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Reo Help Please

Discussion in 'Urgent - Help Needed' started by 65076507, Oct 5, 2011.

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  1. 65076507

    65076507 Junior Member

    0
    Jan 1, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    I got 3 REO jobs from 3 different AMC's. The first AMC tells me they want REO/Short Sale comps only. The 2nd AMC tells me they want a "normal" 1004 with adjustments made to discount the solds. The 3rd AMC tells me they want comps that settled within 30 days regardless of the type of sale as they want a quick-sale value. No lie these orders came over within 2 days with 3 different ways to obtain value. They all want quick sale value at the end of the day. Selecting REO sales only can lead to comps that sold in 30+ days, sort of defeating the purpose of quick sale.

    Can you guys give me thoughts/comments on how you typically go about REO reports. Maybe some DO's and DON'Ts. I am second guessing myself here because of these orders. Thanks!
     
  2. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    None of the orders are seeking "market value" .... which poses a problem for you if you are going to put them on a 1004 appraisal form which has "market value" as the preprinted value for the form.
    Sounds to me like each is seeking "liquidation value" and dont even know it ... I would have serious discussions with each.
     
  3. 65076507

    65076507 Junior Member

    0
    Jan 1, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    Prop Econ,

    If typical market time is 30 days or less then market value may be liquidation value. Do you agree? THen the form would be acceptable.
     
  4. residentialguy

    residentialguy Elite Member

    115
    Mar 24, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    Minnesota

    no...that is not typical motivation, that's high motivation and undue stimulus to sell.
     
  5. timd354

    timd354 Elite Member

    92
    Jan 11, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Maryland
    Are you really going to argue that the typical marketing time is 30 days or less or that 30 days or less is enough to meet the following portion of the definition of market value that is preprinted on the 1004?:

    (3) a reasonable time is allowed for exposure in the open market;
     
  6. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    Nothing for me to add ... especially if you wish for me to believe in this market that a marketing period of 30 days or less is typical .... actually its laughable for "market value" ....
     
  7. J Grant

    J Grant Elite Member

    Top Poster Of the Month

    187
    Dec 9, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    The problem is, you are letting clients, or sound as if you are going to allow clients to dictate how you develop your value. Far as I am aware, that is a no no, unless the chief appraiser at said AMC wants to co sign as your supervisor.

    I do work for some AMC's, and have never had them tell me what comps to use or one to adjust. One does have orders saying the client wants at least one REO comp if the subject is REO. If there is an REO sale that makes sense, I put it in, if not, I don't. There are a ton of threads on REO's, but ultimately, the appraiser has to decide what comps to use and why.

    The third request, where they deliberately ask for a quick sale value, not a MV, at least you can comply with that request, but then I'd imagine it would have to be on a diff form, a form that does not say puprose is to develop an opinion of MV?

    Normally, on an REO assignment, MV is developed on the report, with a 30 day value sometimes asked for as a second value on the REO addendum. Your client requests sound odd ( or are you confusing instructions on a second value on REO addendum with developing the MV on report?)
     
  8. J Grant

    J Grant Elite Member

    Top Poster Of the Month

    187
    Dec 9, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    If you have never done an "REO report", I'd turn these assignments down, because of the odd instructions ...(unless the instructions relate to the REO addendum only)

    I have done many REO reports, where REO is the subject...when the purpose is to develop an opinion of MV, the REO is treated like any other subject, you pick the best competitive comps etc. If some of the comps are REO's, well, there are a ton of threads about this on the forum. But aside from which comps you pick, just because the subject is an REO, the development of MV is the same. You are appraising the subject house as a house, not for who owns it. (in this case, a bank)

    The only difference in an REO report is the REO addendum, asking for a second value within a specific marketing time and cost of repairs and value as repaired (if it needs repairs). Without the REO addendum, the report is the same as any other 1004 or 1073 form appraisal.
     
    Last edited: Oct 6, 2011
  9. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    13
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    That was going to be my recommendation. 1004 with REO addendum. Appraise the property as you normally would and then give them a liquidation value on the REO addendum.
     
  10. residentialguy

    residentialguy Elite Member

    115
    Mar 24, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    Minnesota
    See Tim...this month it's typical. :rof:

    God love the living breathing ever moving MV definition appraisers
     
    Last edited: Oct 6, 2011
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