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1004D question. I hate this form BTW

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New Orleans Guy

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Junior Member
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Feb 8, 2006
Professional Status
Certified Residential Appraiser
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Louisiana
I appraised a house from plans about 9 months ago for a mortage company. Now the bank (Flagstar) that apparently funded the loan wants a 1004D. This is how the request is worded

"Need final inspection summary update-please check the yes or no /include photos-inside and out. Got to have these items."

Sounds like they want both parts of the form. Sounds like they need a new appraisal to me. I really don't care about getting a new assignment. I would for go the $$ just to not do it if I could, I don't need the money right now and have a lot of other things on my plate.m2:
What can I do to satisfy them the quickest/easiest way? I thought about just doing the top section since that is what they seem to need but the house was not even there last time, so maybe the top section cannot be done since it was hypothetical. If I have to reappraise the thing I will but what would you guys do. This is me "consulting my peers" as all appraisers should so no flames please.
 

CANative

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Jun 18, 2003
Professional Status
Retired Appraiser
State
California
You could do the update (new assignment) and certificate of completion (old assignment) and use both sections of the 1004D form with a reference by attachment.

But I wouldn't. The changes in market conditions over the last few months have been too significant even if that little section of paradise has been unaffected.

The last request for an update was a few weeks ago and they offered $150. I declined that particular assignment and countered with an an offer to just do a completely new appraisal for $350 ($500 -$150 for no new measuring and much of the subject's characteristics already researched and described.)

They accepted.
 

xmtpedprl

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Dec 6, 2005
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General Public
State
Florida
If you did your report 'Subject to' builder's plans & specs, then the form is fine, no? What am I missing?

The new form recerts older values (if you're feeling brave enough to do that on a 1004D), as well as passing for final inspection/value. And in both instances you are supposed to make sure you've seen the property again.

Dave...
 

New Orleans Guy

Thread Starter
Junior Member
Joined
Feb 8, 2006
Professional Status
Certified Residential Appraiser
State
Louisiana
You could do the update (new assignment) and certificate of completion (old assignment) and use both sections of the 1004D form with a reference by attachment.

But I wouldn't. The changes in market conditions over the last few months have been too significant even if that little section of paradise has been unaffected.

The last request for an update was a few weeks ago and they offered $150. I declined that particular assignment and countered with an an offer to just do a completely new appraisal for $350 ($500 -$150 for no new measuring and much of the subject's characteristics already researched and described.)

They accepted.
I think your suggestion is probably the best idea. I will just offer to do a little extra work (full 1004) so that I can sleep good at night and they can have a better report. I think I will call them in the morning and discuss it with them. I have a feeling they will think I am being a pain. I guess I will then have to explain that the way they like to scape goat appraisers for failed loans and put us on do not use lists for anything they can think of is the reason that we get a little finicky on anything we have to sign our name to.
 

Marcia Langley

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Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
I'm with Greg, I'd decline to report a new appraisal on that form. I'd offer to do one on the 1004.

The amount of research/development is the same either way and so should the fee be. It should make the client happy.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
On plans and specs, I know when I do the final I will have to measure the house, which I do, and as long as it is similar to the original plan, I maintain it in my file.

For the update, I always get my best comps together, three closed and in this market, a couple of listings, and I grid them, retaining the work in my file. Then I fill out the 1004D. If it is "Yes" I check yes, if "No", I check no. I send it with a bill for $125 on the final and $150 on the update for a total of $275. The UW once asked, after I sent my report in, for gridded listings. I told the client that the cost is $75 more and then sent in the comps already listed in my workfile.

An update is a new order, but the report cannot be fully understood without reference to the original assignment. That is stated on the 1004D, I believe.
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
"Sounds like they want both parts of the form. Sounds like they need a new appraisal to me" From the OP.

First order of business is to contact your client to see what they really are requesting. These 1004D forms has many of them confused. Then, if they truly are asking for both, tell them the fee for both would equal the fee for a new appraisal, so steer them towards a new appraisal :) If they resist, and your market is decling, tell them once the declining box is checked a new appraisal would have to be completed most likely anyway.
 

xmtpedprl

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Dec 6, 2005
Professional Status
General Public
State
Florida
Again, and pardon me if I'm a little slow tonight, but the 1004D value confirmed is merely that value stated as of the 'Effective Date' of the original report, no? Regardless of whether it was done 3 months, or 9 months ago, correct? No liability issues there if you go out and see the property to make sure they did what you were told they'd do.

Now, if they want an *recertification of value done on a 1004D* of a notably dated 1004 (done like 9 months, for the sake of example), they'd be foolish to rely on the original report *plus* the 1004D, HOWEVER, they'd be well within their rights to do so, correct? They *could* order that, and anyone *could* give it to them, they just wouldn't know how reliable their report was.

In essence, all I'm saying is that they can request whatever they want, and if all a client wants is a final inspection to 'certify' the value attained in an original report, or, a 1004D value recertification of a very old appraisal, well, quite frankly, we can either accept or decline, but the order (request) is just that, an order.

It always, always, boils down to liability. (Okay, and fee!)

Dave...
 

Ken B

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Joined
Feb 18, 2004
Professional Status
Certified General Appraiser
State
Florida
From FNMA's Selling Guide -

XI, 201: Age of Appraisal (or Property Inspection) (11/01/05)

The property must have been appraised (or inspected, if that is the level of property fieldwork recommended for a Desktop Underwriter-processed mortgage) within the 12 months that precede the date of the note and mortgage.

When an appraisal report will be more than four months old on the date of the note and mortgage—regardless of whether the property was appraised as proposed or existing construction—the appraiser must inspect the exterior of the property and review current market data to determine whether the property has declined in value since the date of the original appraisal.

• If the appraiser indicates that he or she believes that the property has declined in value, the lender must obtain a new appraisal for the property.

• If the appraiser indicates that he or she believes that the property has not declined in value, the lender should request the appraiser to provide an update to the appraisal, based on his or her exterior inspection of the property and knowledge of current market conditions. The inspection and the appraisal update must occur within the four months that precede the date of the note and mortgage.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
Dave,

I know this may sound like semantics, but in this case it is important.

he term 'recertification' only applies to the completion report on the bottom half of the 1004d/442. (See AO-3).

The top half of the form is an 'update' which is a new appraisal with a new effective date and which must meet all the USPAP requirements of a summary appraisal. The research and development of that new appraisal is the same regardless of how it is reported (which form).

The 1004d update form (top half) only asks the yes/no question of whether the value has declined. It is insufficient to convey the required summary appraisal reporting and would need a lot of writing to achieve that even with the attachment by reference iof the old appraisal.

IMO that update form is worthless. But in a declining market it is worse than worthless. In any case, in any kind of market, my fee would be the same regardless of which form I reported it on.
 
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