Un supported adjustments

[Sadie]

In my experience, it is difficult to proofread one's own work. In my old firm, we always swapped reports and had another appraiser read it. It was really amazing the things that they found that were not found with spell check, etc.

I think I heard somewhere that most errors are found right after you hit 'send'.

 

[Webbed Feet]

I had a client ( a large nation wide bank) review my report and state that my adjustments were unsupported. I use Synapse by spark which runs multiple analysis and then i attached their results to my report as support. I also outlined throughout the addendum each adjustment that was applied and referenced which analysis was weighted most. So I am confused, what more is the underwriter looking for?

I think I will maintain my fine tradition of unpopular to semi-popular opinions for all. Restricting myself to just "supporting" adjustments, the entire problem going on is the consistent and on-going scapegoating ignorance of users of appraisal services both governmental and not. They persist in two giant failings. 1) It is pretty much impossible to define what "support" means regarding the ever moving targets of what really are millions (yes, you read that right) of real estate markets that are always in constant states of flux all over this country. There are markets within markets within submarkets all over everywhere. The entire concept that all real estate appraisers can somehow keep up with using ever changing historical data for every little need for every report in every market and all of the submarkets is completely ridiculous. 2) Real estate appraising is NOT a science!!! Please repeat that seven thousand times and write it ten times that many times lending communities and secondary mortgage markets!!!! 1 and 2 are why all of your attempts at automated appraisal models fell apart. 3) And, a whole bunch of this has come from lenders and secondary markets requiring point values, instead of credible value ranges, in the first place. But that is all part of the scapegoating isn't it? Deflect the responsibility for making lending determinations based mostly on borrowers ability to repay the loans by establishing methods to point fingers at anybody else other than the lenders that should be making those decisions. So today it is "the adjustments are not supported" all as part of current ways of preestablishing blame on someone else.

 

[sputnam]

And so all those codes THAT NO BORROWER CAN UNDERSTAND WITHOUT THE CHEAT SHEET are simply clear and precise words???

The borrower isn't the Client or an Intended User. We rarely do our work for the Borrower.... And, of course, the definitions are in the report... or are supposed to be.

 

[Terrel L. Shields]

The borrower isn't the Client or an Intended User.

And how many appraisers will be doing this for court and private work? Too many.

 

[Webbed Feet]

And how many appraisers will be doing this for court and private work? Too many.

I can answer that one. Too many!

The last appraisal report I received provided for a private party for the intended use of a valuation challenge for tax purposes had just a few problems:

- No definition of value in the report
- Date of valuation incorrect for the intended use
- Comparable used that were clearly indicated to be distressed sales on the local MLS, no disclosure of that at all in the report
- Copious amounts of boiler plate referring to "the Lender" and lending requirements involved when there was no lending involved.
- Analysis of most of the sales history of the subject property entirely missing excepting the most recent sale that the appraiser declared to be invalid for no other reasons other than the undisclosed distressed sales being used in the report and the ones with land with almost a shear vertical slope (this was bare land) had lower sale prices (subject had a 2% to 40% upslope from street grade). Other than that, no analysis of even the most recent sale that occurred just a few months prior to the appeal or anything regarding the mostly radically different slopes.
- Yes, yes, yes, USPAP does not require we go personally look at the comparable sales used. No, the appraiser did not go look at the sales used, somehow magically determined all the slopes were comparable from only MLS photos.

I could go on... but there would not be, and isn't, any point to doing so. By the way, there was only a $200,000 difference between the subject's most recent sale price, and the report's lower conclusion, from the owner's prior purchase of $300,000 just a few months before.

 

[eskayenterprises47]

One last item, you have to sell it. You have to convey to the underwriter, in writing, with your reconciliation of how you came to your conclusion. Of course your report is going to come back to you if the underwriter has to figure it out.




I fully agree with the above. I was taught that a strong addendum, no matter what the abnormal situation whether it be a gross differentiation in GLA from the tax records to the hand measurements to difficulty bracketing in any line area to whatever.....as long as it's explained succinctly in the addendum it tends to minimize "kickbacks" from the underwriters. Just my experience.

 

[Tom D]

It also has to do with the tolerance level of the lender. In no other business do you get the micro details of what was done to fix the problem. Usually, just a bill with a general boiler plate description. But us, not sure where the micro explanations started, but when i reviewed i usually couldn't find much of anything on a lot of appraisals.

You just gotta figure out the boilerplate way of showing how you got there on certain items. I have read some stuff here with so much description that i phased out half way thru.

 

[Webbed Feet]

One last item, you have to sell it. You have to convey to the underwriter, in writing, with your reconciliation of how you came to your conclusion. Of course your report is going to come back to you if the underwriter has to figure it out.




I fully agree with the above. I was taught that a strong addendum, no matter what the abnormal situation whether it be a gross differentiation in GLA from the tax records to the hand measurements to difficulty bracketing in any line area to whatever.....as long as it's explained succinctly in the addendum it tends to minimize "kickbacks" from the underwriters. Just my experience.

I cannot really agree as based upon my past experience far too many lender employees failed to read much of anything in the addendums. If I were to do it all again, in order to run a more profitable highly efficient business, I think my supplemental addendum would simply say "Send your questions about anything you want." That way I could address only what they care about and only have to do so once. Just join the crappy appraiser form filler troops as those are who they hire and seem to want.

 

[Sadie]

I cannot really agree as based upon my past experience far too many lender employees failed to read much of anything in the addendums. If I were to do it all again, in order to run a more profitable highly efficient business, I think my supplemental addendum would simply say "Send your questions about anything you want." That way I could address only what they care about and only have to do so once. Just join the crappy appraiser form filler troops as those are who they hire and seem to want.

My last report was reviewed by AI - Cross Check. No humans involved. The requests for changes were coherent, but it was obvious that it wasn't reviewed by a human.

 

[alebrewer]

1 and 2 are why all of your attempts at automated appraisal models fell apart.

Are you sure the GSE automated appraisal models fell apart?

Real estate appraising is NOT a science!!!

Insofar as Economics is a science, then too is appraising (which is a specialized arm of Economics - predicting human behavior as it relates to the home purchase market).

So today it is "the adjustments are not supported" all as part of current ways of preestablishing blame on someone else.

Of course that's possible. It's also possible that the adjustments aren't supported...