What/How Do I Approach This One

[LadybugLover]

I"ll try to make this brief. Received a request to do a desk review (before anyone flames me, yes, we get paid a reasonable fee for desk reviews). The property is one that I had a request to appraise a few years ago and declined due to various zoning issues and the complexity of the property.

The appraisal was done by a trainee in an area approximately 200 miles south of this area - we're in Central California, the appraiser is from a beach area in Southern California. The appraisal is signed by an AL, not an AR which is the first issue. Second issue is: The zoning is C-3, General and Service Commercial, single family residential is NOT allowed per the City zoning - just got off the phone. A few years ago when I declined the appraisal assignment it was zoned M-1, Light Manufacturing, and the SFR use was allowed under a conditional use permit that terminated upon change of ownership of the property. That being said, as of 03/08/2008 the zoning was changed to C-3.

The property was listed for sale in September of 2007 - the appraiser states the property is not listed for sale. Obviously he does not subscribe to the local MLS service or that would have been available to him.

There are NUMBEROUS glaring errors in this report just from a brief overview of the appraisal - I haven't even gotten into the serious review and analysis.

Because the appraiser used all Single Family Residential Zoned comparables in the report, obviously all of the comparable sales in the report are going to be no good. Because the property is zoned C-3, it should have been a commercial appraisal report. The property is being used as a landscaping business, koi pond sales, fencing, landscape rocks, etc. It is a SFR dwelling with a kitchen, three bed/two bath and the landscaping business owners live in the house. BUT, it's no longer a legal use can't be sold as a single family dwelling.

I'm trying to decide the best way to handle this desk review - it's through a AMC, so obviously the person assigning the review isn't going to have a CLUE what I'm talking about if I call and try to explain any of this.

I will definitely be sending the report into OREA for investigation, however, give me some words of wisdom on how to complete the desk review. I'd prefer professional responses and insight only please.

Mary

P.S., I have turned reports into OREA before and had great feedback and responses - Should I also turn it into Mortgage Fraud Watch? I don't know if the loan has been funded or if this is a pre funding review. :Eyecrazy:

 

[PropertyEconomics]

I think your course of action is quite clear .. Do the review!

 

[Elliott]

Ladybug said, "we get paid a reasonable fee for desk reviews"

Then what is the problem? I stopped doing any review work years
ago when everything I looked at was crap and asking for a rubber
stamp. The TAF system wants a unlimited supply of appraisers so
they are expendiable. In the future there will only be a few good
appraisers and a lot of crappy appraisers who never got caught.

 

[GCJim]

1.) Get fee increase to complete this particular review
2.) Whooops, no can do, right?
3.) If no fee increase, decline this particular review assignment and jeopardize all future biz from this AMC by getting blacklisted, being labeled uncooperative....etc.....etc........etc.

(I've been thru this particular mill before........)

 

[George Hatch]

If you were to ask the appraiser why he/she valued the property as a house when it obviously wasn't, they'd probably tell you that they used a hypothetical assumption because the client doesn't loan on commercial properties and just wanted the value as if it were a house.

It's the same reasoning used by appraisers who knuckle under to the house-n-five requests "The client wants it that way".

------------------

You have two really big errors and/or omissions (current zoning and existing use) that enabled the flawed highest/best use analysis. These errors fueled whatever other problems there are with the appraisal.


I don't think the OREA is going to be looking too kindly on the supervisor, who is in way over their head in terms of their own license limitations. The OREA will be judging this appraisal against what they would expect of a General Certified appraiser because that's who would normally appraise such a property.

I don't think it would be out of line for you to tell your client that because of the significance of these errors the credibility of everything else in the appraisal is in question, and as a result there isn't enough in the report for you to rely on to develop your own opinion of value.

 

[LadybugLover]

Thank you George - your reply is what I was looking for - In CA a trainee cannot be supervised by an AL, only an AR or AG, so that's one strike against the guy with OREA to start with. I was leaning toward doing a narrative review report so I could more accurately describe the flawed report instead of trying to fit the form and have it make sense. All of the comparable sales were from title company searches so obviously he doesn't have access to the local MLS - I think he's violated several rules, geographic competency being one of them! Tomorrow will be an interesting day sorting through this one!

Mary

 

[George Hatch]

Seeing as how your own license has limitations I'd just stick to the facts (zoning and existing use) plus any other material misstatements in the appraisal. Don't bother with critiquing the methodology or the opinions - the ones that are built on unturths are worthless anyway.

You don't need to quote USPAP, either. Just lay out the facts as best you can - the errors in the report will speak for themselves.

 

[LadybugLover]

Now that I"ve had an opportunity to delve deeper into this report it is amazing what I'm finding. Three of the sales used are the transfers to the bank in foreclosure actions. My first clue was when he put "unconventional" for the financing - yeah, I guess a transfer back to the bank would be "unconventional"! I have written a narrative review as the "form" just doesn't allow me to accurately address the issues. My husband is an AR and he concurs with my methodology. Maybe this will be one more skippy that bites the dust....... I'm also sending the report to OREA.

Mary