Client wants more information

[David Sawyer]

Every time I read a post complaining about how a client/UW wants more sales I always wonder about the neighborhood description. If there are a limited number of sales in an area the appraiser should be writing a more comprehensive neighborhood and market conditions section of the report.

Dennis,
Since our area of Southwest Florida is a severe declining market, there are certain (unnamed) lender's underwriters that can not read. I have filled a complete addendum page with narrative on the general market, neighborhood, sub market, listing all revalant comparable sales, all "sales" and why they were not considered revalant comparable sales with minimum of five (5) revalant comparative sales (3 closed sales within the last 90 days, + 1 pending +1 active all within one mile radius of the subject) and the idiot that can not read still request additional sales. Even to the point of defining the neighborhood as an urban area and demanding comp sales within 1/2 mile radius of the subject.

Please tell me where an "urban" area is in Cape Coral since you are in nearby Port Charlotte?

 

[David Dietz]

I was originally taught that less was more, in fact over time I learned that was true. The less I put into the report the more phone calls I would receive. I have expanded my comments and increased my explanations of the market and conditions to fill the additional comments page as well as added additional sales and listings when appropriate or available. The appraisers around me said I was adding unnecessary work and time to my reports. Well I get less phone calls from clients than anyone Else in the office asking for more data and when I do it is usually because the UW failed to read the entire report. Dennis is right and too many do not elaborate the results of their research. Just because the form only has two or three lines for a comment does not mean anything that does not fit is not necessary. I would like to know how many actually think the pre-printed Scope of Work on the form is actually sufficient and do not include and Additional Scope of Work page.

 

[Fred]

And those, Vernon, that think when they are paid $150 for a job they only have to do $150 worth of work,

I'll plead guilty to that. Remember, the first driver of scope is intended use. If the client's intended use is to make a real property decision aided by $150 worth of independent third party analysis, and this is an institutional client - so be it.

As to the original post, it may not require anything more than about 7 calories of additional market analysis. That is, if you are just sending along comps 4-6 of the original analysis, a second full analysis is not necessary. However, the sticky part in my mind what AO-3 calls "simply a new assignment" aspect. Comps 4-6, like any other "comp check" (or more), are assignment results created as a consequence of an agreement with a client. So, for starters, you are probably going to want to incorporate the orignal report by reference to get as much of Std 2 out of the undertoe as possible. But the part that seems really tricky is explaining the intended use of the request for additional comps. Among other things, it seems like looking for comps to support a value that has already been determined.

 

[PropertyEconomics]

I'll plead guilty to that. Remember, the first driver of scope is intended use. If the client's intended use is to make a real property decision aided by $150 worth of independent third party analysis, and this is an institutional client - so be it.

As to the original post, it may not require anything more than about 7 calories of additional market analysis. That is, if you are just sending along comps 4-6 of the original analysis, a second full analysis is not necessary. However, the sticky part in my mind what AO-3 calls "simply a new assignment" aspect. Comps 4-6, like any other "comp check" (or more), are assignment results created as a consequence of an agreement with a client. So, for starters, you are probably going to want to incorporate the orignal report by reference to get as much of Std 2 out of the undertoe as possible. But the part that seems really tricky is explaining the intended use of the request for additional comps. Among other things, it seems like looking for comps to support a value that has already been determined.

The difference Steven is your work file will contain the other $ worth of information.

 

[Fred]

The difference Steven is your work file will contain the other $ worth of information.

I had a feeling that would get your attention. FWIW, I am not in the habit of leaving much, if anything, in the work file besides a copy of the report. Maybe I have an odd way of working, but I import right into the report document. It would entail extra steps to take things out of the report and put them into a separate fille.

 

[Michigander]

It sure saves a lot of headaches in the end if you explain it at the beginning. I see far too many appraisals with boilerplate neighborhood descriptions that could be pretty much anywhere in the country and do not lead the reader to any comfort level of that particular neighborhood. I do not think it is the fault of the reader as much as the writer. Remember, appraisers are technical communicators too.

Enumeration is not an excuse for a **** poor job, period.

 

[Blue1]

Every time I read a post complaining about how a client/UW wants more sales I always wonder about the neighborhood description. If there are a limited number of sales in an area the appraiser should be writing a more comprehensive neighborhood and market conditions section of the report.

Some of the markets I have seen described in this forum I would assume would come with a 2 or 3 page neighborhood and market condition. If that was done the appraiser could then just respond by saying “read the addendum” If there are a limited number of sales give the number of sales and write about EVERY ONE of them. Clearly the reader is not being convinced by the report that the appraiser has fully and completely researched the market.

Strong report (persuasive) writing skills are just as important as good research skills.

Neighborhood boundaries, description and conditions 'set the stage' for the rest of the report and comp selection. What I see in doing reviews is a lot of 'boiler-plate' neighborhood descriptions. Then the appraiser exceeds the defined neighborhood and ignores Market conditions in the SC grid with no explanation. Any good UW will see this as a red flag and ask for more information/data, etc.

 

[Pamela Crowley (Florida)]

Let me refer you to something I first wrote over a year ago:

http://appraisersforum.com/showthread.php?t=126687&highlight=puzzle

 

[Terrel L. Shields]

Summarize is the mandate...not provide detailed info. I don't mind providing that but for the $165 a shot reports, it seems a mite over the top. The lender ought be willing to pay if they want details.

 

[Dennis J. Black ASA IFAS]

Blue 1 hit the nail on the head. The first page sets the stage for the second page. As far as the client not reading the report that is something which is beyond the appraisers control, but none the less, the appraiser should be able to reply with "read the report".

As far as the "Summarize" issue I guess maybe I look at summarize a little harsher. What I see too often are a series of unrelated statements. I am smack in the middle of the meltdown and as I review reports written in 2005-2006 it amazes me that the writer of the report is making no meaningful effort to enlighten the reader. Just because there are several statements that does not mean (in my view) that the appraiser has summarized anything. The thrust of my post is that persuasive writing is a skill.

I will give you an example which is have utilized many times in CE classes.


The time since one or more of the "comparables" closed is more than six months. Appraiser writes

"A lack of recent sales necessitated the appraiser to use sales older than six moths"

That is a statement, not a summary of an explanation.

Why is there a lack of recent comparable sales. Are there no sellers? Everyone loves this area so much that few ever leave. That is a good thing. If there are no buyers and sellers abound that is a bad thing. Without the second statement, which is related, the first is just a statement. By providing the second part it moves toward a summation of the market.