Need suggestions on how to respond to frivolous non sequitar review questions.

[CANative]

I'm with you on this Tom

Just wrapped up a beach property this morning
Low 250k
High 2.858m
Predom 700k

My OMV ... 535k

Must be an under improvement.

 

[CANative]

Oh man, how can you leave out the ferry to Balboa Island, the frozen bananas on a stick and the Wedge? Oh, maybe those are all gone from Newport Beach that I once knew.

Fun times in the early 60's. The car-ferry was a hoot. My wife's grandmother had a house on Balboa. Her little sister fished with Buddy Ebsen. Frozen bananas, a real toy shop with cheap do-dads and model plane kits...and the Jolly Roger restaurant. It was always a fun day. Just a few minutes from dad's parents place in Crystal Cove.

 

[Carnivore]

I would wager dollars to donuts that is a lender requirement, not an AMC requirement.

As to the OP, my response would have been, "see commentary on page X," because commenting on variances from predominant value has been a "thing" for at least 20 years. So, I always addressed it on the front end.

You'r correct and I agree with you completely. It is Not just because its yours/my opinion, its just plain fact. I dare say that many CR have only done a cursory reading of that document. I myself have never read the selling guide completely. Its a difficult read and much of what we appraisers need to know is scattered all through that Guide.

It is Standard Practice because of an expectation of Lenders, driven in part by the FNMA Selling Guide. Here is what happens. Many Lenders/AMC's pick and choose what items they deem important. I guess that's their prerogative. I don't agree with that at all, but I understand time is money and its their perspective of what is and isn't important. I just know it is what it is and live with it. Often I comment on something because of the Selling guide that the AMC never ask for or was not aware of or they for some reason don't think it's important. Truth is frankly I don't care what they think. I am the appraiser not them.

Bear with me this will be long. The assignment below is literally a Cookie Cutter. Mt Bragadocious turned it down and I think I know why, Simply He don't want to do any 'Splanin' because volume is his game. Fast N Cheap and AMC Phone Monkey Dot Com Loves this Dude!

The attached Pix is where my current subject(purchase money) is located. Someone reading the report would think "oh very conforming and uniform!" Slam Bam Thank You Ma'm Report.

Nope! My subject 2br attached SFR(not a condo)- has the lowest GLA in the complex(as far as i can tell). It is apprx 100-110 sft smaller than all the other sale in the prior year. All of the other 2br Sale are within 25sf of each other. So I have to explain SF bracketing. That's not going to be hard because the Developer had to adjust original planned foot prints to comply with set backs(terrain rolls a little bit). Fortunately three comparable sale were within the last 6 months, so I don't have to explain that, There were some other sale older in date, but they would not help in the GLA Bracketing. This gets worse. The subject had another accepted offer prior to this one. It fell apart because buyer got cold feet. Agent put back on market...two days later Pending again. This development is strong(ave DOM 5 days or less) and in high demand. Whats the Problem? Well both offers were close to but less than Listing Price. OK Cool. Problem is both offers are above the the three most recent comparable sale! So the offers are not Bracketed by the most recent 3 sale. You know i will have to explain that assuming the Opined MV is above them. It will be above them(not a lot) because I have SOLID market Appreciation Time Adjustment data. I also have the contract to purchase. The Buyer even though they are getting a loan has not made this subject to that loan, Essentially a Cash Offer. Thats pretty strong.

Whats my major Point. Simple, we as appraisers must do better. We are killing our profession report by report. Fast N Cheap Model is not helping any of this at all.

I can only do what I can do....I am but one island in a Universe of many islands and its hard to compete with all them islands.

Hope all that makes sense to somebody. Maybe I just have it all wrong. Color me a Fool then! Peace

 

[J Grant]

Whether the question of is subject an over or under improvement (for its site ) is NOT the same question as why is the subject market value opinion higher or lower than predominant price.

Q 1) The subject market value opinion is higher than neighborhood predominant price because the subject is on a beachfront lot which commands a substantial premium and the predominant price represents houses in the neighborhood that are not beachfront.

Q2) The subject is an under improvement for beach front properties because the subject being a C 4 condition small cottage has minimal contribution to lot and trend is for area buyers to tear down small cottages and build new larger houses ( or the reverse, subject is not an under improvement because trend is for buyers to retain small cottages on beachfront sites and upgrade them )

The subject is not an over improvement (at least from what is posted ) , the "reviewer" just asked the wrong question. Seems many std 1 "review" are a non appraiser , clerical person trained to read a checklist and ask questions from that list. IMO these should not be called reviews but have a different label. .

