2055 form, comments, addenda, etc.

[Hank Outlaw]

I have read several posts on several forums about the 2055 form. I am interested in learning more about the "proper" use of this form and what addenda to include. Do any of you that use this form include a Cost Approach, or does it depend on the age of the home? Same for the Income Approach - does it depend on the occupancy and rental data (or lack of) in the subject's neighborhood?

I am not too sure what to include in addition to the 3 pages of the form, the sketch, the photos, maps (when an interior inspection has been made).

Thanks for any input anyone is willing to offer.

 

[Pamela Crowley (Florida)]

It's just a reporting form. If the cost and income approaches would not be considered reliable or most appraisers would not consider them necessary for the particular property, this form is also a Complete Summary Appraisal Report.

If one or both of these approaches would be considered the best approach, this would not be the appropriate form to use.

If one or both of these approaches would be considered a good indicator but the sales comparison approach is still considered reliable without them and, the client insists on this form anyway, it becomes a Limited Summary Appraisal Report. Now you need to do an addendum explaining the departures involved.

A drive by only is completed the same way only with extraordinary assumptions and additional disclaimers. I call these 'Blind' appraisals.

I prefer the 1004 but the 2055 is just fine for many appraisals. In any case, you still need to do all the necessary due diligence, form 2055 requires additional comments and I charge the same full fee for my opinion of the value no matter what form they want. The time savings is minimal.

Hope this helps. If you need more, let us know.

 

[LavellB]

As always, there are exceptions to the rule. See page 3 of the Fannie Mae Form 2055, item number 9 does an excellent job of stating the intent of this form.

I'm sure there are situations with special use properties that only one approach may be considered a complete appraisal.

 

[Larry Lyke]

Outlaw --

I usually caution against long rambling addenda. They have the same affect a salesman does when he talks too much -- i.e., buys his own product back because the Customer loses interest OR gets confused.

Therefore, for most reporting forms that are kinda of complete in their own right, 2055 case in point, an addendum ought to be used to address a paricular situation. AND, like Pam said, if the situation requires much doctoring or is quite complicated, a 2055 is probably the wrong appraisal report form to use.

 

[Larry Lyke]

Outlaw --

I usually caution against long rambling addenda. They have the same affect a salesman does when he talks too much -- i.e., buys his own product back because the Customer loses interest OR gets confused.

Therefore, for most reporting forms that are kinda of complete in their own right, 2055 case in point, an addendum ought to be used to address a paricular situation. AND, like Pam said, if the situation requires much doctoring or is quite complicated, a 2055 is probably the wrong appraisal report form to use.

 

[lisawilson]

I agree with the others against long addenda. However if I use the 2055 at the client/lender request, with an interior inspection. I go thru all the steps at the time of inspection as I would for a 1004. I do include the sketch, photo pages and maps with the report. I charge the same fee, the small amount of time saved by using the 2055 does not get the client/lender a break on fees.

 

[Larry Lyke]

Here goes the scale... tip... tip... tipping.

Not the Neighborhood, Neighbors, but the Formite scale.

Lisa, I charge the same fee as for 1004, too. With an interior inspection I give a Sketch. No matter what the property, I do the same inspection (except FHAs). You get all the stuff you get with a 1004 (photos, Location Map), except on a different main form.

I think it takes me as long to perform a 2055 as a 1004.

IN FACT, my lending business in the past year has morphed into 2055s that have all the accountrements (accompaniments?) of a 1004 but are on the 2055 form. At first I was getting a few drive-by requests, but that didn't last more than about 3 months.

 

[lisawilson]

Larry,

I too have noticed a large increase in 2055's. I don't give much of a discount for a drive by, usually about $25.

Do you or anyone else out there think that is too little? or to much? for a drive by over a full inspection?

8)

 

[lisawilson]

Larry,

I too have noticed a large increase in 2055's. I don't give much of a discount for a drive by, usually about $25.

Do you or anyone else out there think that is too little? or to much? for a drive by over a full inspection?

8)

 

[lisawilson]

Larry,

I too have noticed a large increase in 2055's. I don't give much of a discount for a drive by, usually about $25.

Do you or anyone else out there think that is too little? or to much? for a drive by over a full inspection?

8)