Can I require the lender to add a 1007 Comparable Rent Schedule if the majority of homes in my subject's market area are rentals?

[George Hatch]

The good news in this situation is that if rental-driven investors do comprise a large percentage of the buyers then the data it takes to perform a GRM analysis will be easy to collect.

As for occupancy, airBnB and vacation rentals are other examples of occupancy which don't affect the legal or physical attributes of the property, and in most cases they don't alter who the typical buyers are or how those buyers will proceed to use those properties.

After all, that's the entire purpose of performing an HBU analysis in a MV appraisal in the first place - to identify upon which basis the subject is most likely to sell in the open and competitive market (and so on) so that you can identify other transactions which are comparable on that basis. What types of buyers are the most typical and how THEY are basing those purchase decisions.

 

[sputnam]

No. You can't require the Lender/Client to add anything to your appraisal report.

 

[Wayne Henry]

Hey all, this is my first post, I hope it comes out coherently!​

"There are three family members living on the property. There is no lease agreement between the ********** Trust (The property is currently owned by a family trust and is being purchased by relatives of the family) nor will there be one. One of the grandkids is leaving to New York in the summer and the other two kids will be going to ASU, but grandpa and grandma ********** will let them live for Free. **** and ****** ********** (The Buyers) will use the property as their 2nd home, and will never lease it out to anyone, including their grandkids. No comparable rent survey needed."

Good morning; my only advice for posting is to hold off on the asterisks because they may use document readers for the long post, and the robot reader saying asterisks can be mind-numbing.

 

[J Grant]

If many of the competing houses are used for rentals, then that would be baked into the sales price of the houses. Which is why in so many cases a GRM is redundant since it uses sale prices. ( a simple income and expense statement imo tells a more accurate story)

So just explain the fact that many are rented, that income stream potential is baked into the sale prices, comment as needed and move on.

The lender does not want you to develop an income approach because doing so could kick the loan out of owner occupied res category into the investor /rental category at a higher interest rate ( and possibly lose the approval for financing for a borrower)

Despite the fact that many of the houses are used as rentals an owner can still purchase one and use one for owner occupied use , which seems the case with this borrower, at least as how the client ordered the appraisal. So comment that many of the houses when used for rental compete with owner occupant buyers so the prices speak to the value of the fact that a number of them are used for rental being that they are in close proximity to a university. As another poster said, if you want to develop an income approach to confirm your value keep it in work file.

 

[Tom D]

i believe that any requirements we have from anybody are only the minimal that they require. you can write a 100 page report if you want.
i got rid of 10 pages last year form my report to teach them a good lesson to not know what i think is important.