Appraisal ESP-"I have lost the gift!"

[Tim Hicks (Texas)]

I just got off the phone with Certified Funding. They are working on a second lein on a property that sold and I appraised. The second lein is to avoid PMI. It seems they don't like a range in the predominant value box. Well, when you have homes within a couple of miles as low as $50,000 and as high as $1,000,000, I think a range of majority home sales is in order. Fine, I will change it to one predominant price. Let me get my crystal ball out and figure that out. If I put less than the sales price they will ask me to address it, duh. Next, we need you to change the subject to "rural" because two of your comps are over two miles away. First, this area is not rural. There are over 50 subdivisions in this area outside the city limits with most having one acre tracts. Of course, mine is located in a 14 house addition with no sales in the past year, so all my sales are 1-2 miles away. But, mapquest says one is 4.3 miles and couldn't find another. Gee, do you think that maybe mapquest could be wrong. I use Alamode's mapping and their geocoding was wrong too, but they allow me to place the comps and subject exactly on the streets where they belong and they figure the correct distance for me. So, I know that my comp distances are correct and accurate. "Well, I am sorry, but we and our investor use Mapquest and we will use our distances. Unless, you can provide closer comps, then you must check "rural" or our investor will not loan the money". Then, I lost my cool. I simply stated that this investor does not set appraisal guidelines and I was not changing anything. I pointed out the primary lender was adamant about it not being "rural" and they had no problems at all with my appraisal other than addressing why my comps were over a mile.

Ten minutes later, I get the call from the loan officer. Why am I being so difficult? Just do this so they can close the loan. Why do I bother sometimes? I should have been able to foresee that the lender only wants one number in the pre-dominant range and I should just check all the boxes and let them erase the ones they don't want to use. Or, leave them blank and just ask the lender to check whatever boxes fit their guidelines. I should also fake laryngitis to keep myself out of trouble.

Just who does set appraisal guidelines and why do lenders have their own?

 

[Ray Ohler]

with the BS that has been going on for quite some time now. These "second loan" lenders who (are now growing by leaps and bounds - several "well known" banks are getting into the act) are used to appraisers who will do anything they want are probably going to be in for multi-billion dollar losses, but it won't matter because they'll be TOO big to go under by then. Taxpayers and borrowers will foot the bill. It doesn't matter anymore. Dot your i's, cross your t's and stick by your gut instinct. Unless of course, you want to just rake in the money and when it falls, it falls. Just be sure you have YOUR golden parachute. I seem to have misplaced mine. :lol:

 

[jtrotta]

Tim;
over the years I've always wondered why we had to be so "consistent" and no one else is. A few years back felt the need to ask so I did and the answer was as diverse as the market itself, so follow the rules you know; question those that you are not familiar with and don't change anything FNMA; USPAP and your Local State Law demands; as you are the only one responsible for your report.
Oh by the way, if they want you to conform to their rules; requirements; and their investor requirements, just ask for the request in writting with a "Hold Harmless" agreement for you and your company. 8O


Go git em 8)

 

[Charlotte Dixon]

Hmmmmm....Hold Harmless Agreement? :roll: I think I need to print up a few thousand of those. Don't we feel like we are just puppets? We do the appraisal, then they want us to change the data to suit the investor. I had one yesterday...change this, change that, add a new comp AND change the sales price to my appraised value, which is $1,000 above the original sales price. I'm pretty stubborn about changing anything. This "creative" financing the brokers do really makes me nervous. I told them if they got me an addendum signed by all parties involved in the transaction, I'll change the sales price. Agree?

 

[Joe Birrell (NY)]

Here's my new response when asked: why are the comps so far away ?
Cause that's where they were built ! It's endless nonsense with these people. Yesterday, some LO told me the "investor is God" therefore I should comply with any request they have ! Incredible !

 

[Larry Lyke]

The Investor god is omnipotent AND prescient -- and knows when you're good or bad. And if you don't think so, he can see you relaxing doing your next appraisal so calls to annoy you just to remind you he still a plausible menace.

This time around for the next widdle while, he gonna be a whigt wabbit!

 

[Mike Garrett RAA]

$50,000 to a Million? I can understand why they are upset, doesn't fit their little box.

Now, realistically, do you really believe that accurately reflects the neighborhood? I have been including a market analysis with my conventional stuff. I look at at, then I massage it by eliminating the extremes. Remember your appraisal education class concerning the mean and the mode?

I once had an appraiser tell me the entire Pikes Peak region was the "market" NOT! Same holds true with value ranges, one should be more specific than $50,000 to $1,000,000...in my not so humble opinion!

 

[Mike Garrett RAA]

I forgot to mention....USPAP sets the rules, would you like to have a copy, mr lender? It's available for $25 and there are classes given nearly every where on why "all users of appraisal services" need to comply!

By the by, rural is perfectly acceptable to FANNIE MAE, just ask them!

 

[Tim Hicks (Texas)]

Mke, you can't tell me that you don't have areas in Colorado where you travel down a county road where the city ends and you have 40-80 year old shacks and then you turn on one of the side county roads and you have older subdivisions and new exclusive subdivisions or you might have a million dollar ranch that borders the same county road. Nearly all the big cities in Texas have suburbs and small towns with these characteristics. I believe in reporting the facts. When you have an area with several small additions, some with 10-12 lots and some with over 100, there can be diverse range in the market. I try not to restrict neighborhood data for a 10 lot addition to just that addition, especially if it is not fully developed. I developed a market listing of sales and listings within 2 miles each direction and sure enough there were sales as low as $50,000 and as high as $950,000. Now, consider the properties that are not offered on the open market. There certainly are some properties that would not get $50,000 and I am sure there are some owner's that would swear their properties are worth over a million. Remember, I said this was well deveiloped area outside the city limits. I consider the neighborhood to be the area that would problably share the same gas station or convenience store. Now, if it had been a large addition, I would have restricted the range to that addition. Anybody that says they can set the predominant value to one number is opening themselves up to debate. I always give a range for predeminant value and I base it on majority sales for the area. Median and mean can be skewed by parameters, too. I stick to what the market data shows without low or high parameters. Sorry, not enough time to spell check.