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Withdraw From Assignment?

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Flakey

Senior Member
Gold Supporting Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
South Carolina
I accepted an assignment this week for an appraisal on an SFR for a refinance. Regular bank client with a typical SOW. Scheduled the inspection with the husband, no problem. When I arrive, the wife meets me at the door and asked if I knew the "situation". She explains this refinance is part of their divorce settlement. She said they just wanted the "fair value" but she thought the house was worth more than he did. I made no response and proceeded with the inspection. As I was leaving, the husband calls me and asked how it went. He then says the appraisal was for their divorce and just wanted the "fair value" but his wife thought the house was worth more than it probably is.

My take away was neither saw anything wrong with this approach and I got the impression someone at the bank was aware of the circumstances. I would like to think no one was purposefully trying to mis-lead me, the LO and their borrowers just don't appear knowledgeable.

So, at this point, I have to contact the bank and explain I need to re-negotiate the whole thing with a new letter of engagement detailing the new SOW, intended use and users, new fee and who was paying me for court preparation and testimony. Additionally, the new SOW and engagement spelling out the intended use and users would have to be made part of the report. Or, I could just withdraw (no charge) explaining this was outside the original SOW and I was not comfortable doing one appraisal for two entirely different uses and users. Which I'm not.

There have been instances, in the past, where I have been subpoenaed for a report done for another use/users and I can handle that. This is just the first time I've known going in and would like to handle this the right way and, perhaps, educate my client.

Any input on my reaction or something I missed is appreciated.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I accepted an assignment this week for an appraisal on an SFR for a refinance. Regular bank client with a typical SOW. Scheduled the inspection with the husband, no problem. When I arrive, the wife meets me at the door and asked if I knew the "situation". She explains this refinance is part of their divorce settlement. She said they just wanted the "fair value" but she thought the house was worth more than he did. I made no response and proceeded with the inspection. As I was leaving, the husband calls me and asked how it went. He then says the appraisal was for their divorce and just wanted the "fair value" but his wife thought the house was worth more than it probably is.

My take away was neither saw anything wrong with this approach and I got the impression someone at the bank was aware of the circumstances. I would like to think no one was purposefully trying to mis-lead me, the LO and their borrowers just don't appear knowledgeable.

So, at this point, I have to contact the bank and explain I need to re-negotiate the whole thing with a new letter of engagement detailing the new SOW, intended use and users, new fee and who was paying me for court preparation and testimony. Additionally, the new SOW and engagement spelling out the intended use and users would have to be made part of the report. Or, I could just withdraw (no charge) explaining this was outside the original SOW and I was not comfortable doing one appraisal for two entirely different uses and users. Which I'm not.

There have been instances, in the past, where I have been subpoenaed for a report done for another use/users and I can handle that. This is just the first time I've known going in and would like to handle this the right way and, perhaps, educate my client.

Any input on my reaction or something I missed is appreciated.

You were engaged for a refinance appraisal. You did not accept an assignment for use in legal proceedings specific to divorce. My only thought is that you should have been direct with the husband and wife when they started with their wants or needs.
 

nstanbru

Senior Member
Joined
Feb 19, 2009
Professional Status
Certified General Appraiser
State
California
The intended use for this assignment is for the refinance transaction with the intended user/client being the lender, period. I would never include the borrower(s) as additional intended users nor would I ever state an additional intended use for the appraisal. Sounds like they have already reached some sort of settlement wherein one party is buying out the other party. Very typical that the party who is paying thinks the house is a dump and the party getting paid thinks the house is an exquisite mansion.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Your take on this makes no sense. We have no idea what the people will do with the money in a refinance- One might use it to remodel their house, another to gamble way in Vegas. Not our business. These clowns made it your business by telling you about their divorce- you should have shut the conversation down....in any case it is still a refinance for the lender/client, correct? This couple did not engage you privately for a divorce appraisal. Perhaps let the client know about the conversation, to clarify for yourself. If you feel this conversation compromised your ability to do an unbiased appraisal, give it back. Otherwise, finish it, and hand it in like any other lending purpose assignment.
 

