conflict of interest
328) Appraising for Family Members
05/28/08
Dear Henry --
Is there anything in USPAP that states you cannot appraise a family member's property? I have looked through Standard 2 (Ethics) and FAQ about conflict of interest, but would like to get it clarified. I know I must disclose my relationship in the report and state that I do not have an interest in the property. Your help would be greatly appreciated. Thank you!
Kara Hall kara_hall@embarqmail.com
Dear Kara,
I don't think there is anything in the USPAP that specifically prohibits you from appraising a property owned by a family member. However, keep in mind there is a heavy burden on you to demonstrate that there is no present or potential future conflict of interest. I personally think it is a bad idea to do appraisals for family members.
H2
Is there anything in USPAP that states you cannot appraise a family member's property? I have looked through Standard 2 (Ethics) and FAQ about conflict of interest, but would like to get it clarified. I know I must disclose my relationship in the report and state that I do not have an interest in the property. Your help would be greatly appreciated. Thank you!
Kara Hall kara_hall@embarqmail.com
Dear Kara,
I don't think there is anything in the USPAP that specifically prohibits you from appraising a property owned by a family member. However, keep in mind there is a heavy burden on you to demonstrate that there is no present or potential future conflict of interest. I personally think it is a bad idea to do appraisals for family members.
H2
321) Personal Interest
05/19/08
Dear H2,
Can a Residential Licensed Appraiser in Georgia do his own appraisal and if so up to what value? Also how can a Residential Licensed Appraiser get FHA certified?
Ken kenjbrady2004@hotmail.com
Dear Ken,
The 2008-9 USPAP Ethics Rule-Conduct states: "An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests."
I think this prohibits making appraisals for yourself.
The FHA does not certify anyone. However, they do add appraisers to the Roster based upon an application process. The new FHA application requirements are fully explained in the Spring 2008 issue of REVMAG. Click here: www.revmag.com
H2
Can a Residential Licensed Appraiser in Georgia do his own appraisal and if so up to what value? Also how can a Residential Licensed Appraiser get FHA certified?
Ken kenjbrady2004@hotmail.com
Dear Ken,
The 2008-9 USPAP Ethics Rule-Conduct states: "An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests."
I think this prohibits making appraisals for yourself.
The FHA does not certify anyone. However, they do add appraisers to the Roster based upon an application process. The new FHA application requirements are fully explained in the Spring 2008 issue of REVMAG. Click here: www.revmag.com
H2
248) Wearing Two Hats
02/21/08
Dear Henry:
I'm currently renting a home that is listed for sale. (My family was temporarily displaced by the Malibu Wildfires.)
Should the owner ask me for an appraisal, is there any USPAP condition that would prevent me from rendering an opinion of value if I follow all objective guidelines in coming to my conclusion?
Rey Cano opofvalue@charter.net
Dear Rey,
It is always a problem when an appraiser trys to wear two hats. Someone could alway say that you appraised the property too high so that it would not sell and you would not have to move, or below the market so that you could make a bid on it yourself.
H2
I'm currently renting a home that is listed for sale. (My family was temporarily displaced by the Malibu Wildfires.)
Should the owner ask me for an appraisal, is there any USPAP condition that would prevent me from rendering an opinion of value if I follow all objective guidelines in coming to my conclusion?
Rey Cano opofvalue@charter.net
Dear Rey,
It is always a problem when an appraiser trys to wear two hats. Someone could alway say that you appraised the property too high so that it would not sell and you would not have to move, or below the market so that you could make a bid on it yourself.
H2
222) Broker vs. Appraiser
01/26/08
Hi Henry,
I would like to know your opinion on something. I am a certified appraiser and I do appraisals for an attorney for estate purposes, usually as of a certain time, i.e., the date of death.
I was wondering if you see any conflict if the estate is trying to sell the home and I tell them I am also a Realtor and I would be happy to help them out. Do you see anything wrong with that? Of course, I am a licensed Realtor in addition to being an appraiser.
I do not see anything wrong but just wanted to see if I might be missing anything.
Thanks so much,
Debbie Grimaldiappraisal@cox.net
Dear Debbie,
There is no absolute prohibition against an appraiser acting as the real estate broker for a property they appraise.
In my opinion, however, wearing two hats is a balancing act that is hard to successfully perform. You must be certain that everyone involved knows that you are wearing two hats and how you wear one has had absolutely no effect on how you wear the other one.
It's a good trick if you can do this.
H2
I would like to know your opinion on something. I am a certified appraiser and I do appraisals for an attorney for estate purposes, usually as of a certain time, i.e., the date of death.
I was wondering if you see any conflict if the estate is trying to sell the home and I tell them I am also a Realtor and I would be happy to help them out. Do you see anything wrong with that? Of course, I am a licensed Realtor in addition to being an appraiser.
I do not see anything wrong but just wanted to see if I might be missing anything.
Thanks so much,
Debbie Grimaldiappraisal@cox.net
Dear Debbie,
There is no absolute prohibition against an appraiser acting as the real estate broker for a property they appraise.
In my opinion, however, wearing two hats is a balancing act that is hard to successfully perform. You must be certain that everyone involved knows that you are wearing two hats and how you wear one has had absolutely no effect on how you wear the other one.
It's a good trick if you can do this.
H2
104) Conflict of Interest
06/15/07
Hello Henry,
I'm considering going to work for a mortgage company as a trainee loan officer/appraiser for this company. I know I can't do appraisals for my own loans, but is it o.k. for me to do appraisals for the other people in the office?
I would appreciate your helpful advice.
Mark Thompson appraisingsocal@yahoo.com
Dear Mark,
I don't think it is a very good idea. No matter how carefully you do the work, the possibility of conflict of interest will make it suspect.
H2
I'm considering going to work for a mortgage company as a trainee loan officer/appraiser for this company. I know I can't do appraisals for my own loans, but is it o.k. for me to do appraisals for the other people in the office?
I would appreciate your helpful advice.
Mark Thompson appraisingsocal@yahoo.com
Dear Mark,
I don't think it is a very good idea. No matter how carefully you do the work, the possibility of conflict of interest will make it suspect.
H2
44) Interest In A Property
02/03/07
Dear Henry,
Under USPAP, is an appraiser allowed to develop an opinion value on a property that he/she has either a direct or indirect interest in? I know that SR 2-3 suggests that the appraiser always attest to their independence and that SMT 10 also indicates they should have independence. However, I have seen a comment that suggests they may be allowed, under USPAP, to do the appraisal when they have an interest in the property, as long as it is disclosed.
Thank you for your assistance.
Linda Kraska linda.c.kraska@kc.frb.org
Dear Linda,
I am not aware of anything in the USPAP that permits an appraiser to appraise a property in which they have a present or future contemplated interest.
One of the most important things an appraiser has to sell is their objectivity. Even if it were permitted by USPAP (and I don't think it is), in my opinion it would be a bad idea to do so.
H2
Under USPAP, is an appraiser allowed to develop an opinion value on a property that he/she has either a direct or indirect interest in? I know that SR 2-3 suggests that the appraiser always attest to their independence and that SMT 10 also indicates they should have independence. However, I have seen a comment that suggests they may be allowed, under USPAP, to do the appraisal when they have an interest in the property, as long as it is disclosed.
Thank you for your assistance.
Linda Kraska linda.c.kraska@kc.frb.org
Dear Linda,
I am not aware of anything in the USPAP that permits an appraiser to appraise a property in which they have a present or future contemplated interest.
One of the most important things an appraiser has to sell is their objectivity. Even if it were permitted by USPAP (and I don't think it is), in my opinion it would be a bad idea to do so.
H2