Verifying Sales

[residentialguy]

Why would an off the record short conversation with agent verify or trump what is in the written for posterity listing?

What exactly are you verifying? If they were lying in the listing or lying in the phone conversation.

IMO, it verifies nothing really.

Not about either of them "lying". You get more information. A listing showing the best parts of the house isn't lying...it's just not telling the whole truth.

 

[DTB]

Not about either "lying". You get more information. A listing showing the best parts of the house isn't lying...it's just not telling the whole truth.

That is NEW information, not verification of anything.

I would certainly not verify a potential tenant's application by calling them would I?

 

[ucbruin]

Why are you so confused about the term "verification"? It's validating that the information is true, accurate and complete. It's a confirmation.

The term "validation" doesn't confuse me, what confuses me is your reliance on redundancy-"validating" information on the listing sheet being "true" with the same person who placed the information on the listing sheet seems redundant to me. Do you really expect the agents to tell you that they deliberately placed inaccurate information on the sheet?

Listings are helpful, but it's a sale tool for the listing agent and believe it or not, they sometimes show just the good stuff from the good angle. Often, what appears to be a C3 is really a C4 when you get the whole scoop from the listing and selling agents. You seem so bent on taking the listing as full truth. Brother, you're a fool if you do.

This quote of your's seems to contradict your premise about calling agents. What makes you think the same agents who "show just the good stuff" will tell you over the phone that they deliberately "lied" on the listing sheet. Why am I a fool to believe the info on the listing sheet and you are not a fool for believing the originators of the info because you spoke to them on the phone? Who do you think places the "information" that you don't necessarily trust on the listing sheet? The listing sheet elf!

You have to call them anyway to find out about the conditions of the sale. Was there any relationship between the buyer and seller?
Sale price seem lower than most: Maybe there was high pressure/stimulus to sell... Bank pressure...Death in the family...Relocation, etc
Or the sale seemed high: Maybe there were some gifts included....Concessions involved? If so, what would the seller sell it for without them? Maybe it was due to the motivations of the buyer. Find out why they choose that property... Did they look at other properties?

I find it difficult to believe that you do this for every comp you are going to employ for every appraisal. But if you tell me you do, then I'll have to believe you. But REALLY!!!!!! How is it that you manage to whittle the 40 potential comps down to 8+ without 1st calling the agents, especially since you don't trust MLS listing sheet info? You are a hellva verifier. If I wore a hat I'd tip off to you. I surrender to your superior "validation" skills and work habit.

State boards have come down on appraisers that don't verify. If any of you aren't doing it, I suggest you make a change. :icon_idea:[/QUOTE]

 

[residentialguy]

That is NEW information, not verification of anything.

Verification is involved, too. The information that is on the listing is correct. The concessions, financing, etc is correct. Selling agent's verification is added as well as the listing agent's. When done, your information is verified and complete as can be.

I would certainly not verify a potential tenant's application by calling them would I?

It depends :icon_mrgreen:

 

[residentialguy]

The term "validation" doesn't confuse me, what confuses me is your reliance on redundancy-"validating" information on the listing sheet being "true" with the same person who placed the information on the listing sheet seems redundant to me.

Verification of conditions of the sale. And yes, they open up quite a bit. And it's not redundant: Hint: selling agent :icon_idea:

I find it difficult to believe that you do this for every comp you are going to employ for every appraisal. But if you tell me you do, then I'll have to believe you. But REALLY!!!!!! How is it that you manage to whittle the 40 potential comps down to 8+ without 1st calling the agents, especially since you don't trust MLS listing sheet info? You are a hellva verifier. If I wore a hat I'd tip off to you. I surrender to your superior "validation" skills and work habit.

LOL...you're burying yourself. How is it that you manage to whittle your sales down to the comps on your report???? I do what you do to whittle it down. The difference is that I verify my final report sales, as required...and you take the word of an ad as your only source and have not a clue as to if it there was a typo, lie, complete truth, motivations, concessions, etc.

Here's HUD's take:
Confirmation of Sales and Transaction Information
The appraiser must verify all market and comparable information used in the appraisal
process and is accountable for any information presented as "fact" used to develop the
subject property's value estimate. Verification ensures that the information is accurate and
meaningful and provides the appraiser with a firm understanding of market motivations and
trends. The goal of the verification process is to ensure that only information that
accurately reflects current market conditions and trends is presented and that meaningful
conclusions can be reached from this information.
During the verification process, it is necessary for the appraiser to gain an understanding of
the motivations surrounding the sale in order to:
- determine if the sale was arm's length and not distressed
- understand current market conditions that influence value

Whenever possible, interview a party to the sale to determine the expectations and
motivations for purchasing the property. Also, determine whether significant capital
expenditures funded by the seller were made shortly after the transaction occurred. If so,
determine whether the expenditure needs to be added back into the sale price to reflect the
actual conditions surrounding the sale.
The appraiser must verify sale information with the buyer, the seller or one of their
representatives (broker, lender, lawyer, etc.) . If the sale cannot be verified with someone
who has first-hand knowledge of the transaction, use public records. However, the
appraiser must clearly state how the sale was verified and to what extent. Do not use or
rely heavily on any sale that was not verified with an involved party or one of their
representatives because concessions have become more common in the market.