I like to address predominate price and under or over improvement issues proactively rather than respond to either as a client question .

 

[CANative]

I understand the basic argument. What annoys me is that it seems like an automatic response even when OMV is $1 over or under the predominant listed on Page 1.

 

[MMing5000]

Seriously? I came up in fee shops a few miles away from Newps in in Huntington Beach. I've currently live in a beach community and have been here for almost 30 years, and I actually do build surfboards and surf. You should assume I know what I'm talking about when I say I understand the difference between being on the beach side vs the bay side and everywhere in between.

Another thing that I understand is that you aren't writing your appraisal reports for yourself, nor are you even writing them for other appraisers - you are writing them for your readers who are not appraisers and who may not be locals.

Since you asked I'll tell you how I normally write most of my neighborhood descriptions.

The subject neighborhood is located on the Balboa Peninsula district of the city of Newport Beach. This neighborhood consists of a strip of land that average about 1/4 mile wide, with frontage on the Pacific Ocean [ s ] and Newport Bay [ n ] . The neighborhood was initially built out as a fishing village starting in the 1920s and features a wide variety of home sizes and ages on parcels generally ranging from about 2000-3500sf. Home sizes vary significantly, most ranging from 600sf-5000sf. The dominant attribute of the neighborhood is the proximity to beach access on the south side and the marinas and coves of the bay on the north side. Pricing varies dramatically by block, with the parcels fronting the sand (which have the unobstructable views) often selling at multiples of the parcels located even 100ft further inland. By comparison, SFR sizes tend to be of less effect on the pricing than proximity to beach access. This is typical of beachfront communities along the coast. Other uses in the area include a smaller number of duplex properties, some condo and apartment properties and community oriented retail and office uses along the traffic streets. (etc..)

Your next opportunity to pursue the dominant theme in your appraisal that THIS property is valued this high because of the beachfront location is in the site section, and then again on the bottom line of the improvements section where the form asks how well this unit fits in with the neighborhood.

So no, you don't rely soley on canned comment #4 that you use for all the appraisals you do in the OC that the site values comprise a larger percentage of the overall value than is typical. What you do is you make your case in almost every section of your report, including the land sale analysis in your cost approach. That way your reader isn't shocked when they get to pg 2 of your report and see what you had to do to find and use sales data to come to a value conclusion, and they're not wondering why your concluded value is so much higher than the averages in the neighborhood. The place to start talking about why your property is worth more than the apparent model match thats located 1 block inland isn't in the Sales Comparison Approach - it's all through the entire report until your reader gets sick of seeing it.


Or not. It's your report.

George - i appreciate you taking the time to give a lengthy reply ... and With all that being said on the history of the neighborhood, and adding "By comparison, SFR sizes tend to be of less effect on the pricing than proximity to beach access" ... the Reviewer is asking if the 500 sf cottage in average C4 condition with beach frontage is over improved?

 

[Carnivore]

If we forget about Beach Front, Water View(across street from and one street back and just think of low; high and predominate.

We can do this in one of five ways to stave off the inevitable stip from Checker Dude aka Checklist Charlie, Woke Version; Checklist Person give them the
Predominate in one of of five versions or in an addendum All five
Mean
Median
Mode
WAG
Dwiley way - Subjects MV

Dependent on your Mood that Day

 

[DWiley]

If we forget about Beach Front, Water View(across street from and one street back and just think of low; high and predominate.

We can do this in one of four ways to stave off the inevitable stip from Checker Dude aka Checklist Charlie, Woke Version; Checklist Person give them the
Predominate in four versions;
Mean
Median
Mode
Dwiley way - Subjects MV

Dependent on your Mood that Day

Actually, the DW way was to recognize that as silly as the requirement to comment is/was, many lenders have the requirement, so I would just always comment, even when it was stupid and/or obvious - stip prevention in action

 

[CANative]

Actually, the DW way was to recognize that as silly as the requirement to comment is/was, many lenders have the requirement, so I would just always comment, even when it was stupid and/or obvious - stip prevention in action

I agree and try to do that. Sometimes the so-called (by me) predominant is so close to my OMV and the descriptions and narrative in my report, being fairly good, it should be obvious to even the most casual observer why the predominant and OMV varies and I tend to forget to do the housekeeping chores.

 

[Carnivore]

Actually, the DW way was to recognize that as silly as the requirement to comment is/was, many lenders have the requirement, so I would just always comment, even when it was stupid and/or obvious - stip prevention in action

Next to predominate value is Age, Don't forget age