Who ‘assists’ in Hybrid Appraisals
the appraiser shall identify any person who "assists" in the appraisal process…
NCREAA recently submitted a letter to the North Carolina Appraisal Board regarding hybrid / desktop appraisal products.
As a result of this letter, which highlights concerns raised by NC Appraisers, NCAB is forming an ad hoc committee to clarify, define and provide guidance on these hybrid / desktop products with respect to current North Carolina Appraisal Laws. Read the letter below:
The North Carolina Real Estate Appraiser Association (NCREAA) has recently received requests/inquiries from our members regarding guidance on assignments for “hybrid/interior desktop” appraisals requests they have recently been receiving. After reviewing some of the assignment conditions and engagement letters, NCREAA is requesting that the North Carolina Appraisal Board define and provide clarifying rules for the term "assists" as stated in the North Carolina Appraiser Act, Chapter 93E and corresponding North Carolina Board Rules.
93E-1-1-12 Disciplinary Action by the Board
(5) Failed as a licensed or certified real estate appraiser to actively and personally supervise any person not licensed or certified under this Chapter who assists the licensed or certified real estate appraiser in performing real estate appraisals;
21 NCAC 57A .0405 APPRAISAL REPORTS (a) Each written appraisal report prepared by or under the supervision of a licensed or certified real estate appraiser shall bear the signature of the licensed or certified appraiser, the license or certificate number of the licensee or certificate holder in whose name the appraisal report is issued, and the designation “licensed residential real estate appraiser,” “certified residential real estate appraiser,” or “certified general real estate appraiser,” as applicable. Each such appraisal report shall also indicate whether or not the licensed or certified appraiser has personally inspected the property, and shall l identify any other person who assists in the appraisal process other than by providing clerical assistance. Such identification must be placed in the body of the report. Appraisers shall personally affix their signature to their appraisal reports and shall not allow any other person or entity to affix their signature. Trainees are not required to affix their signatures to appraisal reports, but if they do so, they must personally affix their signature and shall not allow any other person or entity to affix their signature. Trainees and appraisers shall sign their reports with the same name and in the same manner as it printed on their pocket cards.
(e) Appraisers shall keep a log of all appraisals performed. The log shall contain the appraiser’s license or certificate number, the street address of the subject property, the date the report was signed, the name of anyone assisting in the preparation of the report and the name of the client. These logs shall be updated at least every 30 days.
NCREAA believes the term "assists" is clear as written in state law and would require any individual that provided material information (such as information obtained during the property inspection) to be “actively and personally supervised by the licensed or certified appraiser”. However, the new Hybrid appraisal reports instruct an unsupervised & unlicensed third party to perform the physical inspection of the property. The scope of the information provided by the third party inspectors differs (based on the orders we have seen), but their involvement in the appraisal process must be “actively and personally supervised” by a licensed/certified appraiser according to the state law. While the rule states that the appraiser shall identify any person who "assists" in the appraisal process, it does not appear to be as clear, and does not adequately allow enforcement of state law.
We look forward to receiving guidance and clarification on this issue as these “hybrids/interior desktops” are appearing to become more common in the market.
Please feel free to contact me if you have any questions.
2018 NCREAA President
I always wanted to move to North Carolina. I just wish reciprocity still existed. Sounds like they have their heads in the right place. I agree totally.
The term ‘assistance of a professional nature’ will simply be redefined by TAF to accommodate their masters. Alternatively, an opinion will be published parsing the English language in a manner that would have made Torquemada or the Marquis de Sade proud, so that property inspection will no longer be considered professional assistance.
Any appraiser who does these is headed for problems…..and no one drive comps….seriously !!!
If you are performing these “hybrid appraisals” and think it’s “easy money” as I’ve heard some say, YOU are part of the problem. Think….why do they even want a professional appraiser involved? Answer: to cover their behinds when it all goes to crap. Can you say “liability”? With so many untrained, unlicensed people involved in this garbage, who do you think will be held accountable when it falls apart? Appraisers, PLEASE STOP being talked into doing this mess.
Requesting this in Colorado. Thank you.
And from a recent thread, photo attached. Evidence these ‘appraisal related’ inspections cost as little as five dollars and are likely handled by inexperienced under qualified people.
The attached is an actual screen view of the inspectors work log, per a national home inspection service faq video, (linked in previous article here) and the $5.25 compensation for that service.
“The appraiser has relied on an unknown inspector whom the client and or agent of the client was either unable or refused to specifically identify, provide qualifications regarding, or assure competent service and oversight of..” I don’t know if that’s something I could include, but would seem to be necessary were their conclusions to be relied upon.
Like most aspects of valuation service and oversight, regulatory and accountability corrections take time. Appraisers that have been whipping these out are in for a cold surprise when the rules change and that enforcement will likely be retroactive.
A large National lender told me they are staying away from hybrids with a 10′ poll…..apparently they found out the appraiser is FULLY responsible for the appraised value….NO MATTER WHAT the inspector misses !!!
Been talking to realty agents about this, most of them have never heard of hybrids. Makes for a good routine talking point and agents will most certainly be able to provide better customer representation if they can help advise borrowers on the merits of hybrids and waivers. I make sure to mention these every time I meet agents in person.
ALL of us should be moving to educate borrowers. Not for specific transactions but generally. It’s to preserve our profession. More to follow in separate articles either by myself or others arising out of Appraiserfest.
Save these two links. Good forwarding links if you are able to peak a sales agents or mb person’s attention.
Re reading the post, the NC rules seems pretty clear to me…”…any assistance other than clerical assistance.” My own suggestion would be to suggest they consider limiting that ‘clerical assistance’ to routine daily clerical assistance conducted by employees or direct associates of the appraiser in his or her office.