Frederick R. Ruffell
Senior Member
- Joined
- Jan 21, 2002
- Professional Status
- Certified General Appraiser
- State
- California
I will be arguing with an appraiser employed a large AMC tomorrow. At issue is a request to review additional documents (i.e. counter offers) not supplied to the appraiser prior to the completion of the appraisal report, delivery to the client (AMC), and acceptance by the client, and the client delivering the Report to the lender.
I initially requested the purchase agreement but none was forthcoming. I completed the appraisal report and delivered to the client. Did not pass review and was asked to "correct" appraisal report. Purchase contract was supplied and I negoatiated an additionl fee based on the additional work. Upon reviewing the purchase contract I noted that there was a counter offer (check box at signature) in the deal but none was included in the documentation. I noted this and amended the purchase price to match the purchase agreement and the dates etc. and delivererd the amended report. It passed the clients review and was sent on to the lender. Appraisal assignment was removed from my que on their web portal. A day later the lender has requested that I review now 2 counter offers. The AMC is requesting that also.
I am requesting an additional fee and sighting a new scope of work = a new assignment = a new fee.
Well it got kicked upstairs to an Appraiser... About time I thought... somebody that knows about this stuff. Well not so.
He sites Scope of work rule and other USPAP as follows:
"Dealing with such a request does not constitute a “new assignment”. That would be true if there were a new client, or if the effective date of the appraiser were changing. But a change in the Scope of Work, or in this case a following through on the original Scope of Work with information not previously available, would not mean it becomes a new assignment. (See USPAP Scope of Work Rule where it says “Determining the scope of work is an ongoing process in an assignment. Information or conditions discovered during the course of an assignment might cause the appraiser to reconsider the scope of work”, and USPAP Advisory Opinion 28 on Page A-95 in Example 6 where the type of property and Scope changed but didn’t create a new assignment, and USPAP FAQ 135 “Does Changing the Sale Price Result in a New Assignment”.)"
My contention here is that key word is "during". The assignment was complete once I delivered the assignment results (i.e. Appraisal report).
I am going to point out USPSP FAQ 155:
"155. CHANGING THE SCOPE OF WORK AFTER THE REPORT HAS BEEN SUBMITTED
Question: Sometimes after submitting my appraisal report, my client will ask me to perform
additional work. This can mean looking at more or different comparables or
developing another approach. Do these requests for additional work create a new
assignment?
Response: No. Requests to perform additional research or analysis change the scope of work, but do notcreate a new assignment. The additional work can be performed as part of the original assignment. The appraiser may decide, as a business decision, to treat the request for additional research and analysis as a new assignment, but it is not required."
USPAP FAQ 190:
"190. PURCHASE CONTRACT IS NOT PROVIDED TO THE APPRAISER
Question: I was recently engaged to conduct a market value appraisal of a one-to-four unit
residential property. The intended use of this appraisal is to assist the client in
analyzing the loan collateral associated with the property’s purchase. I requested a
copy of the purchase contract from the client, but they refused to provide it
although they acknowledged that a contract for purchase of the property in fee
simple exists. They did, however, provide a sale price orally. Can I continue this
assignment, without the purchase contract, and comply with USPAP?
Response: Yes. You can complete the assignment in compliance with USPAP; however, you will need to
ensure compliance with Standards Rule 1-5(a) in developing the appraisal, and with Standards
Rule 2-2(a)(viii), (b)(viii), or (c)(viii), as applicable to the type of appraisal report determined
most appropriate, given the intended users, in reporting the assignment results...."
And USPAP FAQ 191:
"191. AVAILABILITY OF CURRENT AGREEMENT OF SALE
Question: When developing a real property appraisal, what is an appraiser’s responsibility
under USPAP if a lender refuses to provide a copy of the current agreement of sale
of the subject property?
Response: Standards Rule 1-5(a) requires an appraiser developing a real property appraisal, if such
information is available to the appraiser in the normal course of business, to:
analyze all agreements of sale, options, or listings of the subject property current as of
the effective date of the appraisal.
The normal course of business for an appraiser when the property is known to be the subject of a
pending transaction is to ask the client for the terms of the agreement. If this request is denied,
then the appraiser should make reasonable attempts to obtain this information from other sources
through legal means commonly available to and practiced by the appraiser’s peers. Standards
Rule 2-2(a)(viii), (b)(viii), or (c)(viii) also includes the requirement that:
If such information is unobtainable, a statement on the efforts undertaken by the
appraiser to obtain the information is required. If such information is irrelevant, a
statement acknowledging the existence of the information and citing its lack of relevance191. AVAILABILITY OF CURRENT AGREEMENT OF SALE
Question: When developing a real property appraisal, what is an appraiser’s responsibility
under USPAP if a lender refuses to provide a copy of the current agreement of sale
of the subject property?
Response: Standards Rule 1-5(a) requires an appraiser developing a real property appraisal, if such
information is available to the appraiser in the normal course of business, to:
analyze all agreements of sale, options, or listings of the subject property current as of
the effective date of the appraisal.
The normal course of business for an appraiser when the property is known to be the subject of a
pending transaction is to ask the client for the terms of the agreement. If this request is denied,
then the appraiser should make reasonable attempts to obtain this information from other sources
through legal means commonly available to and practiced by the appraiser’s peers. Standards
Rule 2-2(a)(viii), (b)(viii), or (c)(viii) also includes the requirement that:
If such information is unobtainable, a statement on the efforts undertaken by the
appraiser to obtain the information is required. If such information is irrelevant, a
statement acknowledging the existence of the information and citing its lack of relevance is required.
