REO sales and Stove/Utilities issue.

Discussion in 'FHA/HUD and VA' started by KJR2008, Dec 30, 2012.

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  1. KJR2008

    KJR2008 Junior Member

    0
    Jun 3, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Texas
    I have an assignment for a purchase, the subject neighborhood has a past year REO rate of over 80%, plenty of comparable sales. The subject's gas meter has been pulled, water and electrical services are on. The subject's stove is missing. With the high number of REO sales within the subject's neighborhood would it be wrong to use just REO sales from the neighborhood or go outside the subject's neighborhood and use at least one or two comparable arms length sales. The stove issue as I understand for FHA is if the stove is not a built in appliance but a slide in stove that it is not required. As for the gas meter, the report will be subject to gas meter installed and inspection of all mechanicals. Thanks
     
  2. CANative

    CANative Elite Member

    25
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    An REO sale (a property foreclosed on by a mortgage holder and then offered to the market) is an arms length transaction.

    Appliances are not included in the MPRs. The chances of happening on a property where a stove was ever part of the real property is so rare as to not be worthy of discussion.
     
  3. Terrel L. Shields

    Terrel L. Shields Elite Member

    41
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    If having a knife held to your throat is an arm's length transaction that statement is correct.
     
  4. CANative

    CANative Elite Member

    25
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    The "knife to the throat" is a matter for consideration with regard to conditions of sale.

    In the described situation there is no relationship between the parties outside of the transaction. In other words, arms length transaction.

    And don't post the definition again. I don't buy into your argument which parses out the verbiage "and no distress" or words to that affect.
     
  5. Marion Rhodes

    Marion Rhodes Elite Member

    7
    Feb 26, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Pennsylvania
    You could go outside the neighborhood and then make adjustments for the as-is condition, the stigma of being an REO and a location adjustment. Which might probably get your right back to where you were with REO comps. But hey, guidelines and definitions are guidelines and definitions and there is no precluding statement that says stigmatized properties can't represent market value.


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  6. CANative

    CANative Elite Member

    25
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    :clapping:
     
  7. J Grant

    J Grant Elite Member

    45
    Dec 9, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    The Appraisal foundation put forth an advisory opinion that REO and short sales may, or should be considered as comparables in order to achieve credible assignment results.

    Are there still a number of REO listings? What substitutes are most similar to subject among recent sales and listings in immediate area of most comparable homes?
     
  8. CANative

    CANative Elite Member

    25
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    If 100 REOs sold in 30 to 60 days and 5 outlier non-REO sales sold for twice as much in 180 to 220 days, which ones should be considered as primary evidence of market value?
     
  9. J Grant

    J Grant Elite Member

    45
    Dec 9, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    MV definition references the typically motivated buyer, well informed and acting prudently and in their own best interest.

    Who here believes the typically motivated buyer wants to pay twice as much for an equivalent property?

    Is a buyer that pays twice as much well informed and acting in their own best interest?
     
  10. CANative

    CANative Elite Member

    25
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Okay. Instead of twice as much how about 15% more?
     
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