misleading communication

Ask Henry

Partial Property Appraisals

Dear H2,

I recently lost a major client because I tried to tell them they were wrong. A valuation company, representing a bank, asked that all subjects with five acres or more ONLY be appraised with five acres, and anything over that should not be included in the appraisal. Also, if there were outbuildings, I was instructed not to include them in the grid, but only comment about their existence in the addendum.

I said I would only do this on a non-financial appraisal form. They refused, claiming as their reason that "not all appraisers have access to non-financial forms". After further research and agreement by various industry trainers and the Appraisal Foundation whom I consulted on the problem, the valuation company still said I was in the wrong, and fired me from their assignments. I lost thousands of dollars worth of work. Who is correct? And what can I do?

Launa Tierney
jobinlt@yahoo.com

Dear Launa,

There is nothing in the USPAP that requires that you appraise all parts of a contiguous property. In all circumstances, however, your appraisal would have to make it clear that your appraisal was of only part of the contiguous property. As far as what the valuation company is asking you to do, the answer is that the USPAP says that you cannot make an appraisal that intended to deceive anyone (for more details look in the USPAP index "Misleading Communication.") It appears from your question that the valuation company wanted appraisals that would mislead Fannie or Freddie, who would not buy these mortgages if the knew about the extra acreage. I think you should go over their heads (or threaten to go over their heads) and send letters to the chief appraiser of the lenders whom they represent, telling them you have lost their business because the valuation company wanted you to violate the USPAP.

HSH
askhenryharrison@revmag.com