What’s All the Fuss About?
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There is no form that is USPAP compliant…
There have been numerous articles and discussions on blogs, social media and other forums concerning alternative products, mainly Hybrid Appraisals. The profession is truly divided on the topic. Some see it as a race to the bottom, others see it as another revenue stream.
Regardless if you are for or against completing these products, we need to remind all appraisers that there is no form that is USPAP compliant. The appraiser’s actions are what will make a report USPAP compliant. If the product is an online form, which most are, make sure you are able to add an addendum to add any necessary commentary for USPAP compliance.
Also don’t forget Virginia requires the appraiser to disclose the amount paid by an AMC within the report. So if an AMC is involved, you need to add some verbiage as to the amount you were paid. The VREAB has disciplined appraisers in the past for noncompliance of this consumer protection disclosure.
From Working RE Magazine…
“Craig Capilla, a trial lawyer with the Franklin Law Group who specializes in real estate appraiser cases, says that the single most significant issue that appraisers face when performing hybrid appraisals is the reliance on third party data, subject property inspection or otherwise. “An appraiser must have a reasonable expectation for relying on information that he or she has not personally observed. This is not a new requirement. It is something the appraiser must remember when developing any opinion of value. However, the risk with hybrid reports is that the appraiser gets too comfortable and fails to adequately address this issue,” says Capilla”
Further in the article Pat Turner, VaCAP President states:
“If you have unreliable and incomplete data, then the result will be misleading. Imagine all the things that might be missed or intentionally omitted by an inexperienced or unethical inspector: rear decks, rear stamped concrete patios, extravagant outdoor kitchens, not to mention all of the potential defects that might be overlooked or under reported by the so-called inspector. Imagine the omission of powerlines right behind the property, a collapsed roof on a detached garage behind the property, or other important information about the surrounding structures or neighborhood. I’m not going to trust a real estate agent who is willing to go by the house for $25 to tell me what condition the house is in. All of this is in the name of a cheaper product. It cheapens our profession and provides inaccurate and misleading information to the consumer,”
See the entire article here.
And sometimes it is the homeowner that rejects the hybrid appraisal. AppraisersBlogs published an article recently where a homeowner felt unsafe and kicked the unlicensed property inspector out of her home. The homeowner had some strong words for the lender who ordered this report. Well worth the read. See the article here.
HB 1453, changing the definition of evaluation, was heard yesterday in subcommittee. The subcommittee recommends the bills with a passing vote of 8-0. The bill will now move back to the General Laws Committee for a final vote. See the bill here.