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30 day value only on the 1004?

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Appraisal Santa Fe

Thread Starter
Sophomore Member
Joined
Mar 27, 2008
Professional Status
Certified Residential Appraiser
State
New Mexico
Hi guys,
Well I've done a couple REO appraisal where the client wanted a 30 day value.
I stuck in the REO addendum page, did my research and placed my value in that page. This client wants the 1004 report to reflect the 30 day value without an addendum. I dont have enough REO comps (maybe 1 or 2 in the last 2 years and they are nothing like my subject property) to run in the sales comparison grids effectively.
Basically the problem is my value is too high in the 1004 and the value I came up with in the addendum is perfect but they cant use the addendum for some reason :new_2gunsfiring_v1:

What can I do to reflect the value in the main part of the 1004 that wont send up red flags as it will be substantially below the value based on my comps?



Hope that makes sense. Any help is appreciated.

Richard
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
What definition of market value are they wanting you to use? Have them read the definition reported in the Fannie Mae 1004:

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a
reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.

Would the 30 day value requirement fit this definition of market value? It depends on if homes are selling close to 30 days or not.
 

Tom Barclay

Senior Member
Joined
Apr 7, 2002
Professional Status
Retired Appraiser
State
Oregon
What can I do to reflect the value in the main part of the 1004 that wont send up red flags as it will be substantially below the value based on my comps?


As RSW stated, they require the use of the 1004 form with all it's preprinted definitions. Who cares if it sends up red flags when they want to change the definition of Market Value as defined on the form. If that is your SOW, then you have to find comparables, no matter how dated, or different, or distant. Then make the appropriate adjustments gleaned from the market and adequately supported. The lender always seems to want to make the square peg fit into the round hole, and make the report nice and neat. If it isn't possible, it isn't possible.
 

AnonApprsr

Elite Member
Joined
Jan 21, 2008
Professional Status
Certified Residential Appraiser
State
Massachusetts
Be very careful doing this.
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Hi guys,
Well I've done a couple REO appraisal where the client wanted a 30 day value.
I stuck in the REO addendum page, did my research and placed my value in that page. This client wants the 1004 report to reflect the 30 day value without an addendum. I dont have enough REO comps (maybe 1 or 2 in the last 2 years and they are nothing like my subject property) to run in the sales comparison grids effectively.
Basically the problem is my value is too high in the 1004 and the value I came up with in the addendum is perfect but they cant use the addendum for some reason :new_2gunsfiring_v1:

What can I do to reflect the value in the main part of the 1004 that wont send up red flags as it will be substantially below the value based on my comps?



Hope that makes sense. Any help is appreciated.

Richard

Do you mean they don't want the REO addendum, or any addendum? Not clear from reading your post. You need to be clear on what you're doing. Here's one way. On page 3 under additional comments you could explain that the client wants the MARKET value adjusted to reflect a 30 day, or liquidation value. I would then include a definition of liquidation value. Then you could make a market adjutment on the grid (based on REO or other sales) to reflect this and reference that the specific data is in your workfile. Big question: What is the intended use?
 

Appraisal Santa Fe

Thread Starter
Sophomore Member
Joined
Mar 27, 2008
Professional Status
Certified Residential Appraiser
State
New Mexico
Thanks for the responses,
Their request is:
"Please provide a current as in fair market value for the subject REO property based on the subject's present corresopnding condition, give a Portfolio Market Value Defined as a 30 - 60 day marketing value."

Is there a different form I should use than this? It's a full appraisal with interior inspection. I was told they only look at the appraised value on the report and not the 30 day value given on the addendum. One problem is the lack of REO comparables in the area.

Richard
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
It sounds like they want you to provide the REO Addendum which will allow you to give several values. Pull this addendum up in your software package and study it. It may answer you questions.
 

Appraisal Santa Fe

Thread Starter
Sophomore Member
Joined
Mar 27, 2008
Professional Status
Certified Residential Appraiser
State
New Mexico
They dont look at the REO addendum. :-/
 

joe huffman

Junior Member
Joined
Sep 20, 2004
Professional Status
Certified General Appraiser
State
Missouri
you can not add a REO addendum to the Fanniemae form 1004
 
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