Exterior Only Appraisal - Assuming Condition is Avg, Assuming Interior Same as Exterior

[DWiley]

As we are examining the appraisal reports that are being submitted under the COVID-19 flexibilities, the number one issue we are seeing is related to exterior only appraisals and the analysis/reporting of the interior condition.

For GSE work, it is NOT acceptable to simply assume that the interior condition is “average.” Nor is it acceptable to assume that the interior condition is similar to the exterior condition.
Many non-GSE users do allow (and even instruct that) appraisals completed with such assumptions, but these assumptions are not acceptable for GSE work.

The appraiser MUST have a data source for the interior condition. The data sources could include any of the types of sources normally used for comparables. Or, under the revised COVID-19 certs, the data could include information provided by the owner, occupant, agent, etc.

If one cannot obtain a data source for the interior condition, then the appraisal should not be completed. However, the intent of adopting the revised certifications and allowing use of data by the property owner was to minimize the number of cases where the appraiser could not obtain data.

 

[Lee Lansford]

I'm shocked to learn that appraisers are getting it wrong.

 

[gregb]

The client should be required to ascertain that there is a credible data source for the interior condition available to the appraiser before seeking to engage an appraiser for an Exterior-Only appraisal.

 

[Carnivore]

As we are examining the appraisal reports that are being submitted under the COVID-19 flexibilities, the number one issue we are seeing is related to exterior only appraisals and the analysis/reporting of the interior condition.

For GSE work, it is NOT acceptable to simply assume that the interior condition is “average.” Nor is it acceptable to assume that the interior condition is similar to the exterior condition.
Many non-GSE users do allow (and even instruct that) appraisals completed with such assumptions, but these assumptions are not acceptable for GSE work.

The appraiser MUST have a data source for the interior condition. The data sources could include any of the types of sources normally used for comparables. Or, under the revised COVID-19 certs, the data could include information provided by the owner, occupant, agent, etc.

If one cannot obtain a data source for the interior condition, then the appraisal should not be completed. However, the intent of adopting the revised certifications and allowing use of data by the property owner was to minimize the number of cases where the appraiser could not obtain data.

Yep, thats the way I interpreted what was put out. Its a conundrum for the appraiser. The AMC via the engagement letter do not address who the loan will be sold to. I suppose the Appraiser should turn around and ask the AMC before inspecting the exterior. and if they did the Appraiser should research the subject beforehand to see if they have something to use. dependent on what the AMC told them. Another way would be to always assume it is GSE and take the steps automatically irregardless.

 

[glenn walker]

As we are examining the appraisal reports that are being submitted under the COVID-19 flexibilities, the number one issue we are seeing is related to exterior only appraisals and the analysis/reporting of the interior condition.

For GSE work, it is NOT acceptable to simply assume that the interior condition is “average.” Nor is it acceptable to assume that the interior condition is similar to the exterior condition.
Many non-GSE users do allow (and even instruct that) appraisals completed with such assumptions, but these assumptions are not acceptable for GSE work.

The appraiser MUST have a data source for the interior condition. The data sources could include any of the types of sources normally used for comparables. Or, under the revised COVID-19 certs, the data could include information provided by the owner, occupant, agent, etc.

If one cannot obtain a data source for the interior condition, then the appraisal should not be completed. However, the intent of adopting the revised certifications and allowing use of data by the property owner was to minimize the number of cases where the appraiser could not obtain data.

DWiley - As usual you are spot on. If the appraiser doesn't have Interior photos in his/her MLS and can even speak to the Realtor or owner inquiring about the condition and even have them send him photos. In high cost areas like where I live the difference between an-average home and one in good condition can often amount to some big numbers. It's Unfortunate but many appraisers seem to believe that rating a property as average condition lowers their liability. In reality it does not especially if there are interior photos in the MLS or the agent or owner are willing to send him/her photos because at that juncture the appraiser has no defense in the event some crazy angry borrower files a complaint about the value or quality of the report.

 

[DWiley]

Yep, thats the way I interpreted what was put out. Its a conundrum for the appraiser. The AMC via the engagement letter do not address who the loan will be sold to. I suppose the Appraiser should turn around and ask the AMC before inspecting the exterior. and if they did the Appraiser should research the subject beforehand to see if they have something to use. dependent on what the AMC told them. Another way would be to always assume it is GSE and take the steps automatically irregardless.

Yes. As USPAP states, determining the proper SOW (1) is the appraiser's responsibility, and (2) requires communication with the client (or the client's agent). However, the point of having the revised certs, effectively eliminating Cert 10, was to help make sure that data was available, via the owner, most of the time. That is why the revised certs should be used, even if the exterior only is being done on an exterior form.

 

[alebrewer]

I'm shocked to learn that appraisers are getting it wrong.

 

[Carnivore]

I'm shocked to learn that appraisers are getting it wrong.

Lee, Your to funny... The word is not out there about assignments with a subject that has two site w/separate HBU's nor is the solution from FNMA on how to report it on there mandatory forms.

 

[Carnivore]

DWiley - As usual you are spot on. If the appraiser doesn't have Interior photos in his/her MLS and can even speak to the Realtor or owner inquiring about the condition and even have them send him photos. In high cost areas like where I live the difference between an-average home and one in good condition can often amount to some big numbers. It's Unfortunate but many appraisers seem to believe that rating a property as average condition lowers their liability. In reality it does not especially if there are interior photos in the MLS or the agent or owner are willing to send him/her photos because at that juncture the appraiser has no defense in the event some crazy angry borrower files a complaint about the value or quality of the report.

but then they can not complete 2, 3 or even 4 reports in one day! Whats wrong with you!

 

[Michigan CG]

The appraiser MUST have a data source for the interior condition.

Maybe appraisers should read the certifications they are signing?