Verifying Sales

[Michigan CG]

...........I was told they only review it for technical issues, like will it past the automated program without getting flagged for not checking a box on the form......

And there lies the problem with the AMC model. They run the appraisal through a computer that makes sure all the boxes are checked and have the former french fry guy from McDonald's make sure that the 2.5 car garage is bracketed correctly but they cannot find basic USPAP violations.

Appraisal MANAGEMENT......not so much.

 

[hastalavista]

Ant there lies the problem with the AMC model. They run the appraisal through a computer that makes sure all the boxes are checked and have the former french fry guy from McDonald's make sure that the 2.5 car garage is bracketed correctly but they cannot find basic USPAP violations.

Appraisal MANAGEMENT......not so much.

I'm not willing to lay all the blame on the AMCs on this issue.
It is the lender who sets the level of "review/quality control" that the AMC is to perform.

Sometimes, all the lender is willing to pay for is the automated review. And, that's what they get.


I'll repeat myself again: The only two important players in this arrangement are the appraisers and the lenders.
Lenders determine what happens downstream.
Appraisers determine what they are willing to accept downstream.
AMCs are in the middle; they really have limited control and authority; they are forced to accept what the lenders require, and can only be successful if they can find appraisers to fulfill the lender demands.

Expecting meaningful change to happen from the middle doesn't sound probable (based on my perspective).

Full disclosure: I don't work for any AMCs, nor am I an AMC owner (which someone once accused me of being! ).

 

[Eli]

I thought the appraisal expense was on the HUD-1 as an expense to someone else other than the lender in most cases.

 

[Lost Cause]

I apologize if I used the term "Nobody". I will say this. I have not seen one appraisal where the verification included any of the following terms: "Buyer", "Seller", "Listing Agent", "Selling Agent", or "Outside Broker".

You have to hire the right people. I see such appraisal reports all the time.

With regard to our hiring process for appraisers, our company has no control over appraiser selection.

Well, I call bullsh1t on any lender making a ridiculous claim like that. If the appraisals you are getting are bad, the responsibility is yours (your company, not you personally).

 

[Tim Hicks (Texas)]

The AMC retains a portion of the fee our borrower pays for appraisal services. If they are not doing their job, their culpability is just as high as that of the appraiser, in that they are (or should be) acting as a reviewer under Section 3 of USPAP. As I mentioned before, I do not have enough data to determine the quality of work or quality of appraisers each AMC provides. Once I do, then I can determine what needs (if any) have to be addressed with the AMC.

This is the second comment in the same thread that shows that you have little grasp of the appraiser-AMC-lender process. AMCs don't do standard 3 reviews and if they do, they contract them out for another fee to the lender. VA appraisers don't name their fee, the VA has set fees for each region. Does the USPAP competency clause apply to appraisal managers? So, you are concerned there was no adjustment for one low sale on a duplex appraisal? Was the value on the appraisal reasonable? You want to chastise one comparable sale in an appraisal to determine the adequacy of the appraisal. If it effected the reasonableness of the value, then maybe it is important. Then again, maybe it was not. Have you ever been lied to about a property by a agent? I have had agents forget that I was the appraiser on a certain property and try to tell me how inferior it was to their new sale when in fact I knew their new sale was at best equal to their old sale. I don't even know why I respond to your posts. It is obvious that you want to concentrate on a small segment of the appraisal report when the one true question should be, "is the value on the appraisal reasonable?" I get it, I see lots of poor quality appraisals by experienced and inexperienced appraiser's alike. Who do you think trained the inexperienced appraisers?

Your solution should be to make your own supplemental appraisal guidelines for your AMCs (they all have them) and make them satisfy your needs. You can no make the VA do anything but there own guidelines, so accept it. You will soon find out that it will not make appraisers do credible valuations, it will just make them conform to your new guidelines with a new vagueness you never thought possible. When you start concentrating on the "credible value conclusions based on proper comparable sales selection and proper market reaction adjustments" part, you will find things might be more successful.

 

[Tim Hicks (Texas)]

As an example, I am reviewing an appraisal on a duplex. The appraiser provides three sales ($215k, $270k, $280k). My first reaction is why the one sale is so low compared to the others. The appraiser explains that these are basically the only three sales in the market in the past year. I do my research, and I agree with the appraiser; these are the most appropriate sales. Still, was there something else about the one sale that made it so much lower?

I found out who the listing broker was and sent an email. He responded in an hour of my email, and we talked about the sale for 15 minutes. I found out that the property required a complete interior overhaul that probably cost $35k to $40k. This information would not be contained in either the MLS or the public record. And you can guess that the appraiser made no adjustment for condition.

Quick question, did you verify the other two sales also? Is there a chance they needed overhauls? Did you bother to check? They are investment properties, after all.

 

[Vermonter]

Have you ever been lied to about a property by a agent? I have had agents forget that I was the appraiser on a certain property and try to tell me how inferior it was to their new sale when in fact I knew their new sale was at best equal to their old sale.

Exactly. I talk with agents and brokers on every report, but without a proper "agent/broker BS filter", is it really verification?

Luckily, our MLS now requires interior photos and lists the appraiser involved in the sale along with a phone number. They are a much better source for verification.

 

[Lee Lansford]

I've had the opportunity to ask more than a few appraisers--armed as I was with one of their appraisal reports in front of me--what their understanding is of "verification source" in the Sales Comp Approach of a Fannie form.

I have not had one tell me (which did not surprise me) the correct answer.

 

[McPheeters]

I have not seen one appraisal where the verification included any of the following terms: "Buyer", "Seller", "Listing Agent", "Selling Agent",


Sounds like you need better appraisers. If you would like, I can send you over a couple of hundred appraisals with those terms.....just sayin.

 

[Lee Lansford]

I have not seen one appraisal where the verification included any of the following terms: "Buyer", "Seller", "Listing Agent", "Selling Agent",


Sounds like you need better appraisers. If you would like, I can send you over a couple of hundred appraisals with those terms.....just sayin.

If you're responding to my immediate prior post, the appraisers whom I reference are not "my" appraisers in any sense of understanding the word.