What would you do?

[Michael Tipton]

Banking regulations

Federal banking regulations require compliance with USPAP. Additionally, the financial institution has the option to utilize an appraisal obtained by another financial services institution. I would reference the federal banking regulations or offer to complete a new appraisal.

2231.0.3 OBTAINING AN APPRAISAL

...

An appraisal obtained by a financial services institution may be used by a federally regulated institution so long as procedures have been established for reviewing appraisals, the review indicates that the appraisal meets the regulation’s requirements, and the review is documented in writing.

2231.0.5 APPRAISAL REQUIREMENTS​

​

The objective of an appraisal is to communicate the appraiser’s reasoning and conclusions logically so that the reader is led to the appraiser’s opinion of market value. The contents of appraisals should conform to the standards of the Board’s appraisal regulation and to those established in the current USPAP as promulgated by the Appraisal Standards Board (ASB) of the Appraisal Foundation. The actual form, length, and content of appraisal reports may vary, depending on the type of property being appraised and the nature of the assignment. Standard forms completed in compliance with the regulation and USPAP are also acceptable.​

http://www.federalreserve.gov/boarddocs/supmanual/bhc/200701/2000p7.pdf​

 

[Webbed Feet]

To All,

You know, this continuing saga, of mortgage businesses that are not and were not a real estate appraisers client, asking for changes to an appraisal report they never contracted for is just brainless on their parts.

Can you imagine an attorney getting contacted with a request, by some before never known third party, asking the attorney to please alter the language on some contract the attorney created for someone else? At no charge for free to boot without the new third party being under contract to that attorney for that attorney's services? Regardless of the fact one of the prior named parties in the contract document, now being asked to be altered, is now working with this new third party the attorney has no contract for services with, what do you suppose they would get told?

Webbed.

 

[Wolverinefan]

Well said Webbed!

 

[Mztk1]

Can you imagine an attorney getting contacted with a request, by some before never known third party, asking the attorney to please alter the language on some contract the attorney created for someone else? At no charge for free to boot without the new third party being under contract to that attorney for that attorney's services? Regardless of the fact one of the prior named parties in the contract document, now being asked to be altered, is now working with this new third party the attorney has no contract for services with, what do you suppose they would get told?

Webbed.

But we're not attornies. People who hire attornies are results driven. The question, How good is he? Namely means: Does he win his cases? But to pick an appraiser based on results, namely means: Will I get the loan with the guy? And that is the antithesis of what we want because it leads to the use of unethical appraisers and potential future problems. Plus, compared to attornies, we are not in that high of demand, and our field is flooded. Plus our expertise is not on some enigmatic thing like the law and rights but more akin to a house painter, that is, something everyone THINKS they can do just as well. Let's face it and lay it to rest, the analogy between an attorney and an appraiser is a specious one and the reason attornies get away with what they do is because the market allows them.

Perhaps after this bust is over, with education requirements being more rigid to prevent new people from jumping in at will, we will grow some respect. But we are not there yet. I don't shake my hair back, raise my chin and pompously declare "I'm an appraiser" at my country club's cocktail party, Duck. And who I am kidding? I don't even go to "Cocktail Parties" or a country club for that matter, unless we're talking beer by the pool that I snuck into the YMCA.

I would in a heartbeat ask a lender to send me the copy of the legal description they have and then look at the deed, or the tax records and see if it matches one. If so, I'd simply write back saying: "I have reviewed the legal description you sent me for the property located at zzz and have confirmed it is consistent with the legal description found on the recorded deed in Book XXXX, Page XXXX in the County of Yada yada yada." Heck, my 9 year daughter could do that. Sure, I can tell them to go ask title and stress how it ain't my job, but running a successful business doesn't mean clocking out at 5PM.

Business tip #1: When at all possible, always put the customer, client, person making a request, etc., first. Good will is the only thing an appraisal company really has as an asset.

 

[jay trotta]

JK.....you did read last weeks Miami Herald report on the bust in Fla. of the sleezy Mortgage folk ? Just who do you think your doing binezzz with ??

