Backseat Driving
A large lender has recently amended their appraisal policy regarding comparables.
The table below was taken from their general information Correspondent Bulletin.
The change greatly expands what and how an appraiser filters data. It appears as though this lender wants to stand over the shoulder of the appraiser to make certain that the filtering is to their liking.
It brings backseat driving to a new level.
Imagine driving someone to a destination and having to provide a detailed list of every possible route to this destination as you arrive. Imagine having to provide detailed routes that you never seriously considered or had already discarded.
Imagine this conversation: “Why didn’t you turn left at the corner?”
“Because it leads off of a cliff.”
“Show me.”
Irritating, isn’t it?
Gathering maps and determining the best possible route to a value destination is the job of a seasoned appraiser, right?
What does USPAP call this process?
Its called Standard 1:
In developing a real property appraisal, an appraiser must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analyses necessary to produce a credible appraisal.
It’s entirely up to you as professional appraiser whether you wish to hop in the car and hand piles of maps to the person in the backseat.
Most prefer to follow their own path.
By Lee Lansford – Illinois Appraiser Newsletters – Volume 4, Issue 6
- Hybrid Assignments, the Consequences - February 7, 2019
- Bankers Concerned About Appraisals - October 18, 2017
- Third Party Blues - July 19, 2017
It looks like this lender is not asking anything about standard 1, as they are not telling you which route to take, they just want you to describe which route was taken and WHY it was taken. That is a standard 2 issue in reporting what you did to arrive at the comparables used. It should not cause any change to your scope to simply tell the client how you got to the end result. If most appraisers would have been detailing the “why” in their reports for the past 10 years instead of saying “because I’m the appraiser”, then maybe the client wouldn’t be looking over our shoulders so much now.
Me – “Doctor I have a sore throat.” Doctor – “Here’s some medicine to fix you right up.” Me – “Doctor explain all of the medicine you COULD have given me but didn’t. List their names, both trade name and generic name, and why you chose not to use them.” Sheesh, I’m glad I don’t work for that nameless lender.
Would you ask the doctor “Why” you are giving me the medicine and what good will it do me? Or do you just assume that whatever your doctor says is always correct…. I am a real estate appraiser, but I am sorry to say that there are many appraiser’s that do not understand the concepts of value and if they can’t explain why they did what they did, then they might need to find a new job in this environment.
RE Appraiser, are you talking about Self-Contained Appraisal Reports which contains an extensive level of detail and significant amount of data (usually more costly) OR Summary Appraisal Reports? Why do you think appraisers need to explain everything and every little thing to the client??? Does your mechanic explain why he didn’t use a specific brand of oil or brake pads etc.? Do you ask him to make you a list of all possible products he could have used but didn’t and why? This is ludicrous!