Lender Suggested Comps

[ilsindaco2628]

This happens often enough for me to be a little suspicious.

I currently have a property under contract for $475,000 and we appraised it for $488,000. It is an older two story home but with new siding, new roof, and completely renovated inside with new kitchen/baths and so on.

The lender comes back with a revision request saying "why didn't you use/consider these three sales"
Of course all three sales sold $375,000-$425,000 and are old and not updated whatsoever. Just looking at the photos makes it extremely obvious.

It's an easy, albeit annoying, revision request to take care of with simple commentary but this happens often enough that it really makes me wonder who signs off on this, why waste our time with something so obviously incorrect, and so on. Anyone else experience this?

 

[Dublin ohio]

This was in a request for a quote

Please see below property details and advise your Best fee and ETA.

Needed back by 04/21

Please research property before providing an quote

"Appraiser will have to use newer or newly renovated properties from the east side of the area since there are very few renovated or new properties around the immediate area of the subject property."

 

[ilsindaco2628]

This was in a request for a quote

Please see below property details and advise your Best fee and ETA.

Needed back by 04/21

Please research property before providing an quote

"Appraiser will have to use newer or newly renovated properties from the east side of the area since there are very few renovated or new properties around the immediate area of the subject property."

So basically "hey can you do this as fast as possible and do what we tell you to do besides you being the expert?"

 

[Civic]

Like i been saying, there is no independence for appraisers, none. Either lender will not be happy with your value & not order again or the borrower. Those who say thsy don't have such problem are not being real with themselves. The solution to independence is to repackage appraisers as Valuation Analysts & have us only do market value & house inspector to provide condition of house. All appraisal forms to be reducted to state we are not responsible for accuracy of house inspectors info. Borrowers are not to be given contact to Valuation Analysts.

 

[CGinMN]

It is possible CU is telling the underwriter the property is at significant risk of overvaluation, so they are asking you to consider the sales CU suggests without first vetting the sales.

 

[Fernando]

If the comps provided were closest proximity like next door or across street, I think it's legitimate for the lender to request comment about those sales if similar size.
I normally provide such close proximity comps and adjust condition if different and make comments if appropriate or not appropriate in your weighing the comps in your reconciliation.

 

[Dublin ohio]

It is possible CU is telling the underwriter the property is at significant risk of overvaluation, so they are asking you to consider the sales CU suggests without first vetting the sales.

Very well could be the reason. But the issue with that. Is that would mean the comps that CU is "recommending" would have similar condition ratings as subject. Sounds like subject may have been a C3 and CU comps were really C4. But reported by other appraisers as C3

 

[Overimprovement]

If the GSEs are so dang worried about over-valuation I strongly suggest taking a look at the risks involved in appraisers NOT visiting the properties they are funding.

 

[sputnam]

"Appraiser will have to use newer or newly renovated properties from the east side of the area since there are very few renovated or new properties around the immediate area of the subject property."

That would get a decline from me.

 

[J Grant]

This happens often enough for me to be a little suspicious.

I currently have a property under contract for $475,000 and we appraised it for $488,000. It is an older two story home but with new siding, new roof, and completely renovated inside with new kitchen/baths and so on.

The lender comes back with a revision request saying "why didn't you use/consider these three sales"
Of course all three sales sold $375,000-$425,000 and are old and not updated whatsoever. Just looking at the photos makes it extremely obvious.

It's an easy, albeit annoying, revision request to take care of with simple commentary but this happens often enough that it really makes me wonder who signs off on this, why waste our time with something so obviously incorrect, and so on. Anyone else experience this?

CU runs an automatic review of sales and if they find close proximity sale of a property of similar size they send the list back to lender , and the lender then has an option to pass it on to the appraiser to look at. Or your client uses an auto "review" of reports. I do get sales from CU occasionally but not often - if it happens often look at what comps you are using /not using and your commentary.

I might include a statement like this : "Additional sales were considered. There are area sales found within a mile (or within subdivision) that sold for higher prices. These sales tend to be new homes or homes with a pool (or whatever reason ) There are also sales of similar sf that sold for lower prices. These sales tend to be homes in original, dated condition or much smaller houses. The appraisal used the more similar comps in condition and size as the subject "

That might cut down the sends, but even if client still sends sales to you, at least you made the comment wrt why you used some and excluded others, making it easer to address.