What is a "Quality" Appraisal?

[Louis Pompeo]

Hmmmmm

The report format should not affect the credibility nor the reliablity. Only the scope of work, and the data available should do so. 90 pages of piffle can be unreliable and a 10 page "letter" appraisal can be reliable depending entirely upon the scope of work and the accuracy/quantity/quality of the available data. Data are the key.

So....if I hear you correctly.....as a client, you would equally rely upon the conclusions of a self-contained and a restricted report, regardless of the circumstances?

Therefore, as one who understands the appraisal process and requiring the services of an appraiser, and not intending to hand off the appraisal to a third party - you would never ask for a self-contained report, or even a summary report - because they are all equally reliable. You could sleep well at night, every night, making a major investment decision to spend yours or a family members hard-earned money on a piece of real estate in an area of the country that you have never been - because the restricted report is just as reliable to you as the others?

Be careful with your answer...

 

[CANative]

Restricted reports are for clients that already know, on know they don't need to know, what is not being summarized or described. They just need their information stated.

Can you rely on a John Deere lawn tractor or do you require a Kubota SR75 Combine? I'm sure either company will be happy to sell you what they have.

 

[23Degrees]

It is good to have these discussions on quality and it is something that should be demanded. Yet with the current methodology in the residential arena being what it is I can't help thinking that prevention of a similar housing debacle in the future does not stop at all appraisers producing high quality reports and reporting market values within reasonable range of each other. Maybe that is not something we need concern ourselves with, maybe it is.

In neighborhoods that are down 25%, 30% or more from the peak I kind of wonder if the guy who got his loan via the quality report in 2006 but is still getting foreclosed on or whose life savings/down payment has disappeared is really totally psyched that at least the report used for his loan was a "quality" one. Would his attitude and situation be substantially different if Skip had done it and the reported MV had been 4% higher or lower? Would it be making any difference for that person now? If the actual client is not a mortgage broker who has moved on or a lender/bank that was bailed out would it be making anything beyond a marginal difference to them at this point? If we do concern ourselves with that question and address it within the methodology, would it make what we do more relevant, important, or useful?

 

[Terrel L. Shields]

Conor said

So....if I hear you correctly.....as a client, you would equally rely upon the conclusions of a self-contained and a restricted report, regardless of the circumstances?

The results should be IDENTICAL. Why are you assuming that the SELF-CONTAINED report has better analysis or would arrive at a different value than the RESTRICTED. You are only talking about the REPORT not the APPRAISAL. You sound like you think that a restricted report = the old limited scope and therefore was less work, less research, less development. NOT SO.
SCOPE OF WORK tells me what you did...not whether i wrote 3 pages, 30 pages, or 300 pages. Don't mix Std 1 with Std 2....A restricted report is an issue for Std 2 not for Std 1. You did what you did. what you report is something entirely different...and if it isn't you are doing something wrong.

Fat file, lean report or lean file, fat report.....a restricted report doesn' t mean lean report and lean workfile.

 

[Terrel L. Shields]

Would it be making any difference for that person now?

Separate issue from the issue of report quality. Obviously, we all screwed the pooch. Each and every one of us. Why? because we were using sales data that was data created by sales which themselves were rubberstamped or created by Skippy. Nope. We didn't inflate our values. Didn't have to. Skippy inflated our comps, so we sailed along ever upwards. How many of us actually adjusted downward for a sale that was slightly high under the assumption or knowledge that the appraiser inflated the value? I recall some that were so outrageous I wouldn't use them.
At one point, it was so obvious that every FHA sale was 5-10% higher than any similar property, I quit using them as comps. And when I started looking at mortgages, I suddenly noticed that the highest priced homes invariably were financed by mortgage banks like Wells-Fartgo, IndyMac and Countrywide....they were not financed by Arvest, Regions, or First National, the old heads of the neighborhood. The little light bulb came on a little late because like every other appraiser I knew, I had used comps that were associated with the very mortgage brokers who were pressuring (with success) those appraisers who were jacking the values up. A rising tide floats everyone's boat. All we had to do to 'inflate' values was ride the tide. It took everyone to sea. And if we hadn't went along, most of us would have run out of work or lost our license for under-appraising because 'everybody' was doing it, including board members, investigators, underwriters.
Remember people telling about prices rising by 10-20% or more in a quarter? Was that real? Of course, it was...in a very unrealistic way.

 

[Louis Pompeo]

The results should be IDENTICAL. Why are you assuming that the SELF-CONTAINED report has better analysis or would arrive at a different value than the RESTRICTED. You are only talking about the REPORT not the APPRAISAL. You sound like you think that a restricted report = the old limited scope and therefore was less work, less research, less development. NOT SO.
SCOPE OF WORK tells me what you did...not whether i wrote 3 pages, 30 pages, or 300 pages. Don't mix Std 1 with Std 2....A restricted report is an issue for Std 2 not for Std 1. You did what you did. what you report is something entirely different...and if it isn't you are doing something wrong.

Fat file, lean report or lean file, fat report.....a restricted report doesn' t mean lean report and lean workfile.

I didn't say the results weren't identical. I also understand and agree with the thin report, thick file, etc.

I asked you a question and you're blathering about everything but an answer to my question.

So let me ask one more time, real slow....watch my lips...

Would you equally rely upon the conclusions of a self-contained and a restricted report, regardless of the circumstances?

 

[CANative]

Would you would equally rely upon the conclusions of a self-contained and a restricted report, regardless of the circumstances?

Your question cannot be answered because it poses a non-sequitor. By circumstances one would assume you really mean intended use and/or intended user. That drives the scope of work therefore you can't pose the question in terms of using "regardless of the intended use or user." It doesn't make sense.

Why is a novice like me telling a highly qualified veteran this?

I suppose you could say that if the intended user needed the analysis described instead of stated then the restricted report would not do but if all they needed were statements they could rely on description even if they weren't too happy about it.

 

[Louis Pompeo]

Conor pushes Greg to the side and stares at Terrel...hands on his hips....waiting for his answer...

Notices in his peripheral vision that Greg is flopping around trying to get off the floor...

Throws him his HP12C...."Here kid, play with this while the adults are talking..."

 

[CANative]

Why don't you put down your HP12C and stop playing with yourself and explain it to me?

 

[Louis Pompeo]

Conor wishes he knew how to put Greg on his nattering nabob ignore list...