This is Diana with ABC – The Appraiser’s Business Companion. Recently I was called on to assist an appraiser who began with, “I need help in finding a form to report an appraisal where no approaches to value are developed.” Hmm, what an interesting question. Why would you form an opinion of value without developing any of the three approaches?
The client said to the appraiser, “I want to know what my house is worth because I want to sell. I don’t need a big appraisal.” The fact the appraiser said that was the request gave me pause. My first thought was, the property owner(s) must have been regular users of appraisal services to even ask for what they consider is a One Page Report with no details of the analysis. I asked the appraiser if they’d inspected the property. The response was,” Barely; it smelled like mold when I walked in. I’m going to call it a C6”.
The appraiser wanted a form that gave a range of sale prices and call it an appraisal but couldn’t find a form that didn’t have a sales grid. I immediately went into mentor mode as I tried to help the appraiser understand the issues. The appraiser was perusing through the available forms while I was talking, interrupted and said, “I found what I needed. I’m going to fill it out and send it to you so you can help me know if I’m doing this correctly.” Issue 1-this isn’t a shared assignment. Issue 2-I’m not being engaged as a review appraiser. Issue 3- What does C6 mean to the owner? That’s a UAD matter which is lender oriented, not a private client issue.
I received two emails with two restricted appraisal report forms and a phone call, “Hey, did you get a chance to look these over? I’m not sure what the form is asking when it has two lines for the Definition of Value and one line for the Source of Definition. What am I supposed to put in those sections of the form?” I was shocked at the expectation that I was being expected to stop what I was doing and look over the forms and dismayed over the fact those questions were being asked. When I reminded the appraiser these were USPAP issues, I was asked, what page in USPAP? I conveyed the page numbers and the appraiser said, “I’ve not taken my USPAP yet, let me see if I can quickly download a copy. Hang on, I should be able to download it fairly quickly.” My immediate response was, “Are you telling me you’ve been doing appraisals for the past year and you’ve never even looked at the document?” The appraiser’s response, “Was there that much that changed?” Then an argument of sorts ensued as the appraiser told me I must be looking at something other than USPAP as their page number 22 was not reading the same. It turned out the appraiser was not looking at the page number of the document, they were looking at the page number of the electronic number of pages.
It became apparent the appraiser was woefully unprepared to do this assignment for many reasons, one of which was the lack of even cracking open the current USPAP and waiting until the course was taken to correlate it to this task/assignment. I do not know nor can I visualize any assignment beginning without going over the plan to solve the appraisal problem based on a review of development and reporting standards. When I asked why there were two forms with two different values, I was told that one was a “subject to” and the other an “as is” condition. When I pointed out the conditions were the same in both Appraisal Reports the appraiser stated it was the only way to get it done and they would fix that issue later.
My advice to the appraiser, be sure you understand the problem. It sounds like what you were really trying to offer was a range of probable sales prices as opposed to an appraisal. When mortgage lending is the primary way of doing business it’s easy to “skip” over what we think we know. Now and again it’s a good idea, especially when its an assignment we’re not accustomed to performing, to review the problem and to look through our USPAP to ensure we’ve covered the “must do’s”. With the advent of Christmas and the upcoming New Year soon to follow, it’s a good time to re-evaluate what we’ve been doing and to consider where we may find ways to improve.
This is Diana Jacob, and you’ve just had a tip of the week from ABC-The Appraiser’s Business Companion. Merry Christmas dear ABC members.