Honest, upright Lenders ? Hell, half of the AMC's have been steelin your money for the past 5+ years - yea they're supportive all right, of their own pocket, go ahead work for Free.....ifn thats Your business decision.

Additionally, if your Client sends off the document to another Lender, how is that your problem ? The new guy did not engage your services, why in the world are we forever giving away the farm ? and then everyone wants to know these jerks want comp.checks for free or push Your Fee's to the bottom of the barrell. They're Not going to be your New Client, it's as much of a crock as the infamous comp.check. I don't do those either...No Freebies

We'll see what happens after Oct.08 ayy

 

[Mztk1]

Yeah Jay, I read it, So what? It has nothing to do with good service.

I admit, I am a weird kind of guy. When I was 13 or 14 I had friends who wanted to be an American Hero like John Wayne in the Army, or a cop, or a doctor or a lawyer, or a rock star or professional sports player. But me, as sad as it sounds, I wanted to be an appraiser. I am very happy to be one and I love what I do. I have been in real estate since the age of 14 or 15 and my entire family has been or remains in it to this day. It is just in my blood and it has never ever felt like work to me.

I pride myself on providing the best customer service I can, when I can. I have done quite well over the years for myself and have, to the best of my knowledge, remained ethical. When times have gotten rough the good clients I have had have stuck with me. I was the first appraiser I knew who checked "declining" in my markets during the current downturn, back in late 2005. Several appraisers I know (who I respect a ton) said I was nuts. I said, no, I'm just being honest, look at the data; and my regular clients have stood by me with the ones I've lost only gone because they are out of the business. I also started including statistical support of the market conditions plus 2 pendings and/or listings long before clients were requesting them because it was obvious I needed to in order to determine value. I enjoy the process of discovering a well supported value. Others complain.

A lot of people on this board are leaving the business due to a lack of work. I don't have the work I did have, and frankly this past week has been terrible, but all in all I am doing better than most here, judging from the responses in the thread that asks "How many are you getting?" I work for mortgage brokers, for banks and for AMCs and I don't "hit" value but call it like it is. Yet I still get a decent amount of work. The only thing I can owe this to is good will. When my clients needed something that wasn't difficult to provide, meaning it would take less time than writing this post, and providing it wasn't unethical, I have provided it happily and will continue to do so. I like to believe the reason I have stayed in business doing okay (knock on wood) is because I have always been there for them and now they are there for me.

My business model is holding up, Jay. I hope the same is true of yours, but neither of us can work outside of our own personalities - I can't be you and you can't be me, so all I can hope is that both methods do well.

 

[chicago guy]

Great post Jim. I am many years behind you in the profession, but have found that providing reasonable services to potential clients when both ethical and not difficult has formed the basis of some of my best clients. Something as simple as answering a generic question competently and honestly can lead to profitable relationships.

 

[Kevin A. Spellman]

I have been exposed to a similar situation with a neighborhood bank I was not servicing.

I would take the conversation into another direction than just reviewing a legal description. I would ask if they can close the loan with a copy of the appraisal they are in possession. If they cannot, I would ask if they need an appraisal in their name. I would then ask if they would like professional courtesy and offer a discount to avoid a second valuation cost for their client.

I would offer a discount only if I have been paid for the first report. I have secured two banks as a client with this scenario. I typically offer the new report for free if they order a second report with a typical fee. I only offer this if I know the lender is in my service area and is worthy of a discount to create a business relationship. I would not offer this to a mortgage broker or a mortgage company only to a local bank.

 

[Jo Ann Meyer Stratton]

I have been in the appraisal field for 41 years, first 14 as an ad valorem appraiser which included title abstracting back to the original Federal Land Patent. In addition I have been married to a registered land surveyor (registered in three states) for 52 years who assists me in locating properties and determining areas, etc. And with that back ground I would never, ever certify or verify a legal description!! (if my husband were to provide that advice--it would be a new assignment, new report, new effective date with the applicable fee to the client for him) That is the responsibility of a title company, registered land surveyor or real estate attorney in some states. I include a copy of the recorded document or a printout from the assessment roll in my report when ever there is a metes and bounds description for the subject property for that reason. My typing of a metes and bounds description could have an error which would make it my mistake. By using a copy of an official document then it becomes the mistake of the title company or assessment office--not mine.

