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When's An Appraisal Not An Appraisal?

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Mike Simpson

Senior Member
Joined
Jan 30, 2002
The subject was raised earlier regarding Landsafe's three new ancillary products: These "new ancillary products" have me asking myself a whole slew of questions, and I was hoping maybe some of you could answer some of these for me...your insights would be greatly appreciated.

THE PRODUCTS

CUSTOMER SPECIFIC DESKTOP VALUATION / VALUEGRID (CSDV) - Pays $50 and averages 10-15 minutes to complete online. Turn time is 24 hours. This is being touted as a Limited Summary Appraisal Report which complies with USPAP requirements. They continue - A Limited Summary Appraisal Report MAY depart from USPAP Standards 1-3 and 1-4 according to the Departure Rule. The report compares three sales to the subject property using certain comparative data (e.g., distance between properties, square footage, number of bedrooms and bathrooms, sales price) that is critical in estimating market value of a property. The Desktop Valuation form requires no inspection or photographs of the subject or comparable properties.

APPRAISER PRICE OPINION / EXTERIOR - Pays $90
APPRAISER PRICE OPINION / INTERIOR - Pays $100

A.K.A. APO - Landsafe states that this product IS NOT an appraisal and DOES NOT support an estimate of market value for the subject property; therefore IT DOES NOT fall under the requirements of USPAP Standards 1 or 2. Further, the product is not intended to comply with USPAP, Appraisal Standards under the title XI of the FIRREA, Appraisal Standards of the Federal Financial Institutions Regulatory Agencies; or FNMA / FHLMA Appraisal Guidelines. They continue - the APO can ONLY be used for pre-foreclosure, quality control (QC), real estate owned (REO) and disputes of value. Under no circumstances can it be used for lending decisions. The form is completed by an appraiser with local market expertise in the community of the subject property. Three sold properties and three active listings are used to estimate price!

QUESTIONS

1) Who'd perform a CSDV for $50?
2) For those of you offering these services, can you really do them in 10-15 (every time)?
3) How can a 10-15 minute appraisal possibly comply with USPAP? I mean how can an appraiser exercise due diligence, much less meet all the other Standards Requirements in 10-15 minutes??? I can barely take a shower in that amount of time!
4) How can an appraiser make a decision on whether to depart from Standard 1-3 in 10-15 minutes? Read the comments under Standards 1-3 a - Comment: An appraiser must avoid making an unsupported assumption or premise about market area trends, effective age, and remaining life. The appraiser must at least consider the appropriateness of departing from Standard 1-3 right, or can they just offhandedly dismiss this Standard with Landsafe's permission?
5) This question is similar to #4--what if an appraiser determines the cost approach & income approach are applicable? This is what they're getting at isn't it--insinuating an appraiser doesn't have to perform the cost approach & income approach because, departure is permitted? BUT, what if these methods are applicable--isn't the appraiser then required to complete these methods as well? In 10-15 minutes???
6) How can an appraiser consistently not inspect the subject property or comparables and still be considered to be adhering to USPAP. Doesn't this fly in the face of Due Diligence?

APO'S

7) How can a licensed or certified appraiser use "three sold properties and three active listings to estimate price" without the report being considered an appraisal? I mean just because, they say it can't be used for lending purposes isn't a report completed by a licensed or certified appraiser (with a value estimate) still an appraisal, and if so wouldn't it have to conform to USPAP (at a minimum)?

Lastly, doesn't requiring an appraiser to use specific software, setting the fee and turn times meet some of the criteria of an employee? Does all of the IRS specifics have to be met or would a number of the specifics suffice to determine whether an appraiser is a subcontractor or employee. I know broker's worry about this topic and some have confided in me that they think the IRS may wade in on this issue.

