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Questions About Review Work

Discussion in 'General Appraisal Discussion' started by Ray Miller, Jul 29, 2005.

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  1. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin
    When reviewing an appraisal what do you look for?

    How do you approach the work?

    What key points make or break an appraisal?

    What do you do about what I consider minor infraction of inspection? ie; calling a basement pourconcrete, when it con-block, a water heater that is a 40 gal. but the appraiser marked it a 50 gal. and so on.

    Missing the fact that the subject property is next to a commercial saw mill, things like that? That the wall between two of the bedrooms has been removed and the raw studing is showing. That the floor around the bathroom is wet and soft, that the basement is wet. Things that I consider major.

    Do you ever attack the original appraiser??
     
  2. Anne Matthews

    Anne Matthews Sophomore Member

    0
    Jul 13, 2005
    Ray, how is the reviewer going to know that the subject has concrete block versus poured concrete without an interior inspection or prior inspection? Most reviewers are going to work off an Extraordinary Assumption that the house is as described in the appraisal, unless they have evidence to the contrary (or reason to suspect that the description is incorrect).

    Missing the fact that the subject is next to commercial is a big deal.

    As for attacking on a review; I would hope NEVER. It is always the appraisal being appraised, not the appraiser, and any language that hints at an attack should be removed as it is not professional. For example, if an appraisal cherry picks sales that are inappropriate and omits ones that are, I would like to see something such as "The appraisal appears to have overlooked several proximate model matches within the immediate neighborhood that sold within the past two months" or the like instead of the ubiquitous "the appraiser omitted the best sales available and the appraiser should be hung from the highest branch" as it just reads better in terms of not putting the appraiser on the defensive. :p

    Just remember a review is typically an appraisal (going back to that opinion of value or not thing) and should be written and developed in a professional and unbiased manner.
     
  3. Nancy Wyatt

    Nancy Wyatt Senior Member

    0
    Nov 21, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    First I look to see why it landed on my desk.

    Then I go through the MLS comps that they used and Public records. Then I go back and pull all MLS for that area to see if they used the best sales available.

    Then re-grid 60% the time I'd say.

    Only after that do I go drive the subject and comps. Generally we have a good MLS system with photos that can give me most of what I need.

    I've only done 1 interior review to date. Will be doing more this coming year.

    I don't "attack" the appraiser-just the appraisal.

    I mention errors but don't "attack the report" unless the job is REALLY **** poor which is only a small percentage of what I see. What I mean by attack is not nasty, but just the way I word it which makes it clear that the report is misleading. I do not use the word fraudulent as I will leave that up to my client to decide.
     
  4. David R. Stevenson

    David R. Stevenson Elite Member

    0
    Dec 6, 2003
    Professional Status:
    General Public
    State:
    Tennessee
    Methodology of adjustments .... (if they are the best comps)

    Access (quality)

    Whats adjacent to it (chicken farms within 50 feet have been omitted in the past)
     
  5. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin
    Well, lets see. There are two ways. One in our area some part of the foundations can be seen above ground. A lot of owenrs approach me and want to know what I am doing taking pictures of thier home. At that point I intorduce myself verfing informaiton. At that point most will give you any information that you ask for.

    Now I am getting a lot of request that require an interior inspection with pictures on reviews.
     
  6. Randy Beigh

    Randy Beigh Senior Member

    0
    Jan 16, 2002
    Ray,

    Good topic.

    There is a new book by Henry Harrison called Review Appraisers Handbook. While I haven't read it, yet, it would be a good book to get, even at $49.95 price tag. 800-243-4545.

    The primary thing I look for is consistency. I took a class from Frank Harrison(not related to Henry) about 20 years ago and remember a line from him. "If you are going to lie, at least be consistent."

    The URAR form is redundant and that redundancy makes it easy to find the credibility of the report. All appraisals have errors in them. I will repeat that, all do. So, the small errors of the type that you mentioned above may or may not have reason to be mentioned by the reviewer, but at the max deserve no more than passing disclosure.

    There was a discussion, in this forum, a few weeks ago that an appraiser said the subject was a bungalow and the reviewer thought it wasn't. Sometimes, it's best to just not go there. Whether the house style is bungalow, ranch, etc is of such small consequence, by itself, that it will tend to diminish the results and credibility of the review. That is not what you want to accomplish and the lender didn't hire you to pick over such things. They need to know if their collateral is covered and the appraisal is credible.

    Intent of the review is not to have appraisers in pi**ing contests with each other. Some appraisers think they have to say negative things about the report and will search for petty issues. But, that is not what the lenders want. That should be obvious, but all to often, we hear or get rebuttals that indicate pettiness.

    I start at the top of the form and work down, just like the appraiser did. The value is the last thing I deal with. If the rest of the report is credible, value will fall into place.
     
  7. Randy Beigh

    Randy Beigh Senior Member

    0
    Jan 16, 2002
    Ray

    Since you commented on foundations and water heaters, it makes me think these mean something to you.

    What is the importance in the marketplace for these items? How do they effect value or marketability of the property? How does it change the credibility of the appraisal report if these are wrong?
     
  8. Anne Matthews

    Anne Matthews Sophomore Member

    0
    Jul 13, 2005
    Randy is dead on. And Ray, you are right, I didn't think of the foundation visible from the road, but then I also think this is getting too picky, as what the lender is looking for is generally whether they can make a lending decision based on the review. My eyesight isn't good enough even with glasses to see on a lot of properties whether it is block versus poured. I wouldn't get out of the car to look around the exterior, as it could be construed as trespassing by some homeowners, most of whom do not know that a review is being completed on their property and would be a bit upset.

    Good points, sounds very much like the voice of experience.
     
  9. Chris Harrison

    Chris Harrison Senior Member

    0
    Jan 15, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Utah
    Report & verify the information within the report.
    Identify & report the errors and omissions that effect the value conclusions (if any).
    Clearly state my scope of work and support my findings with concise facts.
    I never attack the appraiser!

    Chris
     
  10. David R. Stevenson

    David R. Stevenson Elite Member

    0
    Dec 6, 2003
    Professional Status:
    General Public
    State:
    Tennessee
    I would imagine that basements which have solid poured walls are more likely to

    be water tight and like most other things will effect the value substantially when

    compared to other homes of like or dissimilar design.

    I can imagine an entire sub-market of homes with solid poured basements ...

    Easy for a skippy to piggyback on these designs for an inflated value ....

    yes, Ray, I would go up to the house and start taking pictures or knock on the

    door and tell them what I am doing - but sneak a shot or two first if possible ...

    (Poured concrete - that could be solid poured block cells)

    Most appraisals that I review have issues - some don't - I give people a free pass

    on a multitude of minor things - Ray, poured concrete verses not poured - may

    not be a big deal - donno - we have few basements around here ....
     
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