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Old 03-08-2006, 09:52 PM
Marc Lamb Marc Lamb is offline
Join Date: Nov 2005
Location: Brevard County, Florida
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 29
Default Doing a review

And it has turned into much more than I bargained for. Here are just the facts:
1) I appraised this property in 1997 when it sold for $267,000. The property sold for $410,000 in April 2002. The property sits on a natural canal front site which the river splits the site and is about 100 yards from the river. The property was built is 1983 has 3,200 SF a large 2 garage and a mother in law area (700 SF) adjacent to the garage. The garage and the Mother in Law area are connected to the house by a breezeway. The home has a pool and 2 balconies and a porch. The land is asessed at $137,500.
2) The appraiser utilized all river front home sales. Okay, there is only 1 nearby area with canals (dredged with seawalls). But guess what we have a sale more recent of a canal front site than all of the river front sites and tha canal front site is 1/4 mile away. The canal front sale was $675,000. The 3 R/F sales range from 1.1 mil to 1.5 mil.
3) The high R/F sale is in close proximity but was built in 2000 and is, in my opinion significantly superior in quality. The appraiser incorrectly ststes that one of the sales is split by a roadway when it is in fact direct river. Adjustments were made for Direct river but none made to this sale because of the error.
4) The appraiser does not have access to the local MLS system. In the section that asks if the proerty has been listed in the past year it is correctly guestimated that it has not. Lists data source has previous appraisal? In the section for comparable listings states that no listings were considered? States that the bedroom and bath counts were estimated for the comps (all are wrong) because the property appraiser does not list room counts.
5) Cost approach W/O Marshall & Swift rating. Sites data source as appraiser files (you get the ideal).
6) No SOW.
7) At 1.2 mil. Client told me that this is the 2nd appraisal and this is the lowest.
8) After I had chosen comps (see question later) and saw where they were headed I called the Realtor who has listed and sold the house the last 2 times to ask his opinion of what he would list the house for and it was in the range that I am looking at. Needless to say it is significantly lower than the appraised value.

I have taken time (to much, my review fees are going up after this) and great detail and just wanted to get some helpful feedback.
I have 1 question. Standard 3 states in part that I can utilize sales after the Effective date to form my own opinion of value but cannot use them to discredit the appraised value. No problem. But #17 of the L/C states that I have utilized sales as of the appraisals Eff. date. Is it okay to use a sale that of home on a very similar site that I inspected that was under contract at the time of the appraisal and closed 2 weeks later? IMHO if MLS data would of been properly researched this pending sale should of been included as supporting data at the time due to the similar site characteristics, except it would of supported a much lower value.

Thanks, and I just saw there are 2 of us with the same name on here, just different spellings of the first name.
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Old 03-08-2006, 10:16 PM
Couch Potato's Avatar
Couch Potato Couch Potato is offline
Join Date: Mar 2004
Location: Chapel Hill
State: North Carolina
Professional Status: Certified Residential Appraiser
Posts: 14,075

Is this report on a 3/2005 version of a 1004? The certifications include one that the appraiser has access to needed data sources like the local MLS.

A little research of historical sales should have shown canal and river front sales have much greater differences than the adjustments used.

Your location is not in your profile, it might be helpful for responses from those in your area. 2000 vs 1983 is not a big deal in many areas, but it is a world of difference here in Central Florida.
Old 03-08-2006, 10:47 PM
Jeff Squire Jeff Squire is offline
Join Date: Jan 2005
Location: Maryland
State: Maryland
Professional Status: Certified Residential Appraiser
Posts: 192

I just recently completed a review where I submitted supplemental comps.
One of which was a "pending" sale as of the effective date of the original appraisal. It settled for the contract price several days later, which was still well before the effective date of my review. I also believed the appraiser should have considered it.
Old 03-08-2006, 11:20 PM
Rudy Canoza's Avatar
Rudy Canoza Rudy Canoza is offline
Join Date: Sep 2003
Location: California
State: California
Professional Status: Certified Residential Appraiser
Posts: 2,162

Originally Posted by Greg Myers
Is this report on a 3/2005 version of a 1004? The certifications include one that the appraiser has access to needed data sources like the local MLS.
Yep...the appraiser has access to needed data sources like the local MLS.
Old 03-08-2006, 11:20 PM
David Wimpelberg's Avatar
David Wimpelberg David Wimpelberg is offline
Join Date: Mar 2005
Location: Hamptons, NY
State: New York
Professional Status: Certified General Appraiser
Posts: 15,835

When I do reviews, I do not fault other appraisers for not using pending sales. Pending sales do take extra effort to find. The contract price, at least here, is not put into MLS until the property closes. Most of the time the realtor won't give out the contract-price information, and even then, it needs to be further verified.
Old 03-09-2006, 07:30 AM
Mary Tiernan Mary Tiernan is offline
Join Date: Dec 2003
Location: Michigan
State: Michigan
Professional Status: Retired Appraiser
Posts: 2,322

I have utilized a sale that closed after the effective date of appraisal under review only to support my revised value and show the actual trends in the area.
Old 03-09-2006, 08:28 AM
Wendy Wendy is offline
Join Date: Feb 2004
Location: Volusia/Flagler
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 4,133

I don't do reviews, but would comment on the actions of the appraiser being reviewed.

I, personally, always consider listed and pending sales when developing my opinion although rarely include them in the report. To not do so is a failure to examine the parts of the market relevant to giving a current point-in-time value: past & present.

