consider that people who disagree should be silenced?

This is not sounding good to me.


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