Lender Requests? (Telling Me How to do My Job!)

[Coty2003]

Maybe i am missing something here but I feel like we are being railroaded here over and over again. Maybe its me. Please help.

I received from a client the new request from a lender they use that all appraisals they receive for new loan requests will require an appraisal where the appraiser provides only comps within the last 90 days, urban location no more than 1/2 mile away, suburban no more than 1 mile, and rural no more than 5 miles, at least 2 of the sales MUST be verified in MLS as a qualified arms length transaction sale, and at least 1 current listing or pending sale in the appraisal.

This is in Florida a
where they consider all of Florida a declining market. I know they are trying to protect themselves as there are a lot of shady appraisers doing very shady work which leaves basically no public trust in appraisers anymore. At what point do they restrict us from doing our job and providing an accurate and fair market value since we basically are limited to only a few sales. In this case i think that in many cases we cannot provide an accurate value with these restrictions. I am thinking that i would rather not do business with this company as i know the appraisals will be incorrect and i will not do it as i am sure they will find someone to do it.

Any ideas and help would be appreciated. Please let me know if this is something common for other areas and if so how is this being approached with the lender that is hendering us from doing our job right?

 

[PropertyEconomics]

Looks like this is part of their scope of work request. You can either comply with the request or determine it to be so restrictive you cant provide a credible report you must simply decline the assignment. Which you do may be entirely dependant upon the property you are appraising.

 

[ZZGAMAZZ]

How 'bout This:

The Subject Is A 4-plex In A City With Few Recent (3 Months Sales) Sales.

Consequently I Went City-wide (5 Miles Approx And Into An Adjacent City Within 1 Mile) In Order To Include 7 Rental Income Comps And 6 Sold Comps, All 4-plexes. Market Rents And The Grm Range Are Very Narrow.

The FHA Client Wants 2 Additional Comps, Either 2- Or 3-unit Properties, With "minimal Adjustments."

I Called The FHA Underwriter And She Said That Because The Client Is A Mortgage Broker I Should Expect Conditions From The Client As Well As From The FHA Perspective--although This Is Not What The Forum Told Me To Expect...

 

[ZZGAMAZZ]

Never Mind.

I stopped caring earlier today.

HC does not mean Hypothetical Condition."

It means "W(h) Cares?

 

[Mztk1]

I'm in Florida too and I have clients with the same requests. When I am in a declining neighborhood and do not have sales within 90 days that leaves ME with a lot of questions because there are so many darn actives. So I figure, okay, if the buyers aren't buying in this neighborhood, why not? The answer is usually that a competitive project or section is pricing well below the project I am appraising and suddenly I have plenty of sales within 90 days. These sales, though from outside the area, are driving my market too and to not use them would be to provide a less credible analysis.

 

[Randolph Kinney]

How 'bout This:

The Subject Is A 4-plex In A City With Few Recent (3 Months Sales) Sales.

Consequently I Went City-wide (5 Miles Approx And Into An Adjacent City Within 1 Mile) In Order To Include 7 Rental Income Comps And 6 Sold Comps, All 4-plexes. Market Rents And The Grm Range Are Very Narrow.

The FHA Client Wants 2 Additional Comps, Either 2- Or 3-unit Properties, With "minimal Adjustments."

I Called The FHA Underwriter And She Said That Because The Client Is A Mortgage Broker I Should Expect Conditions From The Client As Well As From The FHA Perspective--although This Is Not What The Forum Told Me To Expect...

You are experiencing the importance of knowing who your client is, who the intended users are, and what are their guidelines - before you accept the engagement so you can agree on what is a reasonable, credible SOW.

I have turned down engagements because of the lender's guidelines of no comparable sale can be 6 months old or older. If there is only two comparable sales under 6 months old, you cannot complete a credible appraisal report given the client's needs.

 

[sbb04]

At least they're telling you this upfront. If you don't think you can do a credible report following their guidelines you have no choice but turn them down. What aggravates me the most is when these conditions mysteriously appear after the report has been completed.

 

[SANDY]

At least they're telling you this upfront. If you don't think you can do a credible report following their guidelines you have no choice but turn them down. What aggravates me the most is when these conditions mysteriously appear after the report has been completed.

You got that right!

 

[SANDY]

Maybe i am missing something here but I feel like we are being railroaded here over and over again. Maybe its me. Please help.

I received from a client the new request from a lender they use that all appraisals they receive for new loan requests will require an appraisal where the appraiser provides only comps within the last 90 days, urban location no more than 1/2 mile away, suburban no more than 1 mile, and rural no more than 5 miles, at least 2 of the sales MUST be verified in MLS as a qualified arms length transaction sale, and at least 1 current listing or pending sale in the appraisal.

This is in Florida a
where they consider all of Florida a declining market. I know they are trying to protect themselves as there are a lot of shady appraisers doing very shady work which leaves basically no public trust in appraisers anymore. At what point do they restrict us from doing our job and providing an accurate and fair market value since we basically are limited to only a few sales. In this case i think that in many cases we cannot provide an accurate value with these restrictions. I am thinking that i would rather not do business with this company as i know the appraisals will be incorrect and i will not do it as i am sure they will find someone to do it.

Any ideas and help would be appreciated. Please let me know if this is something common for other areas and if so how is this being approached with the lender that is hendering us from doing our job right?

Sounds like Provident's requirements-what you did not post was that they also say if criteria cannot be met, provide comments regarding why. Provident likes to extract a pound of flesh with a bunch of requests for info-I say they are merely trying to create the illusion that they are being diligent when in fact they likely don't have anyone that even reads the appraisal report in its entirety---some yo yo has a checklist to go by.
This is where our new policy requiring the name and phone number of the person generating the requests is going to be helpful.

 

[William K]

You are experiencing the importance of knowing who your client is, who the intended users are, and what are their guidelines - before you accept the engagement so you can agree on what is a reasonable, credible SOW.

I have turned down engagements because of the lender's guidelines of no comparable sale can be 6 months old or older. If there is only two comparable sales under 6 months old, you cannot complete a credible appraisal report given the client's needs.

MY BOLD

I have seen this sort of statement made before by appraisers so I'm not trying to pick on your post but I am questioning the concept of turning down engagements which are to restrictive.

I understand the argument of SOW, however how do you determine there are no COMPARABLE sales if you don't start the appraisal process?
In addition most of these are "Guidelines" not rules that must be followed in all circumstances regardless of market findings.
Prior to this real estate down turn there were appraisals performed that did not meet every lender GUIDELINE, but when deviated from the GUIDELINE there was an explanation as to why there was a deviation.
It did not necessarily make for a misleading report and in most instances when properly explained the lender / underwriter was able to make an educated lending decision.

I guess I am just wondering what is common practice now. What comes first, do you reject the job because it's to restrictive when requesting comps within 6 months or do you begin the assignment and upon pulling comparable data and you find no "Comparables" for the subject in the last 6 months do you then turn down the assignment?