Measuring partial stone (or brick) veneer/ partial stucco (or siding) homes

[alebrewer]

Quite often in my market. And nearly all the local realtors go by assessor GLA. Or they estimate to the nearest 500 feet, always erring on the high side of course.

Measuring a house is one of the most important things I do in my market. I do understand other non-1970's assessor offices and MLS's may be more accurate.

Of course, all RE is local... in my market, actual and assessed GLA match up pretty well unless there have been conversions or additions. In the northeast, however, I understand that is not the case.

 

[alebrewer]

The new USPAP definition of credible, worthy of belief, is not really different from common usage. The context for use of the term in USPAP is explained in the Comment to the definition: credible assignment results require support, by relevant evidence and logic, to the degree necessary for the intended use.

The intended use is the same for 2055 as for 1004 in agency mortgage transactions.

 

[Overimprovement]

Of course, all RE is local... in my market, actual and assessed GLA match up pretty well unless there have been conversions or additions. In the northeast, however, I understand that is not the case.

That's actually interesting that they are quite accurate. Do your local assessor physically measure homes as far as you know? Or are they just better at estimating than those in my area?

Our median age of home is like 62, so very few new homes being built. All info is from the street, assessors never even step foot into houses. That's why basement, and 2nd story info is often wrong.

 

[alebrewer]

That's actually interesting that they are quite accurate. Do your local assessor physically measure homes as far as you know? Or are they just better at estimating than those in my area?

Our median age of home is like 62, so very few new homes being built. All info is from the street, assessors never even step foot into houses. That's why basement, and 2nd story info is often wrong.

I think you've hit it with the age thing. I could do a quick data drop and calculate average age around here (at least for sales), but without doing so, I'd guess it's around ~ 25 years or so. Blueprints are submitted to assessors when the homes are built - maybe they weren't in times past? Or maybe the rate of construction of additions/conversions for older homes is higher than for newer homes... at any rate, the discussion begs the question of how relevant 'measuring' the home is, at least in the context of credible assignment results. In almost all situations, the appraiser is using GLA reported on MLS for analysis of the comparables - and yet that almost always is what is reflected in tax records. Does that bring into question the credibility of the comparable sales' information?

 

[Overimprovement]

I think you've hit it with the age thing. I could do a quick data drop and calculate average age around here (at least for sales), but without doing so, I'd guess it's around ~ 25 years or so. Blueprints are submitted to assessors when the homes are built - maybe they weren't in times past? Or maybe the rate of construction of additions/conversions for older homes is higher than for newer homes... at any rate, the discussion begs the question of how relevant 'measuring' the home is, at least in the context of credible assignment results. In almost all situations, the appraiser is using GLA reported on MLS for analysis of the comparables - and yet that almost always is what is reflected in tax records. Does that bring into question the credibility of the comparable sales' information?

There have been lengthy discussions on this forum regarding credibility of comp information vs subject. If we simply dismiss MLS data as too non-credible to use, that almost makes homes in certain areas "non-appraisable", which is something no one expects or wants. There is flexibility to allow for less than perfect information. Otherwise, USPAP would not allow desktops for instance.

I believe appraisers are to collect and analyze the best information available in the course of an assignment. For a full 1004, I believe if physically measuring a home adds no credibility to a report over what is already available to that appraiser, then unless the SOW demands it, it then becomes optional.

We cannot physically measure comps. We CAN physically measure the subject for a 1004. If a loan goes bad and it turns out the GLA was wrong on a comp in the report, but the appraiser used the best available info, they will be fine. However, if the subject GLA was significantly wrong, and the appraiser did NOT measure, well they better have a good lawyer.

I have actually changed the GLA reported in the MLS for comps I have used based upon my exterior inspection, assessor sketch, and aerial photos. I have also changed other elements--just this week my subject was reported BY the assessor to have been built in 2012. No way. It had a basement, that's a great place to determine age, and I would bet a trip fee the house was built in the 60s or 70s. I have seen that before though--some renovation happens and the year built gets changed because there is no year renovated field.

My point is that we ARE to use all reasonable diligence to obtain the most accurate info possible. If a local assessor provides that, great. If not, be ready to work harder.

 

[J Grant]

"An appraiser must not allow assignment conditions to limit the scope of work to such a degree that the assignment results are not credible in the context of the intended use.

Comment: If relevant information is not available because of assignment conditions that limit research opportunities (such as conditions that place limitations on inspection or information gathering), an appraiser must withdraw from the assignment unless the appraiser can:

* modify the assignment conditions to expand the scope of work to include gathering the information; or
* use an extraordinary assumption about such information, if credible assignment results can still be developed."

