Hybrid Appraisal Extraordinary Assumptions

[residentialguy]

Please read the entire sentence. It says "AS appropriate"..........

Yes, it is part of that sentence - that is appropriate. In what way would it not be appropriate when financing of a market indicator could affect value?

 

[BRCJR]

Yes, it is part of that sentence - that is appropriate. In what way would it not be appropriate when financing of a market indicator could affect value?

The interest rate can/is determined upon risk. A lower LTV may warrant a lower rate as a higher LTV may warrant a higher rate.
I have a low credit score, have been on the job for less than a year and my wife has a collection agency after her? My interest rate is 10.

How would that impact the value opined?

 

[residentialguy]

The interest rate can/is determined upon risk. A lower LTV may warrant a lower rate as a higher LTV may warrant a higher rate.
I have a low credit score, have been on the job for less than a year and my wife has a collection agency after her? My interest rate is 10.

How would that impact the value opined?

It may or may not, but I'd need to know to find out. What if your comp 1 interest rate was 30% CD. Is that considered cash equivalent or should something be adjusted?

 

[BRCJR]

It may or may not. What if your comp 1 interest rate was 30% and comp 2 had 1%. Is that considered cash equivalent or should something be adjusted?

I find what you a presenting in your question different than what is being discussed.

After a DOT is recorded the interest rate is public record.
If you elect to use the comps as you presented, yes, you need to determine if they are at-arms-length.

This discussion was presented as knowing about the current purchase not about the comps, if I read correctly.
I consider the interest rate for a purchase or refi to be confidential information unless the borrower and/or lender want to make it public. I doubt we would tell someone what interest rate we are charging you. Now, after the fact, it is public record. I still will not tell someone that rate. They can go look that information up themselves. Some DOT's do not have the rate stated and some, most I think, do.

I have appraisers call me, often, wanting to know what rates we charge for certain types of properties and loans.
It is ALWAYS stated in a range, never specific. The rate could be different for an identical property with an identical borrower profile. There is some negotiation that takes place. Just as appraising is not all checklist neither is loaning money.

 

[residentialguy]

If you elect to use the comps as you presented, yes, you need to determine if they are at-arms-length.

Comps are nothing but market data, just as your subject sale is market data. There is no requirement to provide financing on a Refi because that is not a market indicator like a sale. You can continue to go against your requirements, but you only shoot yourself in the foot. There are times when the subject is strongly considered, and your little "it's confidential" banner will end up with a dead deal on that unique high end house. The interest rate is no more confidential than anything else on that contract that appraisers are privy to, where it stays confidential.

 

[BRCJR]

Comps are nothing but market data, just as your subject sale is market data. There is no requirement to provide financing on a Refi because that is not a market indicator like a sale. You can continue to go against your requirements, but you only shoot yourself in the foot. There are times when the subject is strongly considered, and your little "it's confidential" banner will end up with a dead deal on that unique high end house. The interest rate is no more confidential than anything else on that contract that appraisers are privy to, where it stays confidential.

I started to write a rebuttal but, I decided to go ask the Compliance Officer, where I work. He is four doors down from me.
He indicates divulging the "specific" interest rate to an Appraiser, if they inquire, would be inappropriate unless that specific rate is already made available in some manner. Even then a lender would, most likely, not engage in discussion that specific about a particular borrower.

It is no more appropriate than to ask about their bank account balance.

 

[residentialguy]

It is no more appropriate than to ask about their bank account balance.

Not appropriate...if you want appraisers to ignore a reliable market indicator of value
Like I said, you only shoot yourself in the foot. There are times when the subject is strongly considered, and your little "it's confidential" banner will end up with a dead deal on that unique high end house because you made them ignore that market indicator

 

[J Grant]

Sales contracts, if we read them, have the interest rate in there! It is part of the financing contingency clause, and states either financing at prevailing rates, or else it has a high end cap of interest rate above which the borrower is not obligated to obtain a loan. . Unless a preferred interest rate affects price or other creative financing a buyer financing at /within prevailing rates is financing at typical terms.

 

[TRESinc]

I started to write a rebuttal but, I decided to go ask the Compliance Officer, where I work. He is four doors down from me.
He indicates divulging the "specific" interest rate to an Appraiser, if they inquire, would be inappropriate unless that specific rate is already made available in some manner. Even then a lender would, most likely, not engage in discussion that specific about a particular borrower.

It is no more appropriate than to ask about their bank account balance.

which falls directly in line with what res posted in that image

 

[residentialguy]

Sales contracts, if we read them, have the interest rate in there! It is part of the financing contingency clause, and states either financing at prevailing rates, or else it has a high end cap of interest rate above which the borrower is not obligated to obtain a loan. . Unless a preferred interest rate affects price or other creative financing a buyer financing at /within prevailing rates is financing at typical terms.

I was just about to post that myself. Does BRDJR's lender black it out????