Freddie Mac vs Appraiser Bias

[glenn walker]

NO I would not be alright with what is obviously either a C3 o4 C 4 home and appraiser calls a Q 1.

Per the photos in the example, the best Q rating is Q 4 but if an appraiser calls it Q3 it is not that far off perhaps - and it would not imo affect value. Whereas calling such a home Q1 is preposterous. And dumb of you to assume calling it such would be fine with me. And dumb of that other poster to call it a Q5, which is very inferior low grade construction

I have never had a Q1 as I assume that would be a New Custom Built Mansion in Beverly Hills with the best quality materials made. My few Q5 were old and in extreemly poor condition requiring a lot of repairs and upgrades.

 

[glenn walker]

That is your opinion and what facts are you basing that on?

Yeah, Q5 or Q4. It proves the point that the UAD needs to be updated and appraisers needs to be better educated.

economy of construction...tract built homes to make as much profit as cheaply as possible.

Here is the UAD:

Q5 Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.


If you want to argue that the UAD is poorly written and needs to be improved, we can.

Why can't the UAD have a simple statement like: Q5 homes are more than likely to include homes that are built in starter projects by national home builders. etc.

I do disagree with their definition and Im not using it on newer tract homes

 

[NC Appraising]

NO I would not be alright with what is obviously either a C3 o4 C 4 home and appraiser calls a Q 1.

Per the photos in the example, the best Q rating is Q 4 but if an appraiser calls it Q3 it is not that far off perhaps - and it would not imo affect value. Whereas calling such a home Q1 is preposterous. And dumb of you to assume calling it such would be fine with me. And dumb of that other poster to call it a Q5, which is very inferior low grade construction

I would somewhat agree with you if you said Q5 and Q4.

Q5 Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.

Again, screams Q5 all day long. Where are you getting your rating from?? I know, your personal opinion. That is the purpose of the UAD...to cut out opinions and to stick to the facts....Uniform.

LOL
Q3 Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been upgraded from “stock” standards

 

[J Grant]

2128 Talbert Ct, Charlotte, NC 28214 | Zillow

2128 Talbert Ct, Charlotte NC, is a Townhouse home that contains 1556 sq ft and was built in 2020.It contains 3 bedrooms and 2.5 bathrooms.This home last sold for $307,500 in June 2022. The Zestimate for this Townhouse is $297,900, which has increased by $3,300 in the last 30 days.The Rent...

www.zillow.com

Tract built townhome. Vinyl siding. Limited amount of upgrades.

Q5 Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.


Screams starter tract home all day long?

After looking at the interior I would not call it q 3, but imo it is l better than a Q5. It has some ext trim, int has granite counters, upgraded cabinets, recessed lights. A Q5 would have particle board cabinets and cheap carpet and not have granite. Imo Q4 is the best rating.

Of course we were not there and that is why personal inspection matters. I can knock on a wall and tell how thin and cheap or how solid it is. I can walk on the floor of an older home and see if it feels spongy or not. I can see first hand the wood laminate floor is it the cheap paper think one or better .

 

[J Grant]

I would somewhat agree with you if you said Q5 and Q4.

Q5 Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.

Again, screams Q5 all day long. Where are you getting your rating from?? I know, your personal opinion. That is the purpose of the UAD...to cut out opinions and to stick to the facts....Uniform.

LOL
Q3 Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been upgraded from “stock” standards

It sure does not scream Q5 to me ( or Glenn) I explained why in post 94

But again, the fact that you and I might honestly see it differently, that is why I said who cares...we are both being honest in our rating and not trying to jump up value by calling it a Q2 or a Q 1 ( which would be insane ). If you called it Q 5 and rated all other similar comps Q5 and I rated subject Q4 and called the other similar comps Q4, the value would not be affected and neither one of us is misleading readers (though I still think Q4 is better lol )

 

[NC Appraising]

But aside from wanting to do a good job, I think the other IRL primary objections appraisers have to these are

• the reduced fee that goes along with the reduced billable hours per assignment. "It's the money, stupid."
• the reduced income going forward
• the reduced demand for the number of appraisers we already compete with
• being stuck in front of a computer all day/every day instead of being able to get out
• much tighter expectations for turn time
• losing control of your work day due to being required to get this report done today
• the increased likelihood of the job becoming an actual job where the appraiser is working as a W2 employee and not as an outside 1099 contractor.
• the total elimination of the opportunity to run a fee shop and leveraging the supervisor's signature
• etc

Great points above.

