2065 -what Is It ....

[Farm Gal]

OK folks help me out here:
I think I got ONE 2065 order right after the form came out and about the time I took a "limited appraisal class"...I have not performed one in at least the last 2-3 years :

Please advise on the following in terms of PRESENT PROFESSIONAL PRACTICE...

1. I am inclined to name the thing a Limited Summary report. right?

2. Considering the present level of use of this form, and assuming that scope, intended use, intended user, and purpose and all that other stuff are properly filled out and considered:
(ok here is the REAL question)
In the development of the report () IS it necessary to make specific dollar adjustments for the "+" and "-" (like on another piece of paper?)... OR within the scope of the appraisal is it permissible and REASONABLE professional practice to take three comps and use our professional judgment to develop a value opinion for the bottom line by saying the subject is most like (reconcile as needed) sale(s) blah-blah and heres my opinion of value?

Thanks~

 

[Pamela Crowley (Florida)]

I'm in about the same position as you on that one, been years since someone asked me for that one. I HATE that form!!!

I would definately call it "Limited".

IS it necessary to make specific dollar adjustments for the "+" and "-" (like on another piece of paper?)...

I would.

OR within the scope of the appraisal is it permissible and REASONABLE professional practice to take three comps and use our professional judgment to develop a value opinion for the bottom line by saying the subject is most like (reconcile as needed) sale(s) blah-blah and heres my opinion of value?

You could.

 

[Chris Harrison]

Lee Ann,

Yes and yes.

It is a limited report, subject to the Departure Provision unless you otherwise indicate.

and

"use your professional judgment to develop a value opinion, blah, blah, blah...

As always ya got it right from the beginning :yellowblack:

Chris

 

[Austin]

The AI has a couple of good guide books out on how to do the 2055 and 2065 forms. Gives all of the USPAP support and lets you know where you stand. That way if you get caught you can blame it on the AI and the AI ain't taking the rap for nothing, or in other words, you are home free because you have the good old boys on the state appraisal boards with their backs against the wall.

 

[Pamela Crowley (Florida)]

:rofl:

Very useful excuse Austin!

 

[George Hatch]

We're talking about the 2065 format, aka Fannie Mae Desktop Underwriter Qualitative Analysis Appraisal Report, no? The one that is formatted exactly like the 2055 form, right down to the label on the front page that denotes this as a "Summary Report", and the Appraiser's Certification No. 9 that invokes the Departure Provision (Rule) in USPAP, thereby making this a Limited Appraisal?

You would treat this just like you would a corresponding assignment using the 2055. If you can show how a 2055 is a Complete Appraisal (a concept with which I still disagree), you should be able to do exactly the same thing with a 2065. The only difference between the two formats is that the 2055 uses our old friend, the Quantitative Analysis method, while the 2065 uses the Qualitative Analysis method. So, for the 2055, you develop quantified adjustments for your comps, just like you would in a URAR. But in the 2065, you're supposed to bracket your subject with your comps; rate each aspect of the comps as being equal, inferior or superior; rank your subject overall among your comps; and finally, pick your opinion of value from the range indicated by the otherwise unadjusted range presented by your comps.

To repeat, the 2065 does not use quantified adjustments, so you don't have to develop, support or justify why an additional bathroom is worth $3,000 rather than $5,000, or make any other monetary adjustments to the comps. You only rate the aspects and then rank the subject among your data range. It's very similar to how buyers and sellers operate in the real world. They look at a ton of listings, figure out where the subject fits in among the range by comparison, and then make their opinion as to what it's worth.

The only difference in using this format from what the buyers are doing is that the form will allow you to only use three sales for your range, when really, a knowledgeable buyer would want to use as many as they can find. It's interesting to note that the original pilot version of this form was set up with 5 comps rather than 3 on the front page grid; at least 3 were required, but the appraiser was encouraged to provide all 5. Fannie later trimmed it back down to 3, so that's what we have now.

 

[Austin]

George:
I think what they are doing with the 2065 is using intuitive regression analysis to account for the covariance of variables and sequence of adjustment problem. They know that if you make adjustments out of sequence or make line item adjustments with no consideration to covariance of value factors that you can seriously over or under value the subject. By using a qualitative approach they are essentially averaging out the influence of covariance and incorrect sequence of adjustments by treating the sale prices in the aggregate. Some one that knows what they are doing can look at the data on the 2065 form and make their own final reconciliation as to indicated value and probably end up with a better opinion of value that a full 1004 adjusted incorrectly.
Based on my experience that is what they are accompolishing, but I can’t say that they actually realize or understanding what they are doing.

 

[Farm Gal]

Thank you VERY much, all posters and especially (of course) George!

Your post fits with my old notes, but my concern was that 'current' practice had migrated... as appraisal practice has a tendency to do! Austin i have class notes, and that booklet IS someplace around here but I can't lay my hands on it at hte moment. ALL my resources are several years old...

annddd I errr... have tended to kinda sleep through any recent appraisal classes that referenced this particular form and appraisal as I *never* get orders for it...

never say never :redface:

 

[Mountain Man]

I don't like the 2065 either. I my rural market, we rarely have any truly comparable sales..... they all have large adjustments. I usually just don't feel comfortable with a qualitative market grid, so I give 'em a 2055 anyway.

 

[rtubbs]

Lee Ann,

I don't do many 2065s but don't really have a problem with them. I charge a little more and here's the reason. I prepare the appraisal on a form 2055 (either limited or complete) and make quantitative adjustments, as appropriate. I form my opinion of value from that data. I then set up a form 2065 and import all of the form 2055; change the comp grid to +, -, or = and I'm done. Having said that, I try to convince the requestor to go with a 2055 and they usually concur. Good luck.