Freddie Mac vs Appraiser Bias

[George Hatch]

What if the inspector was an appraiser? Doesn't that negate the argument?

Not exactly, and you touched on it yourself in another post you made. The appraiser-qualified inspector is operating in isolation from any comparable sales data that will be used in the valuation. They have no comps to reconcile and no contract price to support or not support. They're not even looking for comparables. They're just walking into the subject cold and doing their observations.

 

[glenn walker]

Yeah amazing how we make all those condition and quality of construction adjustments on Comparables by looking at MLS Interior photos and driving bye at 40 miles per hours. So in reality a in person Third Party Inspector including photos should work just fine

 

[George Hatch]

Supposedly the AI's capacity at making these distinctions off the pics is improving significantly. If so, "inspecting" competency could eventually consist of being able to hold a camera and take a video clip on a walk-through.

 

[J Grant]

"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.

No matter how precise they try to make UAD categories, many houses are a blend of quality - some aspects may be Q5 and other Q4 in one dwelling

So which is dominant ? There is no way UAD can possibly address each property- which is why. Imo, if an appraiser is not trying to be misleading, whether they call a borderline house Q5 or Q 4 , it should not affect the credibility of the appraisal, - if you can think of a way to fool proof categorize every finsih, upgrade and defect, of every single diverse dwelling out there, would look forward to seeing it!

 

[J Grant]

Supposedly the AI's capacity at making these distinctions off the pics is improving significantly. If so, "inspecting" competency could eventually consist of being able to hold a camera and take a video clip on a walk-through.

The reason it is so easy, is that the third party is not actually inspecting. They are observing and reporting as rote tasks like a robot or drone .

An inspection per any specialty means observing viewing the house through the perspective of the profession the inspector is engaged for.

A listing agent inspects a house for its marketing potential. A home inspector inspects a house for defects and repair issues. A termite inspector inspects a house for pests . A mold inspector inspects a house for mold. .An appraiser inspects a house for value related aspects and how they compare in the market.

If so, "inspecting" competency could eventually consist of being able to hold a camera and take a video clip on a walk-through.

Again, they are not "inspecting" . They are performing a rote series of tasks, holding a camera and taking photos or video and notes. That is why a short training class can teach the rote tasks, vs the years of experience for an appraiser to derive competent inspection results.

 

[J Grant]

Not exactly, and you touched on it yourself in another post you made. The appraiser-qualified inspector is operating in isolation from any comparable sales data that will be used in the valuation. They have no comps to reconcile and no contract price to support or not support. They're not even looking for comparables. They're just walking into the subject cold and doing their observations.

I don't see how a contract price has relevance, wrt why you are mentioning it. The CS price matters in the comp selection and adjustments, not in what is observed at the inspection.
The fact that the appraiser inspects the subject with a viewpoint of how it might compare to substitute comps is a value added aspect. See my post 115.

Imo, prt other trades and professions, an inspection means a house is viewed through the perspective of the professional looking for X related attributes relevant to their field.

For an appraiser, part of the visit is using their experience to guage how a subject might stack up to comparable sales, considering if buyer expectations are met in the quality, how much do any defects, or condition and components contribute to the whole- on top of performing the rote tasks of measure, photo, take notes.

 

[Carnivore]

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 extremely poor condition requiring a lot of repairs and upgrades.

You can barely find a New Q5 Home today . Actually I don't even think I have seen any new Q5 built in my county any anymore. Those are built in the Country and financed through USDA/FMHA. Way back the Roof Rafter span were often 48" now 24" 20 Year Shingles. They used Masonite or wood lap siding. They had minimum kitchen Cabinetry and counter top was barely enough for the single bowel sink. They only had one bath Sink, toilet and a bath tub Cheap 4x8 Paneling. Cheapest Grade of Carpet and Vinyl. Interior walls were that Cheap 4x8 laminated Paneling. Formica Counter Tops. The One Bath was limited to a single shallow Sink and above a small metal medicine cabinet with one door that was also the mirror. So Yes we will still get some assignments that are Q5 but they are not New construction like the OP's Townhomes. Now Standard industry roof rafter spacing is 12”, 16”, 19.2”, and 24” on-center.

Your point about Q5 above OLD, Poor Condition. Yep. Q5's require a lot of maintenance and replacements; Carpet, vinyl painting etc etc

Like I said above I don't think any Developer/builder are even building any Q5 let alone Q6

Q6 is almost non-existent. That's the good Ole Country Boy with limited money who has some tools and his one acre of land.

 

[Sadie]

You can barely find a New Q5 Home today . Actually I don't even think I have seen any new Q5 built in my county any anymore. Those are built in the Country and financed through USDA/FMHA. Way back the Roof Rafter span were often 48" now 24" 20 Year Shingles. They used Masonite or wood lap siding. They had minimum kitchen Cabinetry and counter top was barely enough for the single bowel sink. They only had one bath Sink, toilet and a bath tub Cheap 4x8 Paneling. Cheapest Grade of Carpet and Vinyl. Interior walls were that Cheap 4x8 laminated Paneling. Formica Counter Tops. The One Bath was limited to a single shallow Sink and above a small metal medicine cabinet with one door that was also the mirror. So Yes we will still get some assignments that are Q5 but they are not New construction like the OP's Townhomes. Now Standard industry roof rafter spacing is 12”, 16”, 19.2”, and 24” on-center.

Your point about Q5 above OLD, Poor Condition. Yep. Q5's require a lot of maintenance and replacements; Carpet, vinyl painting etc etc

Like I said above I don't think any Developer/builder are even building any Q5 let alone Q6

Q6 is almost non-existent. That's the good Ole Country Boy with limited money who has some tools and his one acre of land.

Google the difference between a Q5 and a Q4 or better yet, go back a couple of pages and find the definition.

 

[Sadie]

The whole thing with the appraiser inspection, is that sometimes quality can't be illustrated by a photo. Homes that are well built but not necessarily updated can have a Q rating than a newer home that is all flash and no substance. Same for condition. We all know that (or should). The inspection by a qualified appraiser should be the standard. Perhaps its the individual appraisers as J Grant pointed out.

 

[Carnivore]

Google the difference between a Q5 and a Q4 or better yet, go back a couple of pages and find the definition.

I am using the FNMA 1004 attached C and Q definitions

The OP's town homes are Q4 But I can see the argument that some may be Q3. That has to do with what Interior upgrades the buyer may have negotiated; None of them are Q5

FTR I looked up that Townhome S/d in my MLS which is the same one the OP uses