From the powers to be side $$$$:

1. can add more new appraisers to the market and make more profit.
2. AMCs can have staff appraisers that can do 5x the volume as compared to traditional URAR's. More profit.
3. can finally corporate or nationalize the appraisal process, with a few large firms controlling the process.


How long will it take for lenders and AMCs to treat these third-party inspectors the same way they treat us? (kill to many deals, move on to the next inspector).

 

[NC Appraising]

After looking at the interior I would not call it q 3, but imo it is l better than a Q5. It has some ext trim, int has granite counters, upgraded cabinets, recessed lights. A Q5 would have particle board cabinets and cheap carpet and not have granite. Imo Q4 is the best rating.

"Q5 would have particle board cabinets and cheap carpet and not have granite. "

Cabinets are cheap builder grade particle board cabinets, not wood. Granite is just an upgrade.

Upgrades...do not get me started LOL. Does the amount of upgrades in a new home shift the quality rating or does it remain the same. Sure would like the updated UAD to address this?

Good conversation. More proof that the UAD needs to be re-written, updated and to have more examples.

 

[glenn walker]

Great points above.

From the powers to be side $$$$:

1. can add more new appraisers to the market and make more profit.
2. AMCs can have staff appraisers that can do 5x the volume as compared to traditional URAR's. More profit.
3. can finally corporate or nationalize the appraisal process, with a few large firms controlling the process.


How long will it take for lenders and AMCs to treat these third-party inspectors the same way they treat us? (kill to many deals, move on to the next inspector).

The AMC only orders what their Lender Clients ask them to order. The model is to get away from Licensed appraisers because there not Under USPAP. In the future Loan Production Appraisers will simply be data collectors and form fillers. More like a general contractor his laborers do the hands on dirty work.

 

[George Hatch]

"Q5 would have particle board cabinets and cheap carpet and not have granite. "

Cabinets are cheap builder grade particle board cabinets, not wood. Granite is just an upgrade.

Upgrades...do not get me started LOL. Does the amount of upgrades in a new home shift the condition rating or does it remain the same. Sure would like the updated UAD to address this?

Good conversation. More proof that the UAD needs to be re-written, updated and to have more examples.

"More examples" would help appraisers tremendously. Not just for the UAD issues, either. I've thought for many years that the GSEs should publish and post complete "demonstration reports" of what they consider to be the preferred level of SR1 development and SR2 report content for their usage. Literally, a GSE boilerplate that appraisers could copy/use/edit as appropriate for their assignments. Get everyone on the same page, so to speak.

 

[glenn walker]

"Q5 would have particle board cabinets and cheap carpet and not have granite. "

Cabinets are cheap builder grade particle board cabinets, not wood. Granite is just an upgrade.

Upgrades...do not get me started LOL. Does the amount of upgrades in a new home shift the condition rating or does it remain the same. Sure would like the updated UAD to address this?

Good conversation. More proof that the UAD needs to be re-written, updated and to have more examples.

From a X-Builder perspective we looked at quality of construction as being how well built the home was and what kind of framing, roofing materials, etc were used. Things like Cabinets and Upgraded Counter tops do not change the quality of construction-they enhance the marketability and add value but have no effect on the over all quality of Construction . Think about it like a Automobile A Toyota is the same quality as a Lexus Mechanically but just has more upgrades and bells and whistles and both will go 200,000 miles or more.