NOW your 1004 grid: VERIFICATION SOURCES ...(WHICH YOU CERTIFY TO BE TRUE)

INSTRUCTIONS BY FNMA
Sources of Comparable Market Data
Data and/or verification source(s) for each comparable sale must be reported on the appraisal
report form. Single or multiple sources for data and verifications are acceptable provided the
appraiser adequately verifies the comparable sales. Examples of data sources include, but are
not limited to, a multiple listing service, deed records, tax records, realtors, builders, appraisers,
appraiser’s files, and the Internet. The appraiser must state the specific data source and refrain
from using broad categories, such as “public records.” Data source(s) must be reliable sources
for the area where the subject property is located.
Information used to verify the data is obtained from a “verification source.” Verification
sources include, but are not limited to, the buyer, seller, listing agent, selling agent, and closing
documents in certain situations. Regardless of the source(s) used, there must be sufficient data to
understand the conditions of sale, existence of financing concessions, physical characteristics of
the subject property, and whether it was an arms-length transaction.
When comparable sales data is provided by parties that have a financial interest in either the sale
or financing of the subject property, the appraiser must verify the data with a party that does not
have a financial interest in the subject transaction.


And last, but not least, your SOW you certify to be true:
(3) inspect each of the comparable sales from at least the street,
(4) research, verify, and analyze data from reliable public and/or private sources

 

[ucbruin]

Verification of conditions of the sale. And yes, they open up quite a bit. And it's not redundant: Hint: selling agent :icon_idea:




LOL...you're burying yourself. How is it that you manage to whittle your sales down to the comps on your report???? I do what you do to whittle it down. The difference is that I verify my final report sales, as required...and you take the word of an ad as your only source and have not a clue as to if it there was a typo, lie, complete truth, motivations, concessions, etc.

Here's HUD's take:
Confirmation of Sales and Transaction Information
The appraiser must verify all market and comparable information used in the appraisal
process and is accountable for any information presented as "fact" used to develop the
subject property's value estimate. Verification ensures that the information is accurate and
meaningful and provides the appraiser with a firm understanding of market motivations and
trends. The goal of the verification process is to ensure that only information that
accurately reflects current market conditions and trends is presented and that meaningful
conclusions can be reached from this information.
During the verification process, it is necessary for the appraiser to gain an understanding of
the motivations surrounding the sale in order to:
- determine if the sale was arm's length and not distressed
- understand current market conditions that influence value

Whenever possible, interview a party to the sale to determine the expectations and
motivations for purchasing the property. Also, determine whether significant capital
expenditures funded by the seller were made shortly after the transaction occurred. If so,
determine whether the expenditure needs to be added back into the sale price to reflect the
actual conditions surrounding the sale.
The appraiser must verify sale information with the buyer, the seller or one of their
representatives (broker, lender, lawyer, etc.) . If the sale cannot be verified with someone
who has first-hand knowledge of the transaction, use public records. However, the
appraiser must clearly state how the sale was verified and to what extent. Do not use or
rely heavily on any sale that was not verified with an involved party or one of their
representatives because concessions have become more common in the market.


NOW your 1004 grid: VERIFICATION SOURCES ...(WHICH YOU CERTIFY TO BE TRUE)

INSTRUCTIONS BY FNMA
Sources of Comparable Market Data
Data and/or verification source(s) for each comparable sale must be reported on the appraisal
report form. Single or multiple sources for data and verifications are acceptable provided the
appraiser adequately verifies the comparable sales. Examples of data sources include, but are
not limited to, a multiple listing service, deed records, tax records, realtors, builders, appraisers,
appraiser’s files, and the Internet. The appraiser must state the specific data source and refrain
from using broad categories, such as “public records.” Data source(s) must be reliable sources
for the area where the subject property is located.
Information used to verify the data is obtained from a “verification source.” Verification
sources include, but are not limited to, the buyer, seller, listing agent, selling agent, and closing
documents in certain situations. Regardless of the source(s) used, there must be sufficient data to
understand the conditions of sale, existence of financing concessions, physical characteristics of
the subject property, and whether it was an arms-length transaction.
When comparable sales data is provided by parties that have a financial interest in either the sale
or financing of the subject property, the appraiser must verify the data with a party that does not
have a financial interest in the subject transaction.