Flakey

Senior Member
Gold Supporting Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
South Carolina
Like I said, I don't believe I was being misled. However, also I don't believe it was appropriate to discuss what I could or could not do with my clients customer without consulting with my client first. That said, even if my client says just do it for the refinance, I can't ignore what I have been told.
 

Stone

Elite Member
Joined
Feb 1, 2002
Professional Status
Certified General Appraiser
State
Wisconsin
Your take on this makes no sense. We have no idea what the people will do with the money in a refinance- One might use it to remodel their house, another to gamble way in Vegas. Not our business. These clowns made it your business by telling you about their divorce- you should have shut the conversation down....in any case it is still a refinance for the lender/client, correct? This couple did not engage you privately for a divorce appraisal. Perhaps let the client know about the conversation, to clarify for yourself. If you feel this conversation compromised your ability to do an unbiased appraisal, give it back. Otherwise, finish it, and hand it in like any other lending purpose assignment.

I sort of agree. I’d mention it to the lender and remind them what you were contracted to do and that litigation wasn’t part of the agreement. I’d make sure your report includes language specific to this beyond boilerplate.

OTOH, I don’t understand the first part here, J Grant. Are you saying you always shut down owners who tell you about what they are doing with the refi money or just this specifically?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Like I said, I don't believe I was being misled. However, also I don't believe it was appropriate to discuss what I could or could not do with my clients customer without consulting with my client first. That said, even if my client says just do it for the refinance, I can't ignore what I have been told.

Again, if this conversation made you uncomfortable withdraw. Too late to take it back...dont' get involved with people at inspections, though imo what they plan to do with the $ or their personal lives should not concern us, sometimes we cant' help them babbling or talking-I've had a few borrowers break down crying to me as they (uninvited) told me some traumatic personal reason for selling/refinance...I sympathized with their plight but did not get drawn into any discussoin about value....then went back and did the appraisal like any other one.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I sort of agree. I’d mention it to the lender and remind them what you were contracted to do and that litigation wasn’t part of the agreement. I’d make sure your report includes language specific to this beyond boilerplate.

OTOH, I don’t understand the first part here, J Grant. Are you saying you always shut down owners who tell you about what they are doing with the refi money or just this specifically?

Asking about property condition or repairs is one thing, but I try not to get personal because we are appraising the property, not their reasons for borrowing, correct?

That said, I've had a few people cry or get emotional at inspections, I act sympathetic ( and I do feel for them), but at the end tell them the lender is my client and all I can do is appraise as the market sees it.
 

Riick

Elite Member
Joined
Aug 14, 2007
Professional Status
Certified Residential Appraiser
State
Delaware
I see no reason to decline the assignment. Neither owner pressured you for anything, both expressed need for Fair Market Value. If, sometime down the road his/her attorney contacts, or subpoenas you, for testimony, then it's time to talk to them about your fee for providing them a new retrospective appraisal (since current one is not for use by anyone but your client) and reminding them that:

(a) The court/judge wants to hear testimony only from an Expert Witness - which you can provide at your normal fee of $xxxx per day, or $xxxx per morning/afternoon.
(As a non-expert witness the only rational thing you can say is "Yes I did make an appraisal of 1234 Main St., as of xx/xx/xxxx.")

(b) The attorney wants you as a friendly witness, not a hostile witness. Hostile witnesses often have memory lapses, if I remember correctly.​

In short, ask yourself - Why throw away the time I've already invested, and the fee I've already half-earned, as well as potential decent dollars (and experience) as an Expert Witness?
.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
We hit that last week with a refi, refinancing the home in a divorce. Whenever we hit that, make it clear we are working for the bank, not for any other party. Just nod as they talk, no comments. If the borrower(s) ask, we make it clear we are not working for them.

OP, what I would do is in my statement of the client and user, make it very clear that this is not for legal purposes, no testimony, etc, then truck on.
 
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