If there is an active property with very similar characteristics to my subject, it is relevant to my report. After all, based on a reasonable exposure time, does not it's asking price indicate that the market refuses to consider it at any price above it's list? If it were a "steal" it would be sold asap. No way I would appraise a similar site for more than a current listing or pending.

-ps - With pendings, I often call the listing agent and explain that I am appraising a similar property. Many time they will tell me if the contract is within x% of the list without too much begging.
Old 03-09-2006, 09:50 AM
Karl Karl is offline
Join Date: Jan 2002
Location: Arizona City AZ
State: Arizona
Professional Status: Licensed Appraiser
Posts: 7,602

With ALL the NEGATIVE reviews that are posted on here, & the project that I am working on is it any wonder WHY lenders are going to AVM's??. I KNOW I'm talking to the Choir here BUT!! if we don't find some help from somewhere soon there wil be some GOOD Appraisers out of work. For Myself it's not it an issue (I'd prefer to have less work) but those youngens that are trying so hard to do it right, it's getting tougher & tougher.

From my inside source I still urge those on here to continue to take pride in your work & as hard as it is continue to do the job as GOOD as you can with the data you have. Use COMPARABLE SALES not just Sold Properties & be sure your Geographiclly competent.

There IS a small PERCENTAGE of Appraisers getting some severe punishments, remember if case is settled out of court it MAY not be public knowledge. Some that say they have gotten out of the business MAY have not had an alternative & the restortution of money or other alternatives of paying back to lender MAY not have been disclosed.
Old 03-09-2006, 10:22 AM
Marc Lamb Marc Lamb is offline
Join Date: Nov 2005
Location: Brevard County, Florida
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 29
Default Thanks

Thank you everyone. It is on the new form 03/05. That is why I pointed out the listing information and how it was reported. Yes I am in east Central Florida. I didn't mention things like the zoning being incorrect etc.. I hadn't noticed the L/C's yet as I have been bogged down in the other issues. Thank you everyone for responding.
Old 03-09-2006, 11:59 AM
Webbed Feet's Avatar
Webbed Feet Webbed Feet is offline
Join Date: Feb 2005
Location: City of Free Speech
State: Other Non-US
Professional Status: Certified Residential Appraiser
Posts: 12,245
Default Complex? Out of Scope?

Mr. Lamb,

I do not do very many reviews. .. But I know how to tackle a complex appraisal assignment, what the experience and licensing it is that it takes to do so. .. I know what is and is not complex.... I like a nice box of chocolates too!

I can somewhat compare your description to a place in my area called Oswego Lake... Oswego Lake has lake front properties and properties on canals to the lake that are off the lake. Canal front and lake front are apples and oranges. .. Due to this, and the overall value level of that market, I view any "Licensed" appraiser as probably being out of scope of their licensing in appraising any of those properties the majority of the time. .. Which brings up something you have not covered... How does the licensing laws in your area handle complex properties with a result over a million dollars?.. Even non-complex your appraiser under review came up with over a million... Did you consider if the appraiser is out of scope of their license by the appraiserís own value conclusion?.. If so, that is going to slam the door on that appraisal with no further cause needed and may get the clients attention faster than anything else.

Next, unless your area is WaterWorld and everything is on canals or river front, I am going to assume this is considered a fairly difficult assignment due to the influences. ... I would always (stress pitch on "Always") consider any pending or active listings I could lay my hands on that where the most similar to the subject property. .. It would be a five or six comp appraisal in any case if done by me, and yes, I would actually grid up any very good pending or active I could lay my hands on.... Regardless of an appraisal being for a refinance... We are NOT held to some silly effective date rule, we are opining from the viewpoint of our definition of market value... Which has a hypothetical, knowledgeable, buyer shopping for a property to buy... Would such a buyer probably know about and even have considered such a pending or active listing as alternatives?.. Most likely yes. . They represent current market activity... Ignoring the perfect comparable, in a complex appraisal situation, for no other reason than it has not closed yet is egregious. Especially, when this perfect comparable, even yet a pending sale, has a list price hundreds of thousands lower than what you are about to appraise your subject property for... Confronted with that it is certainly time to wake up and smell the coffee and / or find out just what the heck is going on with that pending sale and itís list price.

Your goal in the review / appraisal (I call it that because you are opining value, so you are doing an appraisal... By the way, remember under your review requirements you are using an effective date in the past.. so that is a appraisal that is Retrospective correct?..So it's "Market Value was".. not "Market Value is" and it is appropriate to examine sales data subsequent to the effective date. See SMT-3) is to protect the lender and investors. If you use two sets of comparable, one that was available to the prior appraiser in their normal course of development and shows they either did a good job or not, and a second set maybe not available to that appraiser (I.E. Listed after the appraiserís effective date) that strongly shows more proof your opinion is correct... then you are only doing your job. ... Regarding your final question. ... You posted "But #17 of the L/C states that..................." which I take as meaning the Limiting Conditions and Certifications of the review form... Which leaves me with a problem.. The new 2000 version 03/2005 single unit review certifications do not have a number seventeen .. they only go up to a number fifteen.... The old 12/2002 version has a number seventeen that is sales history of the comparable and does not say what you have posted.... Old desk review forms do not have a number seventeen.... What review form are you using?

From only your first post information, it appears that the original appraiser may have lacked the experience, geographical competency, data sources, and licensing to be appraising that property... If those are your conclusions there will not be much left to say.

Barry Dayton

Last edited by Webbed Feet : 03-09-2006 at 12:13 PM.
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