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2055 Exterior

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xm39hnu

Senior Member
Joined
Jul 10, 2003
Professional Status
General Public
State
Florida
I've turned down a few orders for 2055 drive-bys. We live in a rural town which doesn't have enough conformity to make them credible. But I'm told that they're fairly common in urban and suburban areas. Those who order them seem to think that they're less work, and therefore command a lower fee. (Hah!)

To my new-guy's way of thinking, if I don't do an interior inspection, I've got about an entire page of extraordinary assumptions to state and justify. If the property is of the right age, I have to do a cost approach for the workfile, whether it is reported or not.

When the drive-by is done merely for convenience, can we honestly say that these extraordinary assuptions which we must make are truly necessary to a credible opinion of value? In other words, can we honestly say that we had to make the EO, if inspection was possible but simply bypassed in the name of economy and convenience?

How do you folks who do these drive-by's on a regular basis handle these issues? Aren't these abbreviated report forms merely shifting information onto the comment addendum?
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Drive-bys are only applicable where there's sufficient data (tract homes, etc). Yes, you have extraordinary assumptions (based on tax records, interior is typical, etc), but once you build these, you just dump them into the default files. One default is that an interior on-site inspection may reveal data that may affect the value estimate. It's just another type of report that you have to be familiar with to complete properly.

You are correct that drive-bys in rural areas are generally not a good idea. However, urban drive-bys are not a big issue as long as it is typical for the area.

Roger
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I do a lot of 2055 exteriors in my area, including old mobile homes, manufactured homes, home owner constructed ( we do not have building inspectors or building codes in our area), etc. I have some canned statements that appear in every report where I can only see the subject form the street. I do as much gathering of information as I can, old MLS listings, old for sale by owner ads, copies of the county assessor's property record card which has sketches of all improvements on the site, call owners, neighbors, relatives, etc, etc.

My canned statements follow:

EXTRAORDINARY ASSUMPTION:
Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis

Opinion of value in this report based on information obtained from county records, MLS, builder, etc and not verified. It is assumed that the interior condition of the improvements are comparable to exterior conditions observed from the street. If this assumption is found to be false, it could alter the appraiser's opinions or conclusions.

IMPROVEMENT INFORMATION:
Livable area for the subject obtained from county assessor's office records and not verified. Subject appears from the street to be average quality construction, with the exterior appearing to be in average condition, and conforms to the marketing area. (and then I describe what I can see from the street and/or information that I found in old MLS listings or for sale by owner ads, stating the where the info came from)

I also make sure that my statement about observing the property from the street appears on my USPAP Compliance addendum as well as on the 2055 itself. All of the above gets revised, edited, changed as necessary depending on what info I find and what I can see.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
I dislike not knowing what is inside so when I take a 2055 Exterior, I stop, get out, tape the house, shoot my pictures and get on my way. I only accept the orders if the lender will give me the owners phone number so I can find out what is inside. I do not trust the assessors data in my rural area. If the homeowner is home, I sweat talk them into letting me do a walk through/room count.

All of this trouble is why I charge the same for a 2055 Exterior and a 2055 Interior and they are only $50 under my URAR.

BTW, 2055 is a limited appraisal and the Cost Approach is not considered. Why do it unless you are uncomfortable with the comps? If the report is not misleading, you should not worry about the Cost Approach.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I don't like to do them either, and in my rural area it can be difficult. But I only do a drive by if:
1. It's a foreclosure, or other similar hostile environment.
or
2. I can see the house very well from public access, and the improvments appear to be reported correctly in tax records. Thank goodness our tax records are very accurate, and some even have current photos available.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
I recently got an order for a 2055 with interior inspection of a house located in a rural area surrounded by state parkland located in the new Jersey Pinelands ( an area with severe development restrictions).

I inspected the property and determined that the 2055 was inappropriate so I completed a URAR. The mortgage company refused to accept the URAR even though I didn't charge any more for it. They wanted a 2055, when I explained that the 2055 was not appropriate they ordered a 2075. To make a long story short I sent them a URAR, with a 2075 and a 2055 as addendums. I have no Idea which form they used, but I did it the right way.
 

Darrell Hignite

Sophomore Member
Joined
Jul 16, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
I appraised a house nine months after the first mortgage was put on the New home and found out that the upstairs was not completed.

The original appraiser did a 2055 exterior and didn't attach a cost approach either. The owner showed me his copy of the appraisal. I couldn't hit the value of the other appraiser because he included over 300 square feet of upstairs that was not completed. (Unfinished Attic)

Now here is the question, Since he didn't inspect the property(inside) and it was new, is it a limited appraisal? Sure it is! Should he get called on the carpet, and why didn't he do an inspection? The cost approach is very very important on new homes, but some appraisers will still do 2055's or 2065's because that is all the lender asked for...remember if you are the appraiser, you should decide what form you should use. I also charge the same for 2055's, 2065's, and 1004's, after all, I charge for the "APPRAISAL", not the form. :D
 

Rich Hahn

Senior Member
Joined
May 2, 2003
Professional Status
General Public
State
Colorado
We had a couple of close calls lately

2055 ext. I see 2 story county shows ranch, Upgrade. Once inside its a remodel and half the house is gutted...

2055 ext in the mountains, cant see subject from public road. Upgrade. Turns out to be non owner and he has made it into an illegal duplex.

What fun we are having..
 

Rich Heyn

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Michigan
Two things in this thread caught my eye. Let's do a quick USPAP Q&A.

A) Is a 2055 always a limited appraisal?

B) Is a 2055 a limited appraisal because there is no inspection?

C) Is a 2055 a limited appraisal because there is no cost approach?

Rich Heyn
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
Originally posted by Rich Heyn@Aug 13 2003, 05:31 AM

A) Is a 2055 always a limited appraisal?


NO

B) Is a 2055 a limited appraisal because there is no inspection?
No

C) Is a 2055 a limited appraisal because there is no cost approach?
Yes, if the cost approach is applicable
 
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