Client wants more information

[Mister Ed]

It sure saves a lot of headaches in the end if you explain it at the beginning. I see far too many appraisals with boilerplate neighborhood descriptions that could be pretty much anywhere in the country and do not lead the reader to any comfort level of that particular neighborhood. I do not think it is the fault of the reader as much as the writer. Remember, appraisers are technical communicators too.

Enumeration is not an excuse for a **** poor job, period.

Serena,

Thanks for saying that... even though it has been said over and again in various posts on this forum. When I worked in the Jacksonville, FL market, I actually took a basic boilerplate comment on market and neighborhood descriptions with some "fill-in-the-blank" points that forced me to say something about the actual neighborhood and sub-market I was dealing with. I rarely got questions back related to that kind of factor.

Now that I work in rural/small town "Middle Georgia," I have found that most of the time I have to describe what is going on in whole counties (I do work in 9 counties). I have my "fill-in-the-blank boilerplate" for each county. Now, rather than maybe a paragraph or two, it takes much more space to describe what is happening for some counties. In these counties, all kinds of demographics/population, etc. are factors. Where does the majority of the population find its employment? Does this county have adequate employment opportunities for the residents or do they have to go to other counties? Even factors like "how far to the nearest grocery store?" have to be considered in some counties.

My reports got longer after I moved here, but I love the challenge and how it makes me have to think whether I feel like thinking or not.

-ed-

 

[Mike Boyd]

When you read ANYTHING, be it an appraisal report or The Wall Street Journal, you are interpreting the written word and applying that interpretation to the analysis of the report or article. I DID NOT mean things are left out and open to the imagination.

 

[Dennis J. Black ASA IFAS]

I have found the answers to be enlightening.

 

[Mister Ed]

I have found the answers to be enlightening.

Dennis,

How do you mean? Enlightening how?

-ed-

 

[PropertyEconomics]

The question I have is why wouldnt you want to take the time (30 minutes at most) to explain your adjustments, explain your market, explain why some comparable sales were not used, which comparables you placed most weight on and why ... simply explain your report in an addenda, as opposed to getting stips you have to answer later which take much more time and lose you much more money.
I just have never understood not getting into the habit of solving the problem before it occurrs. Seems to me that is the prudent way to conduct your business.

 

[Michigander]

The question I have is why wouldnt you want to take the time (30 minutes at most) to explain your adjustments, explain your market, explain why some comparable sales were not used, which comparables you placed most weight on and why ... simply explain your report in an addenda, as opposed to getting stips you have to answer later which take much more time and lose you much more money.
I just have never understood not getting into the habit of solving the problem before it occurrs. Seems to me that is the prudent way to conduct your business.

PRECISELY!

This is what I just don't understand. It is so much simpler answering the question before it is raised than after. If questions are raised, then I figure I didn't do my job sufficiently.

This goes directly to getting it done right the first time. We ***** about it constantly, but how many actually step up to the plate and do it? Time to look at that finger we are pointing and see the four pointing back square in our collective faces.

 

[Terrel L. Shields]

the bank the people who look at it two years later after the market has changed or our fellow appraisers who seem to think if an appraiser is having any problems its his fault and no one can help because there is blood in the water.

Forensic analysis by definition is fault finding. Its shooting the wounded after the battle. The same bankers who were mute 2 years ago are crying foul now....claiming to be victims, not victimizers.

you are interpreting the written word and applying that interpretation to the analysis of the report or article. I DID NOT mean things are left out

agree completely. I have a copy of a report prepared by a USPAP instructor that starts out about how Arkansas was discovered by Hernando DeSoto (disregard the surprise of the native tribes already here)...The historical impact upon market value is lost on me.
In my statement about using sales over 6 mo. due to a paucity of sales, which Dennis deems inadequate, it does summarize WHY older sales were used. Any additional puffery illuminates the situation how? Totally meaningless to WHY those sales were used.

Additional comp requests are simply punishment to appraisers who "create problems" with the UW by having the misfortune of appraising a non-perfect house in a non-perfect market. As Austin has pointed out frequently, Fannie rules and forms for appraising residential properties is a structured format which inhibits the appraisal of the property and replaces it with a one-size-fits-all paradigm.

Likewise, the statement that the new forms invites more comments flies directly in the face of statements by Fannie mae themselves who argue that a minimum of addenda, particularly commentary, should be required. They impassionately argue against adding to the paragraph SOW found in the form, as an example.

And that 500# gorilla in the room that is being ignored is SOW. SOW requires such wordsmithing that perhaps instead of a degree in Real Estate or Business, the appraiser should be required a Masters in communication over an English degree. Careful phraseology is not easy to achieve. But even if it were, then precision language is not necessarily the key to appraisal. Analysis of the data available and presented in a poor format is likely more accurate than the precision detailed report which is fabricated from whole cloth. Sadly, the "pretty" report will trump the "correct" value everytime.....

 

[CANative]

This just came in from Land America.

v Washington Mutual v
Requirements bulletin
Dear Approved LandAmerica Appraiser,
LandAmerica is working with Washington Mutual, for which you may have received or may be
receiving an appraisal request. In order to continue to provide the best possible service to our
client, we have further communications in regards to client requirements.
Please review the points below in reference to the subject neighborhood market conditions.

For all reports significant detail is necessary related to the subject neighborhood’s
market conditions, especially when negative factors such as declining values,
oversupply, extended marketing times, and/or foreclosures are noted in the subject
neighborhood.

In the case of declining values, the report must indicate the rate of decline, the data
source for this information, the cause of the declining values, as well as how this has
been considered in the approach to value and the effect on marketability.
In the case of oversupply and/or extended marketing times, comments are
necessary related to what was noted, and the effect on marketability and/or value.

With increasing numbers of foreclosures being noted in markets around the
country, comments about foreclosures, even if just to confirm there are none, should
be noted on all reports. When applicable, the rate of foreclosure should be
indicated, along with specific comments indicating how this affects the subject’s
marketability.

LandAmerica recognizes the importance of our appraisal partners in achieving the highest level of
success for our organization. We want to thank you for your continued focus on professionalism
and quality. We look forward to continuing a mutually beneficial relationship with your firm.

 

[SANDY]

You can write all the fancy anaysis you want but if there is nobody on the other end that will read it let alone know what it means-your done. doh--I'll just look at my checklist for what a perfect looking appraisal should be and ask for more comps.

 

[Richard Carlsen]

There's plenty of room in the 1004 form to describe the neighborhood and the market sufficiently. Get concise. Say it like this:

Currently 12 listings in the defined neighborhood in the $100K to $175K price range with 4 sales in the last 12 months averaging 175 DOM. 5 properties have expired or withdrawn. Market is considered to be in an over-supply condition.

That tells the basics and certainly does not take up lots of room. This year I have yet to have a write-up flip to the addendum. It sometimes takes writing and re-writing but it's possible. Plus work on not saying things that the UW doesn't want or need to hear and tell him what he wants to know.