Response to ROV's . . . Appraisal SOW or a Business Decision ?

[ZZGAMAZZ]

Is the appraiser's response to lender ROV addressed/recommended/required by appraisal standards, or is it a business decision, or both?

I ask because ROV's very often include properties that if added to the grid would warrant a reduction in the Opinion of Value, and I'm wondering if that possibility could/should be included in the Scope of Work of an assignment.

ROV's have been discussed ad nauseum on the AF but I still don't fully understand the nuances.

Thanks as always.

 

[J Grant]

Is the appraiser's response to lender ROV addressed/recommended/required by appraisal standards, or is it a business decision, or both?

I ask because ROV's very often include properties that if added to the grid would warrant a reduction in the Opinion of Value, and I'm wondering if that possibility could/should be included in the Scope of Work of an assignment.

ROV's have been discussed ad nauseum on the AF but I still don't fully understand the nuances.

Thanks as always.

In an ROV. the appraiser is expected to review any properties sent as possible "comps " , and we can accept or reject them -if rejected, when why would we include them, whether they would raise or lower the value ?

ROV limo is a nightmare and the passage of it in Frank Dodd was caving in to lender interests. When the property sales as possible comps come from a RE agent or borrower via the lender, the sales are usually are higher price and blatant attempts at raising value. When they come from Fannie CU though, it is rote data and the sales can be lower price sales because a computer pulled sales.

Possible comps s sent from an actual appraiser who reviewed the report should be properties they consider as better comps , which might include prices lower or higher.

 

[Fernando]

You can use the sale but if it's not a good comp, you have the final say in your reconciliation with your appraised value.
You are in control how to use sales and comps. Don't let others make your final decision.

 

[The Bob]

It's up to you. There is no requirement in DF that you have to address an ROV, but it sure is a lot easier to deal with it upfront instead of pi****** someone off and they escalate it.
I've had a couple where the comps they supplied were lower than the ones I used. In one case I'm pretty sure they were trying to get a lower value, using my appraisal as leverage.

 

[George Hatch]

As a practical matter your assignment isn't over until all these questions are resolved. Sorry.

The intended use is to provide the user with the info that it takes to make a decision. If they still have questions outstanding then that measure of completeness hasn't yet been met. It's what you end up with that counts, not what you initially submitted.

As far as dealing with ROVs consisting of "less-comparable", the simplest and most expedient way to do that is to pre-load your response into the original report. All it takes are a couple lines summarizing the dominant attributes of your subject and your search parameters that resulted in your comp selection. Then include the statement that any properties which don't fit within these parameters cannot be considered as similar to your subject as the comps you've already included in your SC grid. After that there's nothing they can respond with that will outweigh the facts behind that statement.

Then when you get the ROV you can respond by taking a screengrab of that paragraph in your report, highlight the "cannot be considered as comparable as S#1 - S#6 in the report" and send that in. That's your response: those sales don't fit the criteria to be considered "most comparable". Sorry/Not Sorry.

Quick and simple, and then you have provided your client with the info it takes for them to justify telling the borrower that they considered and rejected the ROV.

 

[Terrel L. Shields]

You don't know what you don't know and so attempting to pre-empt a ROV is a hard row to hoe. Isn't it ****ing strange that the appraisal always come in "LOW" but the contract price is never "HIGH"?

Tidewater has its own specified process.

HUD/FHA has this to say - so I would say you MUST respond and charge accordingly. Note the ROV must come from the underwriter and they need to prove that is was relevant and available on the date of the appraisal.

viii. Reconsideration of Value​

The underwriter may request a reconsideration of value when the Appraiser did not consider information that was relevant on the effective date of the appraisal. The underwriter must provide the Appraiser with all relevant data that is necessary for a reconsideration of value.​

The Appraiser may charge an additional fee if the relevant data was not available on the effective date of the appraisal. If the unavailability of data is not the fault of the Borrower, the Borrower must not be held responsible for the additional costs. The effective date of the appraisal is the date the Appraiser inspected the Property.​

I am not even sure that FNMA mentions ROVs. My response would be terse in any event. A- explicitly show me where there is better data. B- up front that if the data they provide is inadequate to change the value, I will be billing them for my time. Period.

 

[ZZGAMAZZ]

You don't know what you don't know and so attempting to pre-empt a ROV is a hard row to hoe. Isn't it ****ing strange that the appraisal always come in "LOW" but the contract price is never "HIGH"?

Tidewater has its own specified process.

HUD/FHA has this to say - so I would say you MUST respond and charge accordingly. Note the ROV must come from the underwriter and they need to prove that is was relevant and available on the date of the appraisal.

viii. Reconsideration of Value​

The underwriter may request a reconsideration of value when the Appraiser did not consider information that was relevant on the effective date of the appraisal. The underwriter must provide the Appraiser with all relevant data that is necessary for a reconsideration of value.​

The Appraiser may charge an additional fee if the relevant data was not available on the effective date of the appraisal. If the unavailability of data is not the fault of the Borrower, the Borrower must not be held responsible for the additional costs. The effective date of the appraisal is the date the Appraiser inspected the Property.​

I am not even sure that FNMA mentions ROVs. My response would be terse in any event. A- explicitly show me where there is better data. B- up front that if the data they provide is inadequate to change the value, I will be billing them for my time. Period.

"A hard row to hoe . . . softens the soil foe seeds to sow," to paraphrase Peter Sellers as Chauncey Gardiner, in an unknown classic movie, "Being There," 1979.

 

[Zoe]

You need to address it. I am getting stuff where a RE agent will send comps to lender that are the worst comparable properties. They completely ignore the house that sold in subject subdivision and sometimes next door to subject. When a RE agent completely ignores sales within subject subdivision, you need to address it. I understand lender sends you the ROV. But lender and RE agent are on a different agenda from you.

 

[Fernando]

It should be anticipated for purchase appraisals when you can't hit the target price.
Which could explain why I'm getting so many purchase appraisals. Other appraisers don't want to do them.

 

[Zoe]

I would be the first one to admit that a fee increase would be appropriate for an ROV or tidewater. I feel your pain. It adds hours sometimes to the completion of assignment. Sometimes it adds many hours.


You need to address it for your client regardless. It's not an if, and or but? You need to do it.

If it is garbage, just tell you client it is garbage and why.


What really kills you and makes you laugh is when client sends data that indicates a lower value than you reconciled. That is funny.