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AMC asking for site valuation on a 2055

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Cheryl Long

Thread Starter
Freshman Member
Joined
Nov 3, 2002
An AMC has asked me to complete a 2055 with an interior inspection and provide a site value :( . The only way to provide a site value in my area is by the land abstraction method, which means I must complete a cost approach :( :( . Is anyone complying with these requests? My first instinct is to ask them if they want me to complete a 1004 which will provide them with this information or complete the 2055 and forego the site valuation :lol: . I know I'm going to sound like a broken record, but I'm tired of being asked to complete 1004 work on a 2055 budget :evil: . I know I could always increase the fee for the 2055, but I really don't want to create my own cost approach on a text addendum, nor do I want to create a 1004 for the purposes of filling out the cost approach. What is everyone else doing?
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
There is nothing that says you can not provide it for them, but It is just a lender's attempt to get more for their money. Do they pay less for a 2055? If it was me I would tell them, "if you need site value, then you need more than the 2055 form. I will be happy to provide a full URAR appraisal with site value for $zzz". If it is a regular client, then you may want to oblige them. If not, don't give them anything extra for free. We appraisers need to quit being manipulated and used by lenders for pennies when they are making dollars!
 

mbrunson

Sophomore Member
Joined
Jan 29, 2002
Professional Status
Certified Residential Appraiser
State
Nevada
Cheryl,

It sounds like you answered your own question. If the lender wants an analysis of the land value, they are asking for more than a typical 2055 report. Call and negotiate your increased fee. How you deliver what they want is all part of the negotiation.

Remember that our service consists of three elements.

Time
Scope
Money

Let the client pick two and you keep one for yourself.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Cheryl:
as others above:
1. Fee increase is in order they want Cadilac instead of Yugo, may be a stripped low end model Cadilac, but charge 'em a cadilac price :evil:

2a. IF you must provide the site value through extraction only: Cannot your software clone a simple (1004 form) copy of the report to generate the cost approach (through extraction if necessary?) then print the appropriate page toss into your file and delete the 'duplicated' report!

2b. Remember the report FORM is a summary report, all you need for the client is a single line: site value = $x! How you get that number is up to you the appraisal expert!
 

Willie

Senior Member
Joined
May 30, 2002
Professional Status
Certified General Appraiser
State
Tennessee
I didn't know that you had the option of not putting the site value on any appraisal. I have always done it period. I guess I need to go back to the books to know for sure. Apparently some are not putting the site value and maybe I'm wasting my time. Do you know for sure you don't have to do it on a 2055?
 

Ida S. Romo

Senior Member
Joined
Oct 13, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Cheryl,

I charge the same for both reports (the work is the same) and they always upgrade to a 1004. I believe that we are required to complete at least 2 approaches to value. Whether or not the cost approach is a part of the report, it should be completed and kept in the file.

Ida
 

Cheryl Long

Thread Starter
Freshman Member
Joined
Nov 3, 2002
Thanks for all your timely responses :D . I agree with Tim, I don't want to be manipulated for pennies. For that I must charge the BIG bucks. Lee Ann, you are right I can clone the 2055 and complete the cost approach, it just takes longer and I want to be compensated. I haven't worked for this company before and I don't want to hear the ever popular "You are the only appraiser who wants to charge us more" without knowing the facts from other appraisers. It sounds like Ida has the right idea. You go girl :!:
 

Rob Bodkin

Junior Member
Joined
Nov 9, 2002
Professional Status
Certified Residential Appraiser
State
Washington
We just got this same request for the first time this week and completed the cost approach on a form that we built. We had done a typical 2055 interior/exterior and had not completed the cost approach. The lender said that the underwriter called for this approach, but I frankly think they were using the report to bind coverage and the insurance agent wanted to see replacement costs. We provided the addendum along with a bill for $75.

On the approaches to value and reporting of them. USPAP requieres us to consider and use any and all approaches to value that are applicable and neccessary (did I spell that right?), unless we want to depart. Not reporting/using a certain approach is not departure unless that approach was applicable and neccessary to produce a credible result/opinion.

Technically we should have the cost approach on most deals in the work file when we are completing the 2055. The fact that the form does not provide space for it does not determine whether we should use it or not. Again the form is just a vehicle for reporting the results of our work.


Rob Bodkin
Freestone Partners
 

George W Dodd

Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Why is the site value being associated with only the cost approach. Isn't the one of the first steps determining the HBU of the site as vacant?

Without a site value how could you make any adjustment for differences between subject and comparable sales?

William said:

I didn't know that you had the option of not putting the site value on any appraisal. I have always done it period

I have always done the same, guess it must be old school
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
It sounds like the report was being done for ABN-AMRO. They are big on site value disclosure.

I always put site value in if requested, on high site value to value ratio properties such as waterfront and as often as I remember to on other properties on 2055's.

There is no more work in putting site value in because you already have it. Remember that the first thing you do in an appraisal is to value the site as vacant. That’s all appraisals. Not just 1004's. If you don't, what do you use for basis for a site adjustment. Oh sure, if you are one of those people who have 3 comps on the same street or in the same sub, you may be able to get away with not doing a site adjustment. But if you made a site adjustment in the sales grid, then you will have had to value the site as vacant in order to have a point of reference from which to make any adjustment.

I think site value is a legitimate request and not a big deal to include.
 
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