Thanks for your time

-Mike
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
Landsafe Appraisal, other AMCs and multi-level marketing hucksters with chartreuse microbuses
can say anything is legal and USPAP complaint because they don’t have appraisal licenses to put
on the line. It’s our arse, not theirs. Let them find gas station attendants to do their dirty work,
I’m an appraiser. Furthermore, why do they continue to beg us to perform these services?
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Who does them? Does anybody know anybody that does? Are they just fishing? :eyecrazy:
 

Tawfik Ahdab

Senior Member
Joined
Feb 19, 2003
Professional Status
Certified Residential Appraiser
State
Oregon
Weasel words do an adequate substitute for an appraisal make. What is "price" but a value. Market valuations are estimates of most probable price and nothing more. To substitute price for value does not negate or sidestep the appraisal process.

If they are willing to twist the meaning of mere words, imagine what they do with comps and value...er, I mean..price estimates. Those garbage services will be recognized in due time by, and with great loss to, tjose who relyon them to lend real money.

Meanwhile, I'll continue to provide a professional service that these people cannot begin to match.

:gunfire: :gunfire:
 

Claude From NY

Senior Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
New York
"Who does them? Does anybody know anybody that does? Are they just fishing"

You would be very surprised as to who is involved in the production of these "valuation products". Many lurkers on these boards are probably familiar with them. Heck, I almost was snooker doodled when I took on a job as a "Senior Review Appraiser" and the next day after hire they started sending me a ton of desk reviews from all over God's creation that not only had to be completed in a couple of hours but they wanted a reviewers opinion of value. And if you disagreed with the value they expected you to find and grid 3 "comps". LOL! All this for the princely sum of Twenty Dollars!
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
I do a fair bit of work for Landsafe, and for the most part, like working for them, sure, their fees are a bit lower (since I don't work for their standard fees) but the processors there are actually pretty cool to deal with compared to most AMCs.....I was considering checking the box to add the new products to my "skill set", but then I thought about it.....I'm already too busy typing in reports at night as it is, to try to do "non-appraisals" without seeing the property for $50......and the APO thing...I can do a drive-by for double the fee and the same amount of work as their APO, and my E&O will cover me.....they won't cover the APO work........what I would like to ask them is this.....

If these aren't appraisals that are being done, then why do you need an appraiser to do them?? Until I go through the full appraisal process, I'll give the same opinion I give homeowners when they ask me during the inspection......"well, it's worth more than $100, and less than a million......" I get a lot of blank stares when I say that to them...wonder why :blink:
 

Linda M Lynch

Junior Member
Joined
Dec 12, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Heaven only knows what is passing as an "appraisal" these days. Just this evening I had a call from a loan officer in another community that wanted to know what I'd charge to do an appraisal in a community about 50 miles away. I have done quite a few appraisals there so I quoted him my going rate. Dead silence on the other end of the phone. Then he stutters; "We usually only get charged $50. Can't you do it for $50?" "Do you mean $50 for travel time?" "No, $50 total." When I got my breath back, I very politely told him that I could not accomodate him. I really wanted to ask him what color the sky was in his world, but restrained myself. Now I have been wishing that I had asked him just what in the world he got for a $50 appraisal fee.
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
$50 for an appraisal.........dear gawd, who in the hell would even think about doing one for that kind of fee.....the lowest anyone has ever asked me to do one for was $200.......at $50, even figuring an hour of travel time, and a lightning quick inspection, and really easy research, make it 3 hours of total work time......that means I'd be making $17 an hour......don't the kids at the fast food joints make that much asking me if I wanna supersize my value meal?? (not to demean fast food employees before I get the flames for saying that)........just out of curiosity, what are the going rates in your area??
 

Linda M Lynch

Junior Member
Joined
Dec 12, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
You asked what the going rate is in my area. That is what made this so strange. I wish I'd asked him more questions but he literally took my breath away. From what I've seen, most appraisers around her charge what is normal in the rest of the country and, believe me, it sure isn't $50.
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
MH-

Very good point--if they're not appraisals why do they need an appraiser to do them? Couldn't they get anyone who's not required to conform to USPAP, FIRREA, FFIRA OR FNMA/FHLMA?

By the way I think you made a very wise decision by deciding not to provide these services. Can anyone explain otherwise?

-Mike
 
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