And last, but not least, your SOW you certify to be true:
(3) inspect each of the comparable sales from at least the street,
(4) research, verify, and analyze data from reliable public and/or private sources

This is a pretty post but what's your point. It seems to me that appraisers are given wide latitude to "verify". Are you hitting 100% of the guidelines you've provided? Or do you just go through the motions and complete the report when agents/buyers/sellers don't get back to you?

I'm jealous of your ability to get the agents to open up to you and tell you the really skinny on the sales.

 

[hastalavista]

It really doesn't take that much time to (a) call an agent, and if no contact is made the first time, to then (b) email an agent.

Many here advocate for efficiency and optimization; for some, that results in being able to complete an appraisal in less than 3-hours. These efficiency experts (and I say that with respect) and the rest should be able to incorporate the ability to at least attempt to make contact with a principle to the transaction without too much extra time being spent (15-30 more minutes, maybe?).

Of course, if some can complete the appraisal in 3-hours, they may have to wait another 21 to 45 hours to get a response. If they have a commitment to turn the appraisal back within 48-hours, then they may not have the time to wait for a response.
But they certainly have the time to attempt to obtain a response.

Here is a truism: It is better to confirm or attempt to confirm the terms/conditions of the transaction with one of the parties to a transaction than not to confirm or attempt to confirm.

If that is true (I'm open to anyone who wants to argue it isn't), then why not include that confirmation-process (at least attempted, if not completed) in one's practice as standard operating procedure?

If one doesn't get a response by the time the assignment is delivered, at least one has a best-practices procedure in-place that attempts to get confirmation.
And, for those clients who allow for more than a 3-hour time-line/24 to 48 hour turn-time, confirmation with some of the market participants will probably be achieved!

I've posted that I try to get 100% confirmation from both agents. Sometimes I achieve that goal. Sometimes I don't. But I make the attempt. And, I get more information/better quality data by attempting (and achieving) than not attempting (and never achieving).
:new_smile-l:

(Full disclosure, which I've made before: I have an assistant who does a lot of the confirmation. A lot, but not all. But I've worked without an assistant. And for years, I did this myself. It is one of the last duties I let my assistant do. My last assistant was with me for 15 years. My current assistant, who worked with us previously, has now been my primary assistant for 3-years. But I still routinely call and email agents. And I call and email all brokers for my commercial assignments).

 

[Michigan CG]

.............Many here advocate for efficiency and optimization; for some, that results in being able to complete an appraisal in less than 3-hours....................

Here is a truism: It is better to confirm or attempt to confirm the terms/conditions of the transaction with one of the parties to a transaction than not to confirm or attempt to confirm.

...............I've posted that I try to get 100% confirmation from both agents. Sometimes I achieve that goal. Sometimes I don't. But I make the attempt. And, I get more information/better quality data by attempting (and achieving) than not attempting (and never achieving).
:new_smile-l:..........

woohoo

============================

It is very common for "appraisers" to cite source of information as the MLS and confirmation as the "inspection", that is if they really inspect instead of using the MLS photos. These practices are certainly not abiding by USPAP 1-4.

Many participants in this thread would never survive in the commercial world and the last time I checked there are not two separate USPAP documents, one for residential and one for commercial.

 

[residentialguy]

Again, my hat's off to you Dennis. You're a breath of fresh air in this do it fast & cheap age where common sense seems to be getting less and less common. The ax is coming down and they are planning to burn up the chaff in the appraisal profession. That's fine, it needs a good weeding anyway...we can get our fees back up where they should be. The ones like you and Mich will survive; That's why I like to keep you guys as a friend...so you can throw me a rope


UCBruin...Denis and I have given you enough to chew on. It's clear what they want. Appraisers are already getting disciplinary action for not verifying sales. If you want to go ahead and refuse, knock yourself out. No skin off our nose.

Cheers!

 

[ucbruin]

LOL...you're burying yourself. How is it that you manage to whittle your sales down to the comps on your report???? I do what you do to whittle it down. The difference is that I verify my final report sales, as required...and you take the word of an ad as your only source and have not a clue as to if it there was a typo, lie, complete truth, motivations, concessions, etc.

It's interesting that you say we both whittle down our comps in the same way. We both decide, before calling agents, what are the best comps based, in part, by the info on the listing sheets. When I do it I'm relying sole on "an ad" as my "only source" and that I "have not a clue". But when you decide which are the best 8+ sales, prior to calling agents, aren't you doing the same thing?

You maybe correct in your assessment, but until you make your calls and hopefully get an agent to tell you the "truth" you are doing the same thing as me. And you believe, hook line and sinker, that their verbal information is 100% correct and accurate. If you don't get a call back from the agents, do you not use a "good" sale because you couldn't verify?