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  #1  
Old 10-05-2011, 10:16 PM
65076507 65076507 is offline
 
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Default Reo Help Please

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!
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  #2  
Old 10-05-2011, 10:33 PM
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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.
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  #3  
Old 10-05-2011, 10:37 PM
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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  
Old 10-05-2011, 10:49 PM
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Quote:
Originally Posted by 65076507 View Post
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.

no...that is not typical motivation, that's high motivation and undue stimulus to sell.
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  #5  
Old 10-05-2011, 11:48 PM
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Quote:
Originally Posted by 65076507 View Post
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.
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;
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  #6  
Old 10-06-2011, 12:53 AM
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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" ....
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  #7  
Old 10-06-2011, 07:23 AM
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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  
Old 10-06-2011, 07:27 AM
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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 by J Grant : 10-06-2011 at 07:47 AM.
  #9  
Old 10-06-2011, 07:44 AM
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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.
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  #10  
Old 10-06-2011, 07:47 AM
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Quote:
Originally Posted by timd354 View Post
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;
See Tim...this month it's typical.

God love the living breathing ever moving MV definition appraisers
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Last edited by residentialguy : 10-06-2011 at 08:59 AM.
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