All Forum Posts by: Brad S.

@Tam Nguyen

We have used Reliable Property Management since 2007. I originally found them through NARPM. We have been very happy and would definitely recommend them. Feel free to use my name if you go to them. Landlordaustin.com

@Brad Sand

I forgot to mention an example of trading a marginally performing and less desirable property for a better potential. I took advantage of a good market to exchange a property I didn’t want anymore, for one in a high growth, great potential market. And as a result, my cashflow increased, my property issues decreased, and the new property happened to increase conservatively over 50% in a little over a year!

@Ryan Short

Anthony, my vote is for this -what Ryan said.

Trading a marginal asset into a better situated one. A C class property to a B.

But, that also depends on your specific situation and goals. Do you need the money to do other things-potential investments, businesses , etc., do you need the current cashflow, can you reasonably unlock equity using a refinance or heloc, in order to use for the other opportunities, is your property in an area that you see good future potential still, etc. As I have read in other posts and have experienced myself - Usually, long term appreciation growth of a good asset will far outpace cashflow, but if that doesn’t align with your immediate needs and goals, it doesn’t matter.

Try not to get to caught up with the objectivity of the #’s alone. Just because a property gets a great % return, doesn’t mean it is a great investment for you and your goals. My first 2 rentals produced high cashflow annual returns - the 1st one was 45% coc, and the 2nd was 30%coc. Forward to 18 years later, when I was finally able to sell them for just about what I paid for them, and was happy to dispose of them. They ended up being more liabilities and anchors, holding me back from greater potential. And, contrary to popular opinion, rents don’t necessarily always go up over time, at least in less desirable areas.

And to illustrate how holding a good property can be hugely beneficial: I sold a few good properties 7-8 years ago, to get through turbulent times, even though I didn’t want to. Today, Rents have about doubled and values have much more than doubled, with me missing out on $700k+ of appreciation.

@Lacey Arslan

Basically, what they are telling you is that paying their rent is not their highest priority. And they are also assuming that you have little or no financial responsibility for owning the house, and you are perfectly capable and willing to pay for any of the house expenses (mortgage, taxes, insurance,etc) out of your pocket, without the benefit of the rent, essentially “you loaning them money.”

While, I am sympathetic, and have even helped tenants who have already demonstrated high responsibility and respect, toward me and my property, I have had more tenants put me, as a landlord, further down on their “list” of importance, even when some of them were in a better financial position than me.

Of course, it may be very important for them to fly wherever they need to, for the family obligations, etc., but, you need to decide if you want to subsidize that for them. As others have said, they at least should present a plan and have consequences if they don’t follow through.

It is quite amazing how tenants can become quite resourceful and miraculously solve those issues, when they are pressed to. In certain instances, I have found out that people thought it would be easier to deal with the late rent then asking family or friends for help, even when there were plenty of resources available to them.

That said, I’m all for helping out….if it’s deserved, respected, and I am able, but, I don’t run a nonprofit.

To clarify my last point.

The appraisal was most likely done for financing purposes (the Lender to evaluate a potential loan), so if the borrower is using the appraisal to negotiate a lower purchase price, they are using it (appraisal) for an unauthorized purpose. That's pretty hard to defend. ...even if the appraiser violated confidentiality.

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No, that wouldn't circumvent the appraiser's responsibility of confidentiality. Technically, in most lending situations, the Lender is the "client" (no matter who pays for the appraisal) and I, as an appraiser, have the duty of confidentiality. to the client (not the buyer in this case). This confidentiality is based on my license and performing duties in a professional appraisal capacity, beyond just this 1 client and 1 assignment.

By law (I think it's federal law) the Lender is required to provide a copy of the appraisal to the Borrower. Beyond that, the Lender may share the report or other info with anyone they choose. The Borrower may also share the report with anyone, since they are not bound by confidentiality. But, the appraiser is bound by confidentiality BEYOND just this one assignment. And also, the appraiser doesn't have the duty of confidentiality with the buyer, only with the Lender (the "client").

Another issue with the OP's position is that, each appraisal is developed for a specific purpose (i.e. refinance, purchase, date of death valuation, insurance valuation, estate planning, liquidation, etc), and this one was for a purchase. So, the appraisal was done for the client (the Lender), to evaluate the property for a loan risk. If there's no appraisal contingency in the purchase contract, specifically for the ARV value, then I'm not sure what legal standing there is.

