Any new construction review appraisers out there?

[NC Appraising]

If someone from FHA told me that I would have read them the definition of market value on the 1004 form, which says explicitly to not do that.
View attachment 77115

I have had several AMCs in the LOE to tell me that the appraiser must make dollar for dollar for dollar adjustments for FHA.

I ignored them. If FHA wants to blacklist me, go ahead. FHA should not allow for any SC.....cannot be a hypocrite.

 

[jay trotta]

"I contacted FHA and then sent them the sheet from the Builder
BOOM - FHA stated that those fees should be reports and adjusted dollar for dollar just as I did it in my report
and They also, with the builders sheet in hand, stated they would place DR Horton on a Watch List
to see how other Appraisers reported on Sales within there reports
James

RE: Per Post# 9 -If someone from FHA told me that I would have read them the definition of market value on the 1004 form, which says explicitly to not do that.
To whom did JP speak with would appear to be the question (you just can't Trust anyone on the lending side).

 

[Trihard]

The amount of bull**** appraisers have to deal with for the low amount of pay is off the charts.

 

[CGinMN]

Not only is it in the definion of market value it is re-stated in the HUD handbook.

What if the home was only on the market for 1 day, listed at 290k and sold at 300k and had 8k in SC. Would it have sold for more if it was exposed to the market for a longer period?

See above. Adjustments are made to market expectations, not the specific terms/conditions of the sale.

 

[Mark K]

Believe it or not, the market does not always go dollar for dollar. No matter what your intuition or own biases tell you.

For those that believe that mandates on pre-printed forms are the best source for appraisal practice, ignoring reality is probably the safest path.

I used to own a real estate brokerage and have appraised long enough to realize that the typical buyers and sellers are intelligent enough to realize that a $ is worth a $.

Seems FHA believes the same.

In this state, the appraisal board has sanctioned appraisers for NOT adjusting $4$. The board also doesn't care about a form that is designed to artificially inflate values.

 

[George Hatch]

Whatever the other sales are doing demonstrates the effects of these variables. Your control group will consist of purchases with all-cash or low LTV financing terms.

 

[CGinMN]

Let's unwind this conversation and make it a little more applicable to current events.

Since minority borrowers are more likely to use FHA financing.
And since FHA financing is more likely to involve seller concessions, often up to 6%.
Then an appraiser who automatically applies adjustments based on their own personal bias of how they believe the market should respond, rather than an analysis of the market, is a sitting duck for an appraisal bias claim, possibly even disparate impact/racial bias.

So good luck with that.

 

[J Grant]

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.

The PRICE was unaffected (not what a buyer and seller thinks it should be or a rote dollar for dollar )
If a sale concession did not affect price then what basis is there for adjusting for it?
Sometimes it is just an incentive to move a property faster. Compare to prevalent financed sale prices without concessions.

 

[NC Appraising]

Let's unwind this conversation and make it a little more applicable to current events.

Since minority borrowers are more likely to use FHA financing.
And since FHA financing is more likely to involve seller concessions, often up to 6%.
Then an appraiser who automatically applies adjustments based on their own personal bias of how they believe the market should respond, rather than an analysis of the market, is a sitting duck for an appraisal bias claim, possibly even disparate impact/racial bias.

So good luck with that.

I disagree. In my market FHA is used by all. Most are first time home buyers or people with low DP or credit scores.

 

[NC Appraising]

Not only is it in the definion of market value it is re-stated in the HUD handbook.

View attachment 77119

See above. Adjustments are made to market expectations, not the specific terms/conditions of the sale.

.....of the SALE OF THE SUBJECT. Big difference. IE you do not CARE about the subjects amount of SC.
Read the top part of your post....

The adjustments for seller concessions for Sales reflects the difference between what the comparables actually sold for with thesales concessions and what they would have sold for without the concessions so that the dollar amount of the adjustments willapproximate the reaction of the market to the concessions.