What Do You Consider To Be Data Sources And Verification Sources?

[residentialguy]

BTW, who do you contact to confirm the sale? This is supposed to be an unbiased source, correct?

No, that's incorrect. If if the agent of the subject where to give you information on a comp, that would be a biased source.

 

[Have Laser-Will Travel]

No, that's incorrect. If if the agent of the subject where to give you information on a comp, that would be a biased source.

Who is the person without a financial interest in the transaction that you use to confirm?

 

[residentialguy]

Who is the person without a financial interest in the transaction that you use to confirm?

You call the agents of the comps. They do not have a financial interest in your subject.

 

[Tom4value]

The amount of posts here and some of the content tells me that either a) some markets are much tougher to verify data than mine or b) people are trying to reinvent the wheel. In my market:
Verify sales price/date- registry of deeds website. Last I heard, they don’t lie.

Sales concessions- MLS. In my market, for about 10 years now brokers have been “strongly encouraged” to put sales concessions in MLS. The powers that be realized that after closing, this is not confidential information, especially if brokers gave the info to any appraiser who had the gumption to ask for it for years.

Condition or anything that may be out of whack- call the listing broker. Oh, wait. “Brokers lie!” Really? Over my career I have met and gotten familiar with literally hundreds of brokers. Not one of them has confessed that in their sales meetings that they are told to lie to appraisers. Sure, you may find the odd broker who hates appraisers. However, I have found that the vast majority of brokers, and ALL of the successful ones, regard appraisers as business partners, not adversaries. Indeed, I regard brokers as a valuable tool (“tool” in the good way) in my knowledge of my market. When I schedule appraisals, I add about 10 minutes to my scheduling to talk to brokers about the market. Not only does this give me info but when I call them later for info on a comp they know who I am and have no problem answering my questions.

 

[Have Laser-Will Travel]

You call the agents of the comps. They do not have a financial interest in your subject.

Thank you.

 

[Michigan CG]

Using your logic...
Wouldn't it be necessary (and logical) to verify with both the seller and the buyer regarding the "motivations" of each of them and the their interpretations of the "terms" of the sale?
2 sources of verification....
Correct???

Ever been asked to do divorce appraisals where the husband and wife absolutely hate each other and they both have a ton of money to waste trying to take the other one down? The report with the most verification will most likely "win". The workfile that found out that comp #1 of the other appraisal wasn't really a good comp because of X, Y or Z which was verified through both Realtors can make a lawyer client very happy or very unhappy.

 

[Have Laser-Will Travel]

I'm not getting on anyone's case here....
Just thinking out loud....

After reading the definition of Verification regarding our industry....
And reading so many fine posts regarding who and who doesn't "verify"....
Whether one made the attempt to "verify" sale 123 yet failed to obtain "verification" as per the definition or whether one made no attempt....
Under MCG's and your opinions.....
Employing sale 123 would be a violation either way....
Si or no?????

BTW, when I read the definition that other's posted on this thread, I may have missed the part that said it's okay to employ an unverified sale as long as one included a statement of effort.....

But it wouldn't be the 1st time I missed something posted in the AF.....

Even worse, verifying "comparable sales" is not qualified and therefore not only limited to the sales in the report but, all comparable sales would need to be verified!

 

[Michael P Jacobs MAI]

I knew that this thread would blow up when I saw it - nothing distinguishes good appraisers from great appraisers better than deep verification and analysis and we all feel a little insecure about what this means because there simply is no bottom. It's like "who's the best runner" - there is always somebody faster (even if you're a gold Olympian runner), or "who's the best painter." However, few users of appraisal reports understand this and there is nothing in standards that defines verification specifically enough to tell an appraiser exactly what is required. So, each and every one of us is all over the place depending on the quality of the sales and listing data, uniqueness of the property, our deadline, and of course how much we'll lose on the assignment if we follow a rabbit too far down its hole.

We have a deadline on every appraisal we do, and "reasonable fee" language inferred by our standards recognizes that an appraiser is not expected to "make a career" out of each and every report - we could, and many have a real problem getting reports out on time because they just aren't comfortable pulling the trigger without "all" the information. On the low-end of the spectrum, we have opportunists that just think this is all about the most direct route between them and the fee. So, either be "the greatest" appraiser and verify everything down to notarized confirmation by principals (brokers, buyers, sellers, attorneys, etc.), or be a good appraiser and stick to what "most market participants" would consider reasonable depth hoping you'll catch the major issues with a strong reconciliation between several comps.

Remember, most market participants other than appraisers are NOT making contact with principals. Just what one "might" learn from reaching out to them makes the certified Appraisal Report heads and shoulders above the CMA or BPO. One argument I have heard and cannot argue with is that MLS or CoStar is all "the market" considers - nobody making price decisions other than appraisers bothers to look at public records - so even a sale price reported in error is a "market-making" piece of information.

An excellent and knowledgeable client that looks deeply into each and every appraisal report - so much that I double the fees for them - was once surprised that I made a distinction between warehouses with 3% and 50% office - "How do you know?" she asked as though actually reaching out to principals was a foreign concept. Another I've worked with for 15 was shocked to learn that office/industrial condominium SqFt might or might not include common areas (or porches for that matter), and that we pulled condo docs to verify the REAL square footage for the comparison grid.

I know a review appraiser that expects appraisers to actually contact each and every broker, buyer and seller involved in a transaction. She's a nutcase and tries to contact them all herself. We don't work for them. They don' t do may deals anyway, and their value-underwriting is essentially, keep blistering the appraiser on anything and everything until we run out of time and have to close or reject the loan... only then will they let-up and they always close the loan. I'm not exaggerating.

So, in conclusion, there is not a standard one can point to that defines verification adequately. Appraisers can get away with cutting corners here. Will your clients know if you do? Not most, especially if they are lenders, but some will and word gets around. Will YOU know? Yes. It appears to me that the only cohesion in this element of the appraisal process is whether the appraiser has any self respect and, by the way, self-respect will cost you money in this case so it's to be recognized and celebrated... but that's another issue.

 

[ucbruin]

Residential and commercial appraising is two different animals. Since the vast majority of us have minimal to no commercial experience, to keep the conversation consistent, let's concentrate on residential appraising.

 

[Terrel L. Shields]

other appraisal wasn't really a good comp because of X, Y or Z

Remember a farm appraiser who testified that he didn't use sales involving Hmong buyers because they were uninformed. But one of his comps was a farm purchased by Stephen Lee. My clients lawyer was quickly slipped a note telling her that Mr. Lee was Hmong and also a RE broker who had sold any number of farms in the area. She then proceeded to shred him to the point of him turning beet red. He had taken every sale from FmHA sales list. Never consulted the MLS and had no idea Lee was even a broker.