Conventional loan/Flood

[Charles West]

Why would a lender rely on an appraiser when you have specialized 3rd party companies in determining flood areas?
It would be foolish for lender to rely on appraiser who is not an expert.

The problem is the borrower is also relying on the appraiser to verify the information contained in their appraisal report and they will undoubtedly use it as a reference in the future. Furthermore, the lender is not the problem, they disappear after closing but that report is forever.

 

[shrubberyvaluation]

I completed an appraisal on a 1004/Conventional. I use Alamode/Total software. Interflood is the flood map software in total. Per Interflood the subject is located in AE dated 2009. I submitted the report and received a revision request from the lender to change the flood zone to X500. If I do so, I am going to have to change comps to reflect comparables with similar flood zone. Has anyone had to do this before?

Why do you have to have comparables with the same flood zone? Is that a big factor in your market? Do you see a difference in price based on flood zone?

 

[Fernando]

It would be foolish for an appraiser to do everything the lender requests. Especially in cases like this. I've already explained to you "why" lenders do things like that, now explain to us why you did. Especially in the absence of an official "flood hazard determination" from a reputable third-party company. I thought you had documentation from one of those showing an official flood map, not some cheesy "seller's disclosure" like the California form above you are bragging about.

CA real estate agents give the Natural Hazard Disclosure Report which not only indicate if subject is in flood zone (I admit rather far away and not detail but does check box whether subject is in a special flood hazard area or an area of potential flooding) which is why there are more specialized 3rd Party Companies which stand behind their flood findings.
NHD also indicates if forest fire risk, whether in earthquake fault zone, in seismic hazard zone, landslide map if available, liquefaction if available, Tsunami map if available. Coastal Bluff, Dam Inundation, Former Military Ordnance within a mile, Commercial or Industrial hazard within a mile, airport noise, etc.
It's not "some cheesy seller's disclosure".

 

[Fernando]

Why do you have to have comparables with the same flood zone? Is that a big factor in your market? Do you see a difference in price based on flood zone?

Ask RCA. In his hometown, you can see the price difference. Flood insurance is expensive.

 

[ucbruin]

Why do you have to have comparables with the same flood zone? Is that a big factor in your market? Do you see a difference in price based on flood zone?

Like most differences....
Just include a comment that there is no adjustment warranted, if no difference....
Always include a comment....

 

[Fernando]

Like most differences....
Just include a comment that there is no adjustment warranted, if no difference....
Always include a comment....

Make sure y'all right in that there's no price difference.
I admit one of my property is not in FEMA Flood zone but near it. I didn't consider it when purchased since not in Flood zone AE.
Last winter those area in Flood zone got flooded. I was slightly worried that there might be water issues since my property is on flat terrain and there's so much saturation on the ground.

 

[Mike Ault]

CA real estate agents give the Natural Hazard Disclosure Report which not only indicate if subject is in flood zone (I admit rather far away and not detail but does check box whether subject is in a special flood hazard area or an area of potential flooding) which is why there are more specialized 3rd Party Companies which stand behind their flood findings.
NHD also indicates if forest fire risk, whether in earthquake fault zone, in seismic hazard zone, landslide map if available, liquefaction if available, Tsunami map if available. Coastal Bluff, Dam Inundation, Former Military Ordnance within a mile, Commercial or Industrial hazard within a mile, airport noise, etc.
It's not "some cheesy seller's disclosure".

Yes, I read the whole thing. It's similar to a HUD Builder's Certification, and I generally have to go to war with the builder on every one of those I receive until they fill them out correctly.

 

[Fernando]

Builder filling out form is not the same from specialized 3rd party companies which all they do is disclose environmental hazards.
Again I commend you for your knowledge but I'm always looking at my liability side when doing appraisals which is why I avoid certain types of assignments.

 

[Mike Ault]

Builder filling out form is not the same from specialized 3rd party companies which all they do is disclose environmental hazards.
Again I commend you for your knowledge but I'm always looking at my liability side when doing appraisals which is why I avoid certain types of assignments.

Would that be similar to a "Property Data Collector" company?

 

[Fernando]

Would that be similar to a "Property Data Collector" company?

Do they have bond/insurance to back up the "accuracy" of their data? If so maybe they will do more due diligence in verifying the data.