Arizona appraisers had no liability for aborted home sales
Three appraisers whose appraisals of for-sale properties were appreciably lower than the properties’ contracted sale prices were not liable to the seller whose deals fell through when lenders refused to loan the buyers’ requested amount, an Arizona appellate court has ruled.
Each of the three appraisers cited the Restatement (Second) of Torts in denying liability for any negligence.
The three cases were consolidated on Southwest’s motion because of their similarities.
USPAP’s top five misunderstood guidelines explained – Part Two
The Appraisal Foundation’s revisions to the Uniform Standards of Professional Appraisal Practice (USPAP) for 2014-15 took effect Jan. 1. John Brenan, the director of appraisal issues at The Appraisal Foundation, said that hardly a day goes by when the foundation doesn’t field a question about how particular USPAP guidelines apply.
In Part One of our story, Brenan talked to Valuation Review about two of the top five frequently misunderstood areas of USPAP. Here are the remaining three things appraisers need to know:
Developing a proper scope of work
Brenan noted that, while it is incumbent on the appraiser to cater to their specific client’s needs for each individual assignment, many appraisal professionals begin working on an assignment without developing a proper scope of work.
USPAP’s top five misunderstood guidelines explained – Part One
The Appraisal Foundation’s revisions to the Uniform Standards of Professional Appraisal Practice (USPAP) for 2014-15 took effect Jan. 1.
Even though the revisions were meant to alleviate confusion and promote appraisal best practices, there are still some often-misunderstood standards appraisers need to be aware of.
John Brenan, the director of appraisal issues at The Appraisal Foundation, said that hardly a day goes by when the foundation doesn’t field a question from an appraiser, appraisal management company (AMC) or a state appraiser regulatory agency about how particular USPAP guidelines apply.
While appraisers can become more familiar with USPAP guidelines by participating in USPAP update courses before revisions take effect, Brenan talked to Valuation Review about the top five frequently misunderstood areas of USPAP that appraisers need to know.
Appraiser may be liable to third party for inflated valuation
The Idaho Supreme Court concluded that an appraiser could be responsible for an inflated property appraisal for a home loan that ended in default, even though the lender who made the loan was not the original client who commissioned the appraisal.
The case, CUMIS Insurance Society Inc. v. Massey (No. 40002), was based on an appraisal of Steven and Valerie Hruza’s real property performed by Wade Massey, owner of Capitol West Appraisals. The couple was seeking a loan from Clearwater Mortgage, a lender who commissioned Massey to appraise the property.
In June 2007, Massey’s Summary Appraisal Report showed the Hruzas’ property to have a market value of $1.15 million. However, Clearwater decided to decline the Hruzas’ loan before even considering the appraisal. After Clearwater declined the loan, both Massey and Clearwater jointly agreed that the Summary Appraisal Report contained errors, that the errors would not be fixed and that Massey would not be paid for the appraisal.
Illinois appraiser not liable for overstating home’s square footage
An appraiser retained by a local tax review board had no liability to a homeowner for overstating a home’s square footage by more than 6,000 feet, an Illinois appellate court has ruled.
However, the Illinois Appellate Court (Third District) rejected the appraiser’s demand for sanctions against the homeowner for pursuing the professional malpractice lawsuit on appeal.
The case is Heyde v. Glassey (No. 400002).
The plaintiff, Raymond Heyde, bought a single-family home in Tazewell County, Ill., in 2000. Every year starting in 2003, Heyde had objected to his Tazewell County property tax assessments. In 2008, the Tazewell County Property Tax Review Board hired defendant Bradley Glassey, a residential appraiser, to provide a valuation on Heyde’s home.
Adaptation, best practices key to appraising in new era — Part Two
Adhering to conventional best practices
Appraisers need to keep up with emerging trends to be able to adapt to changing markets, but there are some best practices that never go out of style.
Having the necessary skillset to be able to arrive at appropriate value conclusions is a given — that’s why pursuing education and certification is essential; however, Bunton says it is also important for appraisers to be able to apply their knowledge from house to house and market to market as circumstances change.