Drive by appraisals

[The Argus]

Just as a general question, how do you all feel about 2055/1075 appraisals?

I am very thorough with my market research and interview home owners about the features of the Subject, but have never felt that the exterior only report is truly reliable.

I understand that when my clients order such a report it often has much to do with the LTV, borrower's financial situation etc. I just think the exterior only report has so many deficiencies. I am not a fan.

Thoughts?

 

[Karl]

The actual designer of the new Fannie Mae form (Name Escapes me) at the AZ seminar when these new forms came out said with the liability factor HE would NOT do Drive By's with this form BUT!! That is a business decision!!

 

[Mike Kennedy]

Ross Perot murmurs: the current 1004_05 and 2055_05 should be replaced by the OLD 2055 ......WITH....Interior.

 

[The Argus]

Ross Perot murmurs: the current 1004_05 and 2055_05 should be replaced by the OLD 2055 ......WITH....Interior.

Makes more sense. I just think the lack of an interior inspection leaves way too much room for error. There have been several times over the last few years where I have made an initerior inspection on a drive by assignment and included the photos in the report. I think it's more fair to the lender and the owner.

 

[Michael Tipton]

I use either the appropriate GPAR form or the 9/96 2055 only.

 

[Mike Kennedy]

Consideration:

The TYPICAL single family residential buyer is, in most cases, a potential owner-occupant in a particular neighborhood(market) about to make the largest investment in his/her lifetime.

While it may vary from market to market, I suggest the overwhelming majority of TYPICAL buyers .......will.....not.....purchase a home absent 1,2, or more personal walk-through "inspections" of the entire dwelling (and pertinent attached/detached above grade and/or below grade improvements).


As an Opinion of MARKET value ostensibly reflects the actions of local Buyers (when purchasing the most similar and proximate competitive properties who TYPICALLY follow the supposedly "old-fashioned" Common Sense Rule noted above), I dare to suggest that less than an interior visual observation (at a minimum) directly contradicts the actions of TYPICAL and Local Buyers.


As such, Opinions of Value based on less than Interior unavoidably, and intentionally, result in LESS THAN Credible appraisal reports in contradiction with the Ethics Rule.


Ask Mr. & Mrs. Jones on Main Street, they will most certainly agree.

 

[JTip]

I ALWAYS ask "old or new form". We do not complete the new 2055 for the old 2055 fee. The new form is a minimum three packs of chicklets. I have done less than a dozen new forms.

 

[The Argus]

I just don't think the drive by should be an option.

 

[RSW]

Makes more sense. I just think the lack of an interior inspection leaves way too much room for error. There have been several times over the last few years where I have made an initerior inspection on a drive by assignment and included the photos in the report. I think it's more fair to the lender and the owner.

DO you inspect the interior of your comps? What's the difference?

 

[Mike Kennedy]

Examples of Unacceptable Appraisal Practices​

The following are examples of unacceptable appraisal practices:

• Misrepresentation of the physical characteristics of the subject property, improvements, or comparable sales.
• Failure to comment on negative factors with respect to the subject neighborhood, the subject property, or proximity of the subject property to adverse influences.

Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, General Appraisal Requirements​

April 1, 2009