Taken from the SOWR. Underline is mine (with the exception of 'Comment'.

Sidenote - the agencies do not allow the use of an EA under the Covid appraisal guidelines.

2nd Sidenote - the intended use for a 2055 is the same as for a 1004, at least in mortgage lending transactions.

Again, credible is measured in context of intended use. (USPAP) In the past, clients DID NOT use desktops and 2055 ( typically) for mortgage origination work. In covid emergency conditions they are temporarily accepting them on some properties. With disclaimers, disclosures etc in the report.

What is happening is apart from Covid, clients or users are trying to use desktops /hybrids/2055 for higher risk origination appraisals. If clients decide to take that gamble, that is on them, not on the appraiser. The 1004 P hyrid and ext 2055 has disclosures and disclaimers and did not inspect or ext only inspect checked, as part of assignment conditions. The appraiser is tasked with developing credible results from a SWO in line with assignment conditions.

 

[alebrewer]

There have been lengthy discussions on this forum regarding credibility of comp information vs subject. If we simply dismiss MLS data as too non-credible to use, that almost makes homes in certain areas "non-appraisable", which is something no one expects or wants. There is flexibility to allow for less than perfect information. Otherwise, USPAP would not allow desktops for instance.

I believe appraisers are to collect and analyze the best information available in the course of an assignment. For a full 1004, I believe if physically measuring a home adds no credibility to a report over what is already available to that appraiser, then unless the SOW demands it, it then becomes optional.

We cannot physically measure comps. We CAN physically measure the subject for a 1004. If a loan goes bad and it turns out the GLA was wrong on a comp in the report, but the appraiser used the best available info, they will be fine. However, if the subject GLA was significantly wrong, and the appraiser did NOT measure, well they better have a good lawyer.

I have actually changed the GLA reported in the MLS for comps I have used based upon my exterior inspection, assessor sketch, and aerial photos. I have also changed other elements--just this week my subject was reported BY the assessor to have been built in 2012. No way. It had a basement, that's a great place to determine age, and I would bet a trip fee the house was built in the 60s or 70s. I have seen that before though--some renovation happens and the year built gets changed because there is no year renovated field.

My point is that we ARE to use all reasonable diligence to obtain the most accurate info possible. If a local assessor provides that, great. If not, be ready to work harder.

Couldn't agree more. My only point was/is, that if we accept as credible the GLA for the comparables, why would it not be acceptable to do so for the subject? At least unless we have reason to believe the information to be incorrect - as would be the case in your example of changing GLA for comps...

 

[alebrewer]

Again, credible is measured in context of intended use.

which is exactly the same for 2055 as it is for 1004 for lending transactions...

 

[J Grant]

I think you've hit it with the age thing. I could do a quick data drop and calculate average age around here (at least for sales), but without doing so, I'd guess it's around ~ 25 years or so. Blueprints are submitted to assessors when the homes are built - maybe they weren't in times past? Or maybe the rate of construction of additions/conversions for older homes is higher than for newer homes... at any rate, the discussion begs the question of how relevant 'measuring' the home is, at least in the context of credible assignment results. In almost all situations, the appraiser is using GLA reported on MLS for analysis of the comparables - and yet that almost always is what is reflected in tax records. Does that bring into question the credibility of the comparable sales' information?

Yes info on comps are only credible to extent they can be verified, and since appraiser is not usually allowed access to comps to go inside them or /and measure them, it is understood in assignment appraiser used best sources/verification to get sf /GLA/other info for omps.

The funny thing is now since comps have limited reliability due to limited access for personal inspection and measurement of them, a lower commensurate reliability for subject is being pedaled. The appraisal or valuation is for the subject, not the comps - so to see the koolaid of well it is okay for second hand comp info as the basis is funny.

 

[J Grant]

Couldn't agree more. My only point was/is, that if we accept as credible the GLA for the comparables, why would it not be acceptable to do so for the subject? At least unless we have reason to believe the information to be incorrect - as would be the case in your example of changing GLA for comps...

We are appraising the SUBJECT, not the comps. The comparison elements, cost approach etc feeds off the subject, so why lower the reliability of the subject info down to that of the lower avail for comps ?

There is a reason comp info is limited, we rarely have permission to personal inspect inside or measure them. so now make that true for subject as well ? To lower the reliability of the subject down to that of the lower level of comps ?