The following is my interpretation/understanding as an Appraiser and Broker:
In purchase transactions with a lender, the appraisal is specifically for their risk analysis (loan decision), not to specifically protect the buyer from overpaying. The appraisal contingency in a purchase contract is an agreement between the buyer and seller regarding an appraisal result, but does not affect the original "purpose" of the appraisal (for a loan). It is kind of a derivative or "other use" of the appraisal, which is unauthorized by the appraiser or client. This is in contrast to a buyer directly engaging an appraiser to develop an appraisal for the purpose of evaluating the property to purchase. In that case there is a direct responsibility to the buyer. This usually happens in cash transactions, where no loan is used.

So, generally speaking the buyer can use the appraisal for whatever they want, but, if it used for a different purpose than what it was intended for, it doesn't hold the same weight.

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I honestly, don't mean to come across argumentative, but I'm guessing the basis for my "conclusion," wasn't clear.
My "conclusion" is based on my 25 years experience as a professional appraiser, along with many hours of confidentiality education and professional discussion, including directly with the source of the blog you quoted, so it based on some authority. I just want to be clear for anyone that may read or find this thread in the future, there is no gray area in what I previously stated.

So, to reiterate what I previously stated and to quote USPAP: If the appraisal assignment included developing an ARV, then "an appraiser must not disclose ... [those] assignment results to anyone other than the client, [or] parties specifically authorized by the client." In other words, the appraiser must not disclose the ARV to the seller or seller's agent, unless the client specifically authorizes it. And if the appraiser did disclose confidential information, theoretically, they may be liable for damages, if those damages can be proven, and if a judge would allow the Borrower (who is not the client) to bring such a lawsuit against the appraiser. But, as always, no one should rely on faceless posts on an online platform, from people that have no responsibility for the outcome, including my posts.


FYI - John, the blog entry you unearthed, only quoted the strict definition of "confidential information," and Mr. Harris was discussing confidentiality within a narrow context (different than the OP's situation). 

If the ARV was developed for and during the Appraisal Assignment, then the Appraiser most definitely cannot and should not provide that to any other party, except the client (the Lender in this case), without specific authorization that it is permitted to do so.

So, assuming the ARV was part of the Appraisal Assignment (maybe for a HML or other type of rehab loan), and the client did not authorize the Appraiser to provide confidential information to the seller or seller's agent, then YES, the Appraiser definitely violated confidentiality. There's no gray area, based on the information provided.

The gray area is whether it can be proved and if damages can be demonstrated. And also, if you, not the direct client, can bring the suit against the Appraiser. That is up to an attorney and judge to decide.

so, since nobody seems to be able to address your actual question, I'll take a stab at it.

Simply - Yes, it sounds like they violated USPAP, although, you aren't clear on what exactly the "details" the Appraiser offered are. Contrary to a previous post, it does not have to do with the type of loan, it has to do with the Appraiser. If the Appraiser is Licensed and is performing Appraisal Services, then he is bound by USPAP, period!

Ok, now, the Lender is typically the Appraiser's client, no matter who pays for the appraisal. So, without specific authorization, the Appraiser would not even be able to speak with you (Borrower) about the opinions or any assignment results (final value estimate, etc). They could only discuss certain facts (gla, etc), but it is not customary to even do that with a seller or seller's agent, to any great extent. I mean, I have on occasion told the seller and seller's agent the gla I calculated, if there was some anomaly or something, but that's about it.

I see a couple issues though:

1) proving/documenting that the Appraiser did indeed violate confidentiality. Having a detailed list of what they specifically said and to whom and the evidence to prove that. I suggest trying to get that in an email or recorded phone call. Someone can email the Appraiser and see if he responds with some of the pertinent details, or with a phone call.

2) proving actual damages. Sounds like you are only speculating that the Sellers might've dropped the price, and that the "confidential details," divulged to the seller's side, undermined your negotiation.  I guess a judge would have to decide that, based on any evidence you present.

I would contact a real estate attorney well versed with appraisal issues and see what their opinion is. If you are able to gather concrete evidence and sufficiently demonstrate your "damaged," then the Appraiser's E & O insurance policy may pay out. But, luckily, in my 25 years of appraising, I don't have any experience with those type of lawsuits (or any) against me or my work.

And yes, you could also file a complaint with whichever governing body oversees Appraisers in OR.

Hope this helps and please let me know if anything comes out of it.  Good luck!

@Scott Saling

I like Allied Schools. I use them regularly for my appraisal license renewal and used them for my agents and broker license. Thorough, well put together online courses and reasonable But, I haven’t use any others.