Which form best for estate appraisal?

[Michigan CG]

I use the Appraisal Institute form.

 

[CANative]

Narrative makes more sense to me. The home owner may or may not be familiar with forms, especially if using codes or abbreviations. And CPAs or tax attorneys may or may not be familiar with them. To me a narrative is more flexible and you don't get trapped with bad verbiage especially on things involving bank issues or market value vs. fair market value.

Most residential appraisers are not set up to write narrative reports that look and make sense. It would take me days and days to do one and I'd still hate how it came out.

 

[bnmappraisal]

Most residential appraisers are not set up to write narrative reports that look and make sense

Agree. I'll speak for myself, but that's me. I have not written a narrative before in my career and have only seen a few
I think many homeowners/agents/non-lending people (CPAs, attorneys) recognize a 1004 type looking report because that's what they get when they refi/purchase most properties

I use the GPAR form in my Total software. That seems to work well so far (knock on wood)

 

[Tim The Enchanter]

FWIW, I anticipated you using the slash client argument.

A useless sidetrack wank it was.

 

[Tim The Enchanter]

Now. What about the retainer letter?
You could call it an engagement letter I guess.
If you are going to marry them.

 

[Junior Member]

Now. What about the retainer letter?
You could call it an engagement letter I guess.
If you are going to marry them.

Here's a link to example engagement agreements, I've made available: https://www.valuationlegal.com/appraiser-engagement-agreements/
As several have mentioned, I also would suggest not using a 1004 or other GSE report form. I have seen appraisers who performed non-lending assignments on those forms disciplined by states (because of the inappropriate terms and certifications, unless completely edited) and sued (when a judge or other user such as the IRS wouldn't accept the valuation done on a 1004 with inappropriate terms and certifications). I know that many appraisers get by using a 1004 for divorce or other non-lending uses for many years or even their entire careers, but then there are those cases . . . when an appraiser's use of that form is challenged in court, the valuation is disregarded, the appraiser is disciplined, and/or the appraiser is sued because of the client's poor outcome resulting from use of the form.

-- Peter C

 

[Fernando]

I reviewed the GP form and AI form and I like the GP form. AI seems to be more work and redundant. Alamode's GP looks more like the 1004 form which many people are familiar with. I understand those sticklers with the courts do not approve the 1004. As an appraiser, the GP and 1004 are similar in sales comparison approach in determining value. Rather GP is better in that it reminds me of the old 1004 when I don't have to put UAD jargons. I like the average, very good, good, or excellent as more descriptive. It would be nice if Alamode would put a template forms to do an estate appraisal like having letter of engagement instead of pulling the necessary forms.

 

[bnmappraisal]

Here's a link to example engagement agreements, I've made available: https://www.valuationlegal.com/appraiser-engagement-agreements/

Thanks for sharing Peter, much appreciated. I've saved the link in my browser.
Side question - I have LIA and always enjoyed yours and Claudia's newsletters. Are you still doing them? Are they just online now?
Thanks - BNM

 

[CANative]

Here is a pdf of the template I've been using. It is in Word and I revise it for each assignment. I email it to the client. They can print, sign, rescan and send back or they can also just send an email by reply stating they agree. If they want changes, I just make them and use the same process until it's to our mutual liking.

I use the front half of a GP, NL (clickforms) or old 1004 for the front end (the part they can readily cope with in most cases) and the certs, assumptions, scope of work, etc., etc, is from another Word template that I customize for each assignment, copy and then paste into a signable comment page. In some cases I use Fair Market Value from 26 CFR §20.2031-1.

I make a separate statement at the end of the custom certs similar to this:

Note: The appraisal was reported using a commercially available form report with additional pages and exhibit addenda. Some of the pages have a response cell which is labeled "Borrower" and response cells labeled "Lender/Client." This is one of the limitations of commercially available appraisal report software. Please disregard any reference to a borrower or lender. This appraisal and the report are not intended for use in mortgage lending.

 

[Terrel L. Shields]

Here's a link to example engagement agreements, I've made available: https://www.valuationlegal.com/appraiser-engagement-agreements/
As several have mentioned, I also would suggest not using a 1004 or other GSE report form. I have seen appraisers who performed non-lending assignments on those forms disciplined by states (because of the inappropriate terms and certifications, unless completely edited) and sued (when a judge or other user such as the IRS wouldn't accept the valuation done on a 1004 with inappropriate terms and certifications). I know that many appraisers get by using a 1004 for divorce or other non-lending uses for many years or even their entire careers, but then there are those cases . . . when an appraiser's use of that form is challenged in court, the valuation is disregarded, the appraiser is disciplined, and/or the appraiser is sued because of the client's poor outcome resulting from use of the form.

-- Peter C

That's exactly why the narrative is the way to go. GPAR forms ... OK, but when the estate assignment (not for a bank), the definition of market value should conform to the IRS's "Fair Market Value" definition. For practical purposes, I see no difference between "FMV" and "MV" as far as the actual machinations of the approaches. Interesting to see what @Privateer thinks about the proper definition for a private appraisal.