Appraisers' Free Forum

I've come at this before, but the topic seems as timely as it ever was and no good answer has come up yet.

It seems to me that SFR appraisal and review SOWs are determined with very little informative discussion or communication between the appraisers, reviewers and clients. And as far as I know the investigators never contact clients or appraisers to figure out what the SOW was supposed to be. That seems to lead to a lot of confusion and second guessing. I addition appraising fr several reasons has entered a phase where the cheapest appraiser is often the most prized. I think a client should get what they pay for and to that extent the appraisal fee can enhance or contract the SOW. The more time an appraiser can spend on an assignment he more he/she should be paid and the more thorough the scope of work can be.

However, it seems too many of those who see an appraisal after the fact are free to impose the ultimate SOW when the client wanted the minimum or at least was willing only to pay for the minimum SOW. What gives? Is this something the ASB is aware of?

We had discussion thanks to Bill about GLA adjustment and the method that appraiser was using was not too well accepted around here, but it seems there are plenty of different ways of coming up with adjustments, but what is the standard? The market you say? Well how much time should be spent analyzing the market, what segments should be analyzed for the specific appraisal, how often should the appraiser analyze it, what evidence of the analysis should be included in the report and how much should the appraiser be paid for it?

I like GP's method of GLA adjustment because the support for it is right in front of the reviewer to read. GP is right. "Experience" is euphemistic spin for WAG. But let's face it clients are getting the fees down to where smoke and mirrors can be their only realistic expectation.

So how is it we demand near perfection (according to the eye of the beholder) of appraisers when they are being second guessed, but tolerate clients not paying a living wage for the perfection later demanded.

I think reviewers and investigators should be looking at the fees clients are willing to pay and figure out how much perfection can as a practical matter be delivered.

I spoke to an MAI hat I subcontracted with about the time that could be devoted to an assignment based on a fee. Unfortunately, the discussion arose when the assignment was almost complete in the context of very desirable, expensive and time consuming analysis that was simply impractical under the circumstances of the fee. The MAI took the well worn path of holding me responsible for completing work the MAI did not pay for and did not want to pay for. I was told that if I couldn't afford to do the work the MAI wanted I shouldn't have accepted the assignment. My gawd that is slavery or some other kind of exploitation. I don't know how to spell out everything in a SOW, but I guess that is the key.

It shouldn't be but USPAP allows it. Possibly has to. At some point someone will realize a report has an inappropriate or inadequate SOW and needs revised.

Here is the problem as I see it. Obviously, the SOW for review is and must be different than the SOW for appraisal. Different objective. However, if the reviewer is not aware of the SOW that was accepted by the appraiser and is in the position of assuming the SOW the system is being hijacked. A couple of critical elements in appraisal development and there fore the SOW are the fee and the turn time. If an appraiser accepts an appraisal with restrictions on either or both of those, her development is going to be something less than what it could be under different circumstances. It seems to me as the profession has adapted to the ever faster & cheaper pressures, that the ivory towers, while bowing to the needs of the banking industry, by far the major user of appraisals, have held the appraisers to higher standards than are necessary. If more time and money are needed to accomplish fundamental and primary analysis, particularly in erratic markets, and the clients refuse to permit it, then how can only the appraiser be rightfully held responsible by the authorities? That approaches schizophrenia.

If I understand the purpose of the current emphasis on SOW, it is to permit latitude and flexibility to accommodate a plethora of client circumstances and appraisal criteria. The departure rule is history for a lot of reasons, but it was an attempt to signal the reviewer as to what had been included in the appraisal development.

The ultimate standard for the appraisal to pass is now credibility, and that, as we now know, is in the eye of the beholder. It seems our reviewers and regulators have not been required to accommodate the arrangement between the client and the appraiser as to what is needed in order to make the result credible.

We are still in a spot where appraisals are being judged by people with limitations imposed by their own pet peeves. Not professional at all.