Knowing When to Say NO
I wish I never took that assignment
One comment often encountered when investigating a complaint is “I wish I never took that assignment”. Another is “I should have walked away when I saw the property.” How can you avoid that uneasy feeling when completing an assignment?
If this is a typical residential mortgage transaction, things may go fairly smoothly. If the assignment involves appraising a property in a divorce, estate, tax appeal, or anything that might end up in litigation, you should meet with your client to assess whether there could be trouble ahead. One way to avoid this type of surprise is to not consider assignments as being routine. Each assignment regardless of purpose or intent has the potential to become complex. One of the first steps that you should complete is a thorough scope of work analysis.
Part of your scope of work analysis requires you to consider whether you are comfortable with the assignment conditions before acceptance. Clients will often expect a certain outcome from your appraisal to support their position, and if the client seems emotional about the outcome, you may want to consider whether you want to take the assignment. Attempts to influence you on behalf of the client and interactions with emotional parties that have a stake in the process can often be telltale indicators that the matter will be contentious. These actions alone might be reasonable support to walk away from the assignment.
Often the client will request a form type report as they believe that it will cost less, not understanding that the analysis required is the same no matter what form is used. Regardless of the format, it is your responsibility to ensure that the results are communicated in a credible manner. For example, a client may tell you to report the results of an appraisal of a manufactured house on the 1004 form, even though that is an inappropriate form. You should discuss this with your client and explain the type of report that will provide credible results. After all, as the appraiser you are the one to decide the Scope of Work for the assignment. If the client insists that you use an inappropriate reporting format, you should decline the assignment as this could point to unacceptable assignment conditions.
Another time to be careful about accepting an assignment is if the client needs the report in a hurry, especially over a weekend or in response to some immediate legal or administrative requirement. The client may tell you that another appraiser backed out and that they will pay you a rush fee. If you accept an assignment on this basis, make sure that you have adequate time and opportunity to verify the information you plan to use in your analysis. There are very few “appraisal emergencies”, and acceptance of an assignment that must be completed in a rush makes you no less responsible for the results.
Another comment that is sometime uttered by an appraiser looking at possible disciplinary action is, “I did it as a favor for a friend”. Often the licensee is told “I only need it for the file.” The reality is that once your report is submitted to the client you have very little control over where it might end up.
Competence is an ongoing requirement. Think about the assignment – are you competent to take it? If not, decline it, or figure out how you will attain competency. If the subject property is outside your usual market area, consider whether you are geographically competent to accept it. Ask yourself why a local appraiser has not taken the assignment. There may be something going on in this market area that local appraisers are fully aware of but that you won`t know about. Be sure to consult with local appraisers or real estate agents to talk about the subject and market area so that you don’t miss anything. What about the situation when you accept an assignment and then discover a problem? It could be that there are simply no comparable sales, the property is not as described, or the assignment is much more complicated than you expected. Your scope of work for any assignment may change as you begin your work. You should always remember that you as the appraiser determine the scope of work necessary for the assignment. Discovering an issue during the process should trigger additional scope of work discussions between you and your client to ensure that you return the most credible results possible. Should you encounter an issue that you cannot overcome with regard to competence or an unacceptable assignment condition, you can terminate the assignment. So many licensees will tell the investigator at some point they knew there was ample pause to walk away from the assignment, but felt that they could not as once they had accepted the assignment that they were bound to complete it. This is not the case. You can walk away, and in some cases you should. It is far better to risk the wrath of a potential client by declining an assignment than to complete an assignment for which you are not competent or to deliver results that are misleading.
Of course if you have an uneasy feeling about the client or the assignment, it is better to walk away early in the process in order to minimize the impact on the client. This also minimizes the likelihood of the client complaining to the Appraisal Board.
In conclusion, the Board encourages you to thoroughly consider all of the conditions known and those that might develop as part of any assignment. Each assignment, regardless of appearance, can be unique and has the potential to be complex. The Board expects you to thoroughly analyze each assignment and exercise good judgment with regard to legitimacy of the assignment and its conditions and your abilities as a licensee.
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The time to say “NO” to appraisal orders (every appraisal order) was in 2009. A few stubborn appraisers however continue to buck the trend by milking their spouse for money or selling off their retirement assets. A few more upticks in the interest rates should suffice as a means of drilling a holes through their hard skulls and pouring in this simple message: “Residential appraising as a profession is now a nonprofit business”.
I continue to be amused by the fact that potential green horns are smart enough to figure it out, yet battle hardened appraiser veterans cannot (or refuse to) take a hint.
Hey retired appraiser, do you do anything other than bitch and moan on this blog? For someone who is know retired, you really need to find a HOBBY! I ‘m a one man shop and I like what I do, I’m in my 30’s (had a gross income over 200K for 2012) I’m not making that up and happy old appraisers such as yourself got out of this business, (just because you did this for 30 years, did not make you a good appraiser, you just developed 30 years of bad habits. Non of my clients are AMC’s, they consist of local banks, credit unions, VA FNMA etc. Either adapt or die. My state of Massachusetts has lost 40% of the appraiser’s since 2007) and there is lots of work out there. I know what you are gonna say, I’m going to be reduced to a being a picture taker, as all this data is know being mined for fee blah blah blah!!!!!!!.SAVE IT. I work in a very complex market which is different than most of the country which are similar sub-divisions. I also list and sell real estate, so if eventually appraising is not profitable, I will adapt. This is after all what one does in America!
This is a great article. Every point is true to life, and I have made every mistake mentioned. One extra point is that it is even more difficult to turn down assignments when things are slow, like they have become in the last couple months. I had to really remember the lessons I have learned when I turned down a couple of appraisals this month for high end properties (for which there is no market at this time in this area) and for which I was offered a very high fee. I just kept thinking about how much I would pay to get out of the trouble that these appraisals would surely lead to. Tough calls to make, because even seemingly easy appraisals can lead to trouble in this cruel world.