Complaint / Real Estate Appraiser

Filed against Elizabeth Butler

Colorado Board of Real Estate Appraisers
1900 Grant St, #600
Denver, CO 80203

Attn: Enforcement

Re: My File Number -- 5038
Subject Property: 476 Kenton St, Aurora, CO 80010

This is a complaint against Elizabeth Butler, License Number CR00001772.

I have not contacted the appraiser. This matter is not under litigation.

Statement Section:

Elizabeth Butler has/is:

Violated the USPAP ethics rule.

Violated a standard(s) for the development or communication of a real estate appraisal, specifically standards 1 and 2.

Guilty of breech of trust in a business transaction.

Comments:

The appraisal report does not state the identity of the intended users, by name or type -- this is a violation of USPAP Standards Rule 2-2(b)(i) and SMT-9. Specifically, the following intended users should have been mentioned in the report: HUD.

The report does not address “reasonable exposure time” – this is a violation of USPAP Standards Rule 1-2(c) comment, SMT-6, AO-7, AO-8, and item (3) in the definition of market value. Exposure time is presumed to precede the effective date of the appraisal. Exposure time is not the same thing as reasonable marketing period, which is the amount of time it might take to sell the subject property at the concluded market value during the period immediately after the effective date of this appraisal.

USPAP Ethics Rule: An appraiser must perform assignments ethically. An appraiser must perform assignments with impartiality, objectivity, and independence, without accommodation of personal interests.

An appraiser must not accept an assignment that includes the reporting of predetermined opinions and conclusions.

An appraiser must not communicate assignment results in a misleading or fraudulent manner. [Note: Fraud = Intentional deception to cause a person to give up money. Something said or done to deceive.]

It is unethical for an appraiser to accept compensation for performing an assignment when it is contingent upon:

1) the reporting of a predetermined result (e.g., opinion of value);
2) a direction in assignment results that favor the cause of the client;
3) the amount of a value opinion;
4) the attainment of a stipulated result; or
5) the occurrence of a subsequent event (i.e., loan approval)

It is readily apparent that Elizabeth Butler violated all of the above cited portions of the USPAP Ethics Rule. Elizabeth Butler is a competent appraiser. Elizabeth Butler is also an unethical appraiser. She set out to produce a report that allowed the loan to close. She began the process with a requested minimum value, and worked backwards to support that figure. She did so in a manner that was as competent and as unethical as necessary to accomplish the primary objective – allow the loan to close.

Pursuant to USPAP Standards Rule 1-5(a) and 2-2(b)(ix), the appraiser is required to review and analyze the contract and the listing (market exposure) and to “summarize the information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions and conclusions.”

Pursuant to USPAP AO-1, the appraiser must take into account the listing [market exposure], the agreed price, and the pending sale of the subject. The appraiser’s failure to analyze these facts may exclude important information....(See AO-1, lines 32-39).

The report says the appraiser did review the sales contract. Page one of the URAR says seller concession is “N/A”. This is factually incorrect. The sales contract (copy attached) shows a seller concession of $10,000.

Was this an arms length transaction? The report does not say. Was this a related party transaction? The report does not say. If the contract is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required.

What about market exposure? Was the property listed on MLS? The report says:

“According to Denver Multiple Listing Service the subject property is currently offered for sale for $212,000.”

This is factually incorrect and/or misleading. The subject property was never listed on MLS. Was the property ever exposed on the open market? Any exposure at all? What type and how long? This should be explained in the report – not subject to speculation.

In the appraisal report, there is no mention of the appraisal procedures followed with regard to analysis of the sales contract, market exposure, the agreed price, and the pending sale of the subject – this is a violation of USPAP Standards Rule 1-5(a) and 2-2(b)(ix), and AO-1.

How does the market exposure (or lack thereof) affect the analysis? There is no mention of this in the report. According to AO-1, the appraiser is required to “consider” the pending sale of the subject. There is nothing in the report to suggest compliance with AO-1.

How could the appraiser conclude that the market value was $212,000 when it is clear that the seller agreed to accept $202,000? The report does not answer to this question. There is no reasoning and there is no rationale – this is a violation of USPAP Standards Rule 1-5(a) and 2-2(b)(ix).

Certification:

I certify that the statements and information supplied by me in this complaint including the attachments are true and correct to the best of my knowledge and belief.

Philip G Rice
11268 E Linvale Dr
Aurora, CO 80014
720-282-3376

Attachments:

Foreclosure

First Time - KeyBank 2004
Second Time - Ameriquest 2004
Summary

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