Additional Comps after Effective date

[timd354]

I have been getting a rash of lenders lately asking for additional comps after the effective date of the appraisal. Just had one recently that I inspected in March and they wanted 2 new comps that sold within the last 3 months after inspection. I have been telling them that they need to order a new appraisal as my effective date was 3 months ago and they squak. How do you folk handle these types of requests?

Just say no to drugs and requests for new comps after the effective date of the appraisal.

 

[David Sawyer]

My first question would be, "Provident?"
Dumb MBs promise the 1/4% lower rate and think
they're going to be the one that gets the brass
ring. Only the lucky few get the grass ring.

Once you meet the Provident 'new' comp
requirement, you'll get the closer, bracket,
requirement, followed by the list of 13 sales
and your asked to explain why you didn't
use them. Many MBs hate Provident and
will have nothing to do with them.

I assume by your reference of Provident "new" comp requirement, you mean all comps within 1/2 mile radius. Last time I was presented this I maintained it was a new SOW and an additional $$$ in fees!

 

[Elliott]

David,
I find its easier to write, "There have been no new sales within 1/2 mile of the subject
property since the date of the original appraisal." I don't know what Provident is
trying to prove, but its not realistic for most markets. Maybe Mentor can enlighten
us. I had one that had a 37% LTV and they pushed the comp requirement, I gave
them a MLS sales map that showed no sales.

 

[KD247]

Three months later? They're probably trying to sell the loan and using your efforts to reduce due diligence costs. If you can figure out a way to provide new data while remaining USPAP compliant, then it's your business decision whether to do free additional work or not.

 

[Joyce Potts]

There are two schools of thought on this. One is the contract date when the meeting of the minds took place. That assumes it's arms-length, etc.

The second will say the meeting of the minds is secondary to the closing table where one is asked to put their money where their mouth is. And there is some truth to that.

I've often argued that the closing table is really about the legalities where the paper work and transfer of title takes place, and for the most is a formality. That said, I wish I had a $1 for every closing that never made it to the closing table for a variety of reasons.

I've always seen both sides of this argument, but when push comes to shove--IF I can qualify the pending sale that was in existence at the time of my 'effective date', it's usually a handy dandy piece of pertinent information that I'm likely to include AND WEIGH into my analysis and/or value opinion.

Especially given my current market where I continue to see better supported value 'ranges' based on current list prices that are often BELOW the historic, or last closed sale, sometimes as recent as 30 days.

 

[vargasteve]

I've dealt with Provident as a borrower & appraiser (just finished one that was a pain) They are difficult, and I very much dislike doing appraisals that are going to them - its a tight jacket. The conditions are from a 'vaccum', and you often have to use terrible comparables to meet the guidelines and throw away the better ones. Yuck.

 

[vargasteve]

In the old days no UW or appraiser would discuss a comparable that fell subsequent to the date of appraisal. It is not fair to have an appraiser do this additional work that was not available during the assignment. I'd have to check but... I don't believe USPAP even addresses the use of comparables after the date of inspection as it is assumed to be 'off the table' for consideration.

 

[Rufus]

... and you often have to use terrible comparables to meet the guidelines and throw away the better ones.

Not a good idea. When I have a lender with guidelines that violate USPAP, I still use the best comparables as 1, 2, 3, and 4+ then put in the ones their guidelines require after that. And explain why I did so.

 

[RSW]

Not a good idea. When I have a lender with guidelines that violate USPAP, I still use the best comparables as 1, 2, 3, and 4+ then put in the ones their guidelines require after that. And explain why I did so.

I'm with you Rufus!