Fundamental Risks in Doing Hybrids
Hybrids – As if another reason for not doing them was required!
Regular AppraisersBlogs readers are well aware of the controversy associated with doing bifurcated hybrids.
Extensive information as well as disinformation has been spread by the hucksters that promote them, and those few management or owner-appraisers of such firms that benefit from them.
This article is not to debate whether they should be done, or even if they could theoretically be done in anything resembling a USPAP compliant manner.
Instead, the intent is to caution all appraisers about the fundamental risks in doing these.
Please read the redacted findings of Virginia’s DPOR investigation into a particular case in which I was asked to file a complaint on behalf of an appraiser fearful of potential retaliation.
The immediate takeaways should be:
- No fee; but especially not $25 to $225 appraiser fees are adequate to properly complete one of these. That fact alone leaves appraisers at risk.
- All of the short cutting inherent in doing these, leave appraisers exceptionally vulnerable.
- The hybrid marketing and management system DOES NOT PRODUCE CREDIBLE RESULTS!
- To date, not a single USPAP compliant completed bifurcated hybrid has been seen by us or published as a sample of how they would really look like when done.
- Separate from the inconvenience & costs of hiring an attorney to deal with a state complaint, the original appraiser (OA) may also find him or herself liable to the buyer and or lender if the postulated size errors resulted in over valuation.
- AMC promises to maintain adequate work files and make them available simply aren’t demonstrated by the facts in this case.
- Limited SOW comments are not adequate protection
- Apparently, the third-party inspectors “deemed” to be reliable or credible, aren’t.
- See the state investigators concerns. These are the reality of state board complaints and investigations. DPOR appears to have been very thorough in their research and analysis. How many readers would or could have made some of the very same errors noted? Food for thought.
- Still think 100% paperless work files; partially maintained by others are all you need?
Please read the investigators findings in their entirety; keeping in mind of course that the OA has still has formal rebuttal opportunities. From the written statements though, they don’t appear to withstand real scrutiny.
Also note who the client and AMCs involved were. Those people are NOT looking out for appraisers!