Appraiser hybrid work assignment

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Hybrid Appraisal Language

Q: Our office has been approached by a client about preparing “Hybrid” appraisals, so I asked to review a sample form from them. It looks pretty typical of others I have seen; I have to provide an estimate of value and the report must be USPAP compliant. I presume this work would be covered under my E&O policy, is that correct?*

My bigger concern comes from the fact that I am not doing the inspection. All of that information (photos, measurements, etc.) is provided to me by the client. The fact that I am basing my value, in part, on information that I can’t verify makes me nervous. Am I right to be concerned?"

A: You are correct that most policies would provide coverage for “Hybrid” or “Bifurcated” appraisals. You are also correct about the risk associated with completing these assignments.

You need to make it clear that you did not perform the inspection. Rather, you are relying upon the information that was provided to you and you have no responsibility for information that is incorrect, or incomplete. Most of the reports I have seen do not state this clearly, so be prepared to add disclaimer language. In fact, you might want to clarify that with your client, right up front. Provide some additional language you would like to add to your reports and see if there is any objection. Consider something like this:

“The appraiser did not personally inspect the property or take any of the photographs included in this report. Photographs and information about the property, including, but not limited to measurements, room count, condition, etc. were provided by the client. All information is presumed to be accurate and is being relied upon by the appraiser. The appraiser cannot verify the information provided and the appraiser assumes no responsibility for any inaccurate, incomplete, or incorrect information reported as a result of the property inspection.”

If the client does not want you to add the disclaimer language, I would advise you to turn down the work. In most cases the appraiser has no idea who is being retained to conduct the inspection. You should not have to be responsible for something you did not do.

The other thing to be mindful of is your obligation to maintain a thorough and complete work file. Has the client told you what fee they are willing to pay for you to complete these reports? Some appraisers are completing these reports for very low fees, like $25 per report.

Despite the abbreviated nature of the assignment, or the small fee you are paid, you still have to satisfy your record keeping requirements. Good luck.

*Ask your E&O provider if hybrid appraisals are covered under your policy.

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