My suggestion for the original poster would be that the lender needs to contact a title company/real estate attorney to verify the correct legal description for the subject property. If they want a new legal description applied for the subject property in an appraisal report-it is a new assignment with a new effective date for a new client and a new fee.

Providing advice on a legal description by an appraiser is a penny wise-pound foolish business decision similar to a lender using an AVM for a 100% loan.

 

[Webbed Feet]

Mr. Klos,

Your description that makes it sound like all attorneys are wealthy private club members, with long flowing hair, is a bit of a fantasy.

While I appreciate your description of customer service, this thread started out with a post about a request for noncustomer service. When we, as appraisers, proceed to respond to and treat nonclients as if they were our clients we then have made them defacto intended users of the appraisal report they were never an intended user of. Check your copy of USPAP. We are not allowed to add originally unidentified intended users to work we have already sent out the door.

I'll tell a story of my own just to counter your wonderful customer service stories. Once upon a time the local BofA regional manager asked me to apply to be on their approval list. Their approval package was quite extensive. It took me many hours of my time to complete. I submitted it, and then forgot about it as something on the order of ten months to a year or so went by without any appraisal orders from them after they asked me to apply for the list. Then one day along comes this appraisal order. I research the subject and find out this is one of the most complicated nightmares of an assignment I had ever seen. I called up the local BofA office and spoke to two managers there, including the regional manager. I explained to them all the reasons they were incorrect about trying to order this appraisal with that subject property in the way they were ordering it, pointed out it was they that asked me to apply to their list and after my taking quite a bit of my time to do so they don't order diddley with me for almost a year, then when they do..... it's a nightmare. I concluded in a flat, but polite manner, that if they wanted to do business with me what they do is also send me decent business. Not just stuff so complicated that any fee any appraiser could obtain on it could only be considered a loss and purely a customer service act done for REGULAR clients! I thanked them for their consideration and turned the assignment down without so much as offering to even attempt to bid a fee on it. I left them with a clear message that if they wanted to do business with me, they could do it by starting out with at least a mix of a few decent orders to go along with the nightmares.

The results of my stand regarding noncustomer service, to potential customers only coming to me when they have something nobody else wants either, resulted in good orders starting to come across my fax machine shortly thereafter, and a good and long relationship with the local BofA office. I've done probono work for charities. Many was the time that I've spent several hours on the phone with a member of the general public with a complicated real estate issue who could not comprehend why nobody would, or could, help them. But when it comes to professional users of appraisal services, that are prior noncustomers, treating us like we are obligated to provide services to them for free, I have long ago drawn the line because it has been MY experience that the majority of them will never reciprocate the service with any future benefit for little ol moi ..... Typically, because little Ms. Dimwit employee on the other end making the request (make that demand most the time) has no authority to send any work my way anyway. And Ms. Dimwit thinks all real estate appraisers are free public services provided by some unknown trust fund, perhaps set up by Bill Gates, with an obligation to provide all services for free.. and if they don't what you do is threaten them with some bonehead threat. Or you can insert some financially strapped independent MBer, for Ms. Dimwit, making demands for free noncustomer service and/or dangling empty promises of future work that will never happen.

So while you are handing out free noncustomer service to professional users of appraisal services, that mostly has amply proven that the entire genre has little to no respect for real estate appraisers, I'll be either helping a member of the public that really needs the help and appreciates my time, or taking care of my personal life stuff. Those professional users of appraisal services? They can actually do business with me if they want my attention. I'm too old to appreciate dating a tease.

Webbed.

P.S. Ms. Meyer-Stratton..... Hear, hear!!!!!