1025 Form

[dbldty]

Please correct me if I am wrong. This is the way I see it.....
The 1025 has 7 approaches to value, VPU,VPR,VPGBA,VPBdrm, SCA,GRM, and cost approach. I do not make any adj. for bedroom or bathroom count, my adj. on GLA is very minimal $20-$50 depending on the SP of the property. My rental is usually very tricky being that rentals are not usually listed in MLS, the majority are posted in the newspaper. In this paticular instance I extracted rental data from the comps. that I used as the realtors were very efficient and recorded all the information that I need on there listings. Here is the issue the UW is demanding thru the :new_2gunsfiring_v1:AMC that I fill out the SCG just like the 1004 with bedroom and bathroom adj. also wanting me to replace my rental comps. does not like that I used the rental information off of my comparable, Additionally the AMC is telling me "I sincerely hope that we can all be willing to work together ,get through this particular file, and move on to continue a mutually beneficial working relationship???? WHAT DOES THAT MEAN....Oh and did I mention that they are also threating not to pay me.

I appreciate any comments, suggestions even constructive criticism.

Thanks!

 

[residentialguy]

I do not make any adj. for bedroom or bathroom count, my adj. on GLA is very minimal $20-$50 depending on the SP of the property.

Is this how you do it on your 1004? That's fine if you do, but I don't see any reason to do it 2 ways.

They can't tell you what value to give....that's true for EMV and it is true for adjustments, which affects your EMV.

What is the reason for not using your comps? They can't tell you what comps to use...again that is influencing the appraiser.


Here's how I would respond:

Specific adjustments for bed and bath counts were not adjusted separately but are rather included in the GLA adjustment which is supported by the current market and adjusted on a straight line format. An additional adjustment was not given as their was no market indicators warranting such an adjustment. GLA is first evaluated using trend analysis of similar-sized homes from the subject's market. Then, other influences such as condition, quality, etc are considered. Finally, the adjustment is refined using sensitivity analysis within the grid and tested for reasonableness with the selected comparables.

The rental comparables were strong indicators of market rent and the most similar found. To ignore these would be misleading. This is completely within USPAP, Fannie Mae, Freddie Mac and FHA guidelines.

Any further value pressure to adjust when no adjustment is warranted and to not use the best indicators of the market rent will be considered a violation of Appraiser Independence protected in the Dodd-Frank Act by unlawfully influencing an appraiser and encouraging a targeted value. This violation will be immediately reported to the Consumer Financial Protection Bureau, the ASC, all applicable State and Federal authorities and any related Government Sponsored Enterprises.

Looking forward to continue our mutually beneficial legal relationship.

 

[dbldty]

Thanks for your quick responce. I will be cutting & pasting the last 3 paragraphs.
I do make bedroom and bath count on the 1004 where the market indicates and adj. is necessary however, I was under the understanding that on the 1025 the bedroom bathroom counts were included in the VPR, and VPBedrm, and to adj. for them on the SCG would skew the Value.

 

[residentialguy]

On a 1025, I personally adjust for beds and baths. This is an income...the more you have, the more $ you can get. They are a big factor, in my areas anyway.

The one problem with using your comps might be age of the sale and its representation of current market rent.

 

[CANative]

The 1025 has 7 approaches to value, VPU,VPR,VPGBA,VPBdrm, SCA,GRM, and cost approach.

Just to clarify, "VPU,VPR,VPGBA,VPBdrm" are not approaches to value. They are just different elements of comparison.

 

[BossBob]

form 1025 Unit Value

I'm an agent, novice @ appraising (not stupid - M.I.T. '57)
My client wants to Refi a 4-unit in popular urban area. No 4-unit comps so bank's apprsr used three 3-unit of same sqft. Appraisal: One adjstmt for porch ($2K). Aver of 3 3-unit is $219K & 3400 sqft, Subject is 4-unit & 3400 sqft. Income value came in @ $270K & Adj unit price = $73K. Appraiser entered $55K for "Unit Value" not the $73K unit price. Then multiplied $55K by 4 to equal $220K for opinion of subject 4-unit. I think he made "unit value" from comps 3-unit price divided by 4 to make $55K (constant $/sqft) but it should be equal to Adj Unit Price of $73K. Appraisal shows no adjustments for 4th bath, 4th kitch, etc. Am I Crazy?

 

[Terrel L. Shields]

Am I Crazy?

If you are not, we'll make you that way before you leave

Methinks he should use the unit price...

 

[BossBob]

So I'm not Crazy!

If you are not, we'll make you that way before you leave

Methinks he should use the unit price...

Thank you! Thank you! Thank you!
Correct me if I'm wrong, but; barring other external influences, the Unit price should be the same as the unit value.
At my request the Bank protested the Appraisal and the Appraisal Firm responded with a revision which raised the Income value to $286K but kept the Unit Value @ $55K or $220K for the 4-unit subject.
I've politely requested the appraiser to add the adjustments but he won't answer.
Now I'll have to somehow find an official type source opinion to torpedo this idiot.
Again, thanks for your agreement and support.
bob@wny-homefinder.com

 

[CANative]

Try this:

Find lots of sales of 3 and 4 unit properties. Determine what the sale prices were and what their income was. Divide the sale prices by their income (yearly). This will give you a gross income multiplier. You'll end up with a range (could be narrow but probably will be a wide range.) Without considering how much you need to make your loan decide which of the sale properties are most reasonably similar to your property and select those multipliers.

Then multiply your property's income by those multipliers. This should give a reasonable range of value indications.

 

[AnonApprsr]

I always strive to use the Comps or Listings as Rentals. It makes sense to me.