Assignment conditions - Use At Least One Comparable Outside of Subject Neighborhood

[shrubberyvaluation]

This^^^

I feel pretty sure they meant subdivision. You can either have them clarify it or simply use one outside of the subject subdivision in the report as required by F/F.

Hopefully, they typically take a few days to respond, but thats not my problem.

 

[shrubberyvaluation]

why does it have to be an entirely different neighborhood "? Use a similar /competing recently built neighborhood.

You don't apparently understand the reason for getting away from builder sales...........

I understand the reason, that is why I have resales in the report and they are useful for valuation. I have no problem going to another neighborhood if there is a lack of sales in the subject's neighborhood.

 

[The Warrior Monk]

It seems a stretch to go to an entirely different neighborhood just to get away from builder sales.

I completely understand why they are doing it, because cost does not necessary equal value. That is a major issue with new homes. If the builder is simply sell stock homes with no customization, it's less of an issue, but even then, it has to be established that they are arm's length.

We seen some real world issues with this. The most recent was a condo complex, where the builder handed us a list of a handful of sold sales, and boatloads of units under contract. After scrutinizing the corporate transfers, people's addresses, and other internet searches, we were able to establish these were not arm's length transactions or contracts. The units did eventually sell a few years later in arm's length transaction, but for notably less.

 

[shrubberyvaluation]

Look, I don't really care what folks do in their practice - I don't sign their reports. I was just pointing out: (a) the F/F requirement, and (b) that the requirement includes the word 'must'. What folks do with that information is up to them.

I saw the word must, I didn't see the part about must use a sale outside of the subject's neighborhood. So it has not always been a Fannie requirement.

 

[The Warrior Monk]

I'm pretty sure whomever wrote that SLA was referencing the F/F requirement. You can always call to verify that they didn't mean 'neighborhood' but rather 'subdivision'. Seems you're building a hill to die on where it's not necessary to do so.

If you can speculate, so can I.

It's been my own personal experience in my career that somebody in the chain of the mortgage process is not aware of the actual requirements.

 

[alebrewer]

If you can speculate, so can I.

It's been my own personal experience in my career that somebody in the chain of the mortgage process is not aware of the actual requirements.

Again:

"Look, I don't really care what folks do in their practice - I don't sign their reports. I was just pointing out: (a) the F/F requirement, and (b) that the requirement includes the word 'must'. What folks do with that information is up to them. "

 

[jay trotta]

It would be misleading because I am skipping over all the comps in the subject's neighborhood to use a sale that is not relevant for the valuation.

So are you saying that outside sales are All of a lesser value ?
Not competitive ?
Are you keeping all that information in your work File ?

 

[shrubberyvaluation]

So are you saying that outside sales are All of a lesser value ?
Not competitive ?
Are you keeping all that information in your work File ?

I meant that more locationally relevant sales are typically better indicators for market value. Skipping over competing communities to go outside the neighborhood seems like bad appraisal practice unless there is a compelling reason to do so.

 

[J Grant]

I meant that more locationally relevant sales are typically better indicators for market value. Skipping over competing communities to go outside the neighborhood seems like bad appraisal practice unless there is a compelling reason to do so.

well common sense would have meant understanding the client did not intend for you to do that, and if they did it is a not acceptable assignment condition.

 

[shrubberyvaluation]

well common sense would have meant understanding the client did not intend for you to do that, and if they did it is a not acceptable assignment condition.

I have done enough things that I thought were common sense over the years that turned out to be wrong. Made a stupid mistake of not asking my client a condo unit number years back when it was not on the order. I checked the contract and saw it was unit 1. Of course after inspecting and looking at more of the contract I found out there was an addendum that they switched to buying unit 2. On a side note how does fannie define subdivision or project. If you have say "New Estates 1" "New Estates 2" "New Estates 3" etc are these separate and considered outside of the subject project if between these? Like your subject is in "New Estates 3" and there iare reales in "New Estates 1" do you still need sales from other areas?