Who's Right?

[Dale Smalley]

Try the fnme one unit residental field review form 2000. If you agree skip sec 3. If you don't agree with the value fill out sec 3 that has a comp grid.
You are liable either way so do both a review and an appraisal.

 

[Richard Carlsen]

One of my early instructors in appraisal classes said it like this:

"If you've got a real estate appraisal license in your pocket and you make any comment relating to the value of any piece of real estate whatsoever, you've done an appraisal.....and you had better have the documentation to prove your conclusions."

Following this sage advice, if you are doing a review and you've disagreed with the value in the report, therefore, you've done an appraisal. By the same token, if you agree with the value in a reviewed report, you've done an appraisal.

Guess what?

A review is an appraisal if you agree or disagree with value. Maybe that is why they are called "Review Appraisals." They are only not appraisals only when you make no comment or express no opinion as to the value contained in the report.

Take all future orders on this basis and you will know what you are getting into.

 

[Michael Giampa]

please click on my 2003 USPAP link above and read standard 2-2 requirements for summary appraisal (which standard 3-2 refers to when a value conclusion is different for a review) and state how does anything written here so far about how to assign a new value (without doing an entirely new 2055 at a minimum) is allowed???

(the problem is the lender wants me to give them a new value for free, i said i would on a 2055 for an additional fee. they refused and said i was not in compliance with USPAP and (are trying) cancelled the order and fee. i said i am in compliance according to what i was just taught by one of the new USPAP teachers and can plainly read)

i'm now wondering who if any agree and if not what am i reading/have been taught wrong?

 

[Jo Ann Meyer Stratton]

Use the new Fannie Mae Review field review form 2000 (which is also an appraisal report), add anything that you thinks necessary--and then the typical description for any appraisal assignment--explain, explain, explain and then explain some more.

 

[liznindy]

Yes, Mike, you can give your opinon of value in connection with a review appraisal assignment.

If your client wants your opinion of value for the subject if you disagree with the opinion expressed in the appraisal report under review, provide it and charge accordingly. In fact, charge the same for all reviews whether you agree with the value opinion or not! Charge enough to perform the steps necessary to complete a review (see USPAP Standards Rule 3).

I always state in my reviews that the client and intended user of the review report has requested an opinion of value in connection with the review assignment. If you agree with the opinion of value in the report under review, you have essentially completed an appraisal, whether or not you utilized additional or different comparables.

You could use the two comparables in the original report (and provide a third one, if necessary) if you think they are the best available as of the effective date of the appraisal.

 

[Willie]

Richard said, "One of my early instructors in appraisal classes said it like this:

"If you've got a real estate appraisal license in your pocket and you make any comment relating to the value of any piece of real estate whatsoever, you've done an appraisal.....and you had better have the documentation to prove your conclusions." "

And hence the beauty of the Oral Report.

Can't comment on reviews. Sorry. Don't do them. Maybe I should. Seem to be to much headache.

 

[George Hatch]

To expand on Steven Santora's response above...

In the event that a reviewer is asked to express their own opinion of the value as stated in the original report, the reviewer is allowed to rely on and base their opinion on the original report to the extent that they agree with that report. If there are any areas of disagreement, the reviewer is not required to start from scratch and produce a new appraisal report; they can simply rely on those areas of the original report with which they agree and then separately develop/correct those areas deemed to be insufficient.

Let's take your case as an example. Let's say that as a reviewer, you agree with the sections of the original report that describe the subject property, including all of the front page, the diagrams, plat maps, location maps, etc. For whatever reason, you disagree with the factual description and use of Comparable No. 3 in the Sales Comparison, but not necessarily the final conclusion of value. In expressing your disagreement with this item, you are required as a reviewer to explain why you disagree with that comp (in this case you say it isn't a sale). If that affects your opinion of value or if it so significantly detracts from the reliability of the rest of the appraisal report, you may not have enough information at hand to develop an opinion on the value conclusion. Just because the client wants one anyway in no way mitigates your problem of lack of reliability.

If you decide to disagree with the analysis and the final value conclusion, and present your own version of things (in other words, to "fix" the appraisal), you need to develop that different opinion by presenting and analyzing the extra data using the same reporting standards as the report being reviewed. In this case, an extra comps page with one or two more sales gridded out and the appropriate reconciliation, along with an accurate scope of work for your review report would be sufficient to cover the bases. No need to do a new appraisal report from scratch.

If there is enough doubt of the overall reliability of the original appraisal and appraisal report because you have evidence of dishonesty, you have the option of recommending to your client to completely reject the appraisal (because its incurable) on those grounds and expressing no opinion of value in your review. It's when you do express your opinion of value or agree/disagree with the value conclusion that you are held to the same reporting formats as used in the original work.

 

[The Bob]

I agree with Steve S and George H. This is really a Scope of Work issue. The AI had a white paper on this and other topics that was good at explaining what was required. I tried to locate it, but it is now a "members only" download. Used to be available to anyone. Basically you are doing two assignments. 1. the review; 2. a new opinion of value if you disagree with the one in the reviewed report. So, to answer your question, the other guy was right.

 

[Fred]

Mike writes,
read standard 2-2 requirements for summary appraisal (which standard 3-2 refers to when a value conclusion is different for a review) and state how does anything written here so far about how to assign a new value (without doing an entirely new 2055 at a minimum) is allowed???

Mike,
Check my previous post. You are incorporating the orignal report by reference. That report is already presumably a "summary" (whatever that means) of most of the information.

Unless, you want to dispute the square-foot measuremeans or wainscot material or something, there is no reason for you to re-invent the wheel. Other than the "heading" material like your name, cert number, work reviewed, etc. , you could come up with an alternative value in as little as a sentence or two, using the incorporated "summary" report under review as substantiation and thus have a "summary report."

 

[GeorgiaBoy]

I just finished a course on USPAP this week and this issue was specifically addressed.

The following statements do not constitute an appraisal as defined by USPAP:

1) The value conclusion stated in the appraisal report is (or is not) adequately supported.

2) The value conclusion stated in the appraisal report is (or is not) appropriate and reasonable given the data and analysis presented.

Conversely, the following statement does constitute and appraisal"

1) I concur (or do not concur) with the value conclusion.

The issue appears to be a scope of work. Did the client specifically ask for an appraisal review? If so, an appraisal review assignment is well defined by USPAP and does not require and opinion of value by the review appraiser.

That being said, the client can request that an opinion of value be made and in that case it would be considered an appraisal. My fee for such an assignment would be higher than it would be for an appraisal review.