Client wants more information

[Dennis J. Black ASA IFAS]

Every time I read a post complaining about how a client/UW wants more sales I always wonder about the neighborhood description. If there are a limited number of sales in an area the appraiser should be writing a more comprehensive neighborhood and market conditions section of the report.

Some of the markets I have seen described in this forum I would assume would come with a 2 or 3 page neighborhood and market condition. If that was done the appraiser could then just respond by saying “read the addendum” If there are a limited number of sales give the number of sales and write about EVERY ONE of them. Clearly the reader is not being convinced by the report that the appraiser has fully and completely researched the market.

Strong report (persuasive) writing skills are just as important as good research skills.

 

[Mike Boyd]

Dennis....It seems to me that you are suggesting a narrative report rather than the summary most lender clients want. The first page of the 1004 report is ALL about the market. If a reader cannot interpret this then the form is all wrong or the interpretors lack the skills necessary for their job. Granted: many appraisers do not do a good job even in filling out the report. Maybe more training (CE)classes should be designed or created to stress the importance of this page.

 

[PropertyEconomics]

Dennis....It seems to me that you are suggesting a narrative report rather than the summary most lender clients want. The first page of the 1004 report is ALL about the market. If a reader cannot interpret this then the form is all wrong or the interpretors lack the skills necessary for their job. Granted: many appraisers do not do a good job even in filling out the report. Maybe more training (CE)classes should be designed or created to stress the importance of this page.

Mr Boyd you bring up an interesting point, however, it is also noted that the top of the second page of the report identifies the number of COMPARABLE sales from within the subject neighborhood as well as the number of COMPETITIVE listings. I agree that the reader has some responsibility in reading the data as well.

 

[Mztk1]

I believe the purpose of the new form, when it came out, was to allow the appraiser to provide more narrative instead of checking boxes.

My market conditions fill out the box on page one of the URAR for market, take up about 2/3 of the space in the "Comments" section on page 3 of 6, and then about 1/2 to 2/3 of an addendum page are filled up with market condition comments on every report.

The neighborhood section is concise but inclusive, unique for each report.

Knock on wood but I have had only one request for an additional comp in the past 3 years or so, and that was about 6 months ago. I'm in one of the more difficult markets too, so I think Dennis may have a good point.

 

[Vernon Martin]

I think this is one of the issues which separates those appraisers who care about their clients from those appraisers who don't care about their clients.

 

[Chris Colston]

What I have found is that appraisers, recently trained, do not know the definition of the word EXPLAIN. I was trained that any adjustment made above the GLA box had to have an explanation and had to be well supported.

Many reports I see just have numbers in the boxes with no explanation. Or, at best "these were the best I could find". Never mind that the GLA is over 25% different or the high sale, on the grid, is $450,000, the low sale sale is $135,000 and inbetween there is a sale for $210,000. Net and gross adjustment of 35% and 65% (the highest I've seen so far was a gross adjustment of 95%!!), with no explanations except these were the best I had. I just shake my head. Please tell me how the sales are comparable. EXPLAIN!! With a good explanation, there would be no need for "provide 2 additional comps that the support the value".

 

[DTB]

I think this is one of the issues which separates those appraisers who care about their clients from those appraisers who don't care about their clients.

Oh my, where to begin.

 

[PropertyEconomics]

I think this is one of the issues which separates those appraisers who care about their clients from those appraisers who don't care about their clients.

And those, Vernon, that think when they are paid $150 for a job they only have to do $150 worth of work, not realizing that in all appraisals, no matter the fee, the report must be credible, not misleading and must comply with all USPAP guidelines for a summary report. I dont know how many times I have heard, well they only wanted to pay $150 bucks ... my answer is always the same ... you still must do a $500 job. It was your business decision to accept the less than full fee for your full appraisal.

 

[Lee Lansford]

Every time I read a post complaining about how a client/UW wants more sales I always wonder about the neighborhood description. If there are a limited number of sales in an area the appraiser should be writing a more comprehensive neighborhood and market conditions section of the report.

Some of the markets I have seen described in this forum I would assume would come with a 2 or 3 page neighborhood and market condition. If that was done the appraiser could then just respond by saying “read the addendum” If there are a limited number of sales give the number of sales and write about EVERY ONE of them. Clearly the reader is not being convinced by the report that the appraiser has fully and completely researched the market.

Strong report (persuasive) writing skills are just as important as good research skills.

Though I "paint with a broad brush", I agree!

More often than not, when I do question a report of an appraisal it is due to the appraiser's unwillingness (inability?) to properly communicate the appraisal.

 

[Tudor]

I agree with the OP, this will deffinately lessen the number of questions asked. Won't stop all of them, because some just never read the report.