Condo Budget Analysis

[Don Clark]

and I've never been asked to review a budget, so I won't be starting now.

How about the statement under PROJECT ANALYSIS? Seems to me they are asking you to review the budget.

 

[timd354]

How about the statement under PROJECT ANALYSIS? Seems to me they are asking you to review the budget.

Really? Then why does the Fannie Mae form have a check box that the appraiser can check that states that he did not perform any such analysis? Additionally why does the preprinted SOW not specifically state that the appraiser analyzed the budget.

Additionally, why has a lender or Fannie Mae never made an issue with the following disclaimer that I have literally included in hundreds of Fannie Mae appraisal reports for condominium units:

The appraiser was not provided with a copy of the subject Condominium Project's budget nor any reports regarding the budget. Further, it is noted that this type of analysis is beyond the scope of the appraiser's area of expertise. Any such analysis would have to be performed by an expert in that field of study such as a CPA or an expert in property management. It is assumed by the appraiser, for purposes of this report, that the budget is adequate.

It would appear that Fannie Mae and all of the lenders I know do not expect or require any such analysis to be done by the appraiser on the typical appraisal of a residential condominium unit.

 

[Lost Cause]

Competency Rule

The appraiser was not provided with a copy of the subject Condominium Project's budget nor any reports regarding the budget. Further, it is noted that this type of analysis is beyond the scope of the appraiser's area of expertise. Any such analysis would have to be performed by an expert in that field of study such as a CPA or an expert in property management. It is assumed by the appraiser, for purposes of this report, that the budget is adequate.

I was just wondering if any of those claiming this is beyond their expertise were familiar with a little something called the Income Approach? If a real estate appraiser is anything, he/she should be an expert in this type of analysis. Anyone claiming this is beyond their expertise should be refusing such assignments based on lack of competence.

 

[Randolph Kinney]

OK, for starters, how about the benefit of a satisfied client?

All of my clients have been totally satisfied with the statement on the budget after checking NO: UNAVAILABLE. If the client wants to wait for the budget and analysis to be done by some one competent, they can insist on it and pay for it.

 

[DTB]

I was just wondering if any of those claiming this is beyond their expertise were familiar with a little something called the Income Approach? If a real estate appraiser is anything, he/she should be an expert in this type of analysis. Anyone claiming this is beyond their expertise should be refusing such assignments based on lack of competence.

Boy that's a stretch.:mellow:

I'd love to see the accuracy or relevance of your-or my- analysis of a 500 unit high rise development with rooftop pools, indoor pools, 8 elevators, 20,000 square foot fitness center...

Anyone relying on that would be delusional. IMO

 

[jay trotta]

Any of you Residential guys/gals have one of these;
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Re-read the last line again, now for those who feel the need to delve into an "Association's" budget, I would strongley suggest you increase your E&O policy above the $1Mil mark. If you think breaching "private information" is any of Your business, I would suggest you re-think what your doing. Owners and potential Owners have specific rights to that information, it is not "public information", you would need to show; "an intent to purchase", the Association and it's members (I will guarantee one of those Owners is an Attorney or Doctor) will not look upon your intrusion on they're privacy favorably. If the "Lender/Client" is so interested in anyone's budget, they would need permission of the Association Members; in most Orders you recieve a comment is noted in regards to the GLB Act; I would suggest ya'll check with Your E&O carrier before pursuing this issue.

Per my initial paragraph, and those who are doing this "Analysis" are churning these puppies out for; $250 / $350 /$450 ??????

PS: How many of you are "Licensed" in the "Financial Management Field"........just curious

 

[Lost Cause]

Speak For Yourself

Boy that's a stretch.:mellow:

I'd love to see the accuracy or relevance of your-or my- analysis of a 500 unit high rise development with rooftop pools, indoor pools, 8 elevators, 20,000 square foot fitness center...

Anyone relying on that would be delusional. IMO

Well, if you say so, yours might not be reliable. But that is everyday, ordinary kind of stuff and mine would be dead-on reliable. I find it remarkable that there is a concurrent thread where an appraiser is claiming he can value the undivided common interest in a condo (by itself) and in this thread appraisers are claiming that an income and expense statement is beyond their expertise. No wonder this profession is in a mess!

 

[DTB]

Well, if you say so, yours might not be reliable. But that is everyday, ordinary kind of stuff and mine would be dead-on reliable. I find it remarkable that there is a concurrent thread where an appraiser is claiming he can value the undivided common interest in a condo (by itself) and in this thread appraisers are claiming that an income and expense statement is beyond their expertise. No wonder this profession is in a mess!

Please do share, as I am certainly not qualified nor purport to be on this matter.

I'd love to see the depth, detail and accuracy of yours, since it's rather mundane for you.

And please include how you confirm the veracity of your "dead on reliable" analysis. I'm all eyes. :Eyecrazy:

 

[Randolph Kinney]

Well, if you say so, yours might not be reliable. But that is everyday, ordinary kind of stuff and mine would be dead-on reliable. I find it remarkable that there is a concurrent thread where an appraiser is claiming he can value the undivided common interest in a condo (by itself) and in this thread appraisers are claiming that an income and expense statement is beyond their expertise. No wonder this profession is in a mess!

You need to be sued a few times if all you are doing to analyze a condo budget is looking at income and expenses.

 

[Joyce Potts]

You have to love some of you guys. A certified residential appraiser just recently had the educational requirements raised (at least in Florida) to a two-year college degree. There are thousands of Certified Appraisers here in Florida with only a high school education and many with only two years of experience before they were able to sit for the certified test.

A typical single condo appraisal in this market ranges from $300 - $350, yet many are suggesting that it's the responsibility, fiduciary and duty of the residential appraiser to render an opinion on a condo project budget that may involve hundreds of thousands of dollars.

Why not raise the educational and experience requirements and make appraisers truly qualified to render their Good Housekeeping Seal of Approval not only on a thorough and realistic analysis of a condo project budget, but based on the millions of dollars of federally related loan transactions that are being made based on their professional valution opinions.

Oh, and pay them a decent fee commensurate with their education, experience and incurred liability.

I wonder if automated valuation models for condo budgets are in the pipelines too.