Refer to Standards Rules 2-2(a)(viii), (b)(viii), or (c)(viii) for related reporting requirements, and
to Advisory Opinion 1, Sales History for additional information."
So when does an assignment end? what say you?
I initially requested the purchase agreement but none was forthcoming. I completed the appraisal report and delivered to the client. Did not pass review and was asked to "correct" appraisal report. Purchase contract was supplied and I negoatiated an additionl fee based on the additional work. Upon reviewing the purchase contract I noted that there was a counter offer (check box at signature) in the deal but none was included in the documentation. I noted this and amended the purchase price to match the purchase agreement and the dates etc. and delivererd the amended report. It passed the clients review and was sent on to the lender. Appraisal assignment was removed from my que on their web portal. A day later the lender has requested that I review now 2 counter offers. The AMC is requesting that also.
I am requesting an additional fee and sighting a new scope of work = a new assignment = a new fee.
Well it got kicked upstairs to an Appraiser... About time I thought... somebody that knows about this stuff. Well not so.
He sites Scope of work rule and other USPAP as follows:
"Dealing with such a request does not constitute a “new assignment”. That would be true if there were a new client, or if the effective date of the appraiser were changing. But a change in the Scope of Work, or in this case a following through on the original Scope of Work with information not previously available, would not mean it becomes a new assignment. (See USPAP Scope of Work Rule where it says “Determining the scope of work is an ongoing process in an assignment. Information or conditions discovered during the course of an assignment might cause the appraiser to reconsider the scope of work”, and USPAP Advisory Opinion 28 on Page A-95 in Example 6 where the type of property and Scope changed but didn’t create a new assignment, and USPAP FAQ 135 “Does Changing the Sale Price Result in a New Assignment”.)"
My contention here is that key word is "during". The assignment was complete once I delivered the assignment results (i.e. Appraisal report).
I am going to point out USPSP FAQ 155:
"155. CHANGING THE SCOPE OF WORK AFTER THE REPORT HAS BEEN SUBMITTED
Question: Sometimes after submitting my appraisal report, my client will ask me to perform
additional work. This can mean looking at more or different comparables or
developing another approach. Do these requests for additional work create a new
assignment?
Response: No. Requests to perform additional research or analysis change the scope of work, but do notcreate a new assignment. The additional work can be performed as part of the original assignment. The appraiser may decide, as a business decision, to treat the request for additional research and analysis as a new assignment, but it is not required."
USPAP FAQ 190:
"190. PURCHASE CONTRACT IS NOT PROVIDED TO THE APPRAISER
Question: I was recently engaged to conduct a market value appraisal of a one-to-four unit
residential property. The intended use of this appraisal is to assist the client in
analyzing the loan collateral associated with the property’s purchase. I requested a
copy of the purchase contract from the client, but they refused to provide it
although they acknowledged that a contract for purchase of the property in fee
simple exists. They did, however, provide a sale price orally. Can I continue this
assignment, without the purchase contract, and comply with USPAP?
Response: Yes. You can complete the assignment in compliance with USPAP; however, you will need to
ensure compliance with Standards Rule 1-5(a) in developing the appraisal, and with Standards
Rule 2-2(a)(viii), (b)(viii), or (c)(viii), as applicable to the type of appraisal report determined
most appropriate, given the intended users, in reporting the assignment results...."
And USPAP FAQ 191:
"191. AVAILABILITY OF CURRENT AGREEMENT OF SALE
Question: When developing a real property appraisal, what is an appraiser’s responsibility
under USPAP if a lender refuses to provide a copy of the current agreement of sale
of the subject property?
Response: Standards Rule 1-5(a) requires an appraiser developing a real property appraisal, if such
information is available to the appraiser in the normal course of business, to:
analyze all agreements of sale, options, or listings of the subject property current as of
the effective date of the appraisal.
The normal course of business for an appraiser when the property is known to be the subject of a
pending transaction is to ask the client for the terms of the agreement. If this request is denied,
then the appraiser should make reasonable attempts to obtain this information from other sources
through legal means commonly available to and practiced by the appraiser’s peers. Standards
Rule 2-2(a)(viii), (b)(viii), or (c)(viii) also includes the requirement that:
If such information is unobtainable, a statement on the efforts undertaken by the
appraiser to obtain the information is required. If such information is irrelevant, a
statement acknowledging the existence of the information and citing its lack of relevance191. AVAILABILITY OF CURRENT AGREEMENT OF SALE
Question: When developing a real property appraisal, what is an appraiser’s responsibility
under USPAP if a lender refuses to provide a copy of the current agreement of sale
of the subject property?
Response: Standards Rule 1-5(a) requires an appraiser developing a real property appraisal, if such
information is available to the appraiser in the normal course of business, to:
analyze all agreements of sale, options, or listings of the subject property current as of
the effective date of the appraisal.
The normal course of business for an appraiser when the property is known to be the subject of a
pending transaction is to ask the client for the terms of the agreement. If this request is denied,
then the appraiser should make reasonable attempts to obtain this information from other sources
through legal means commonly available to and practiced by the appraiser’s peers. Standards
Rule 2-2(a)(viii), (b)(viii), or (c)(viii) also includes the requirement that:
If such information is unobtainable, a statement on the efforts undertaken by the
appraiser to obtain the information is required. If such information is irrelevant, a
statement acknowledging the existence of the information and citing its lack of relevance is required.
Refer to Standards Rules 2-2(a)(viii), (b)(viii), or (c)(viii) for related reporting requirements, and
to Advisory Opinion 1, Sales History for additional information."
So when does an assignment end? what say you?
