A New Assignment, not a Simple Revision
Q: "
I completed an appraisal coming up on 6 months ago. A local bank was the client and the stated intended use was for purchase money financing. The loan rep recently contacted me and asked me to send a ‘revised’ report naming the borrower’s ‘equity partnership’ as an additional intended user. According to the client, the borrower has formed a partnership with someone else and they are planning to rehab the home for possible flipping down the road.
This was a significant change she was asking for and I told the client that I could not just ‘revise’ the report as she requested. I tried to explain that an appraiser needs to know the intended use and user prior to taking on the assignment. From what she told me, it sounds like the intended use has changed, as well. Further, I know that market values in this area have gone up over the past 6 months. I told her that in my opinion this was a new assignment requiring a new report and she was pretty angry. She said the report was less than 6 months old, she only wanted a revision and that this was just a grab for more money.
Considering how angry she was, I wanted to check with you. Do you agree that I’m right here?
A:
I absolutely agree. This equity partnership is an entirely new entity. I also agree that it sounds like the intended use has changed, as well. I think you have to stand firm on the fact that this is a new assignment.
With all that being said, is the local bank a good client? Are you concerned about preserving the relationship? You may be able to keep the business relationship in good standing if you agree to complete the report for less than your normal fee. Of course, that is your decision to make.