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Considering filing complaint for lack of market conditions adjustment on stale comps

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And as the article from the Appraisal Journal details, the 1004MC is a flawed model. So you will get poor results no matter how well you fill it out.

the day they ended the requirement for that meaningless form, my clients cheered. along with me. hip hip hooray.
 
"The reason for abandoning Form 1004MC, according to the GSE, is that its “Collateral Underwriter (CU) now provides robust market trend information for lenders and Fannie Mae, enabling measurement and management of market risks in a more rigorous way.”


and of course the independent appraiser has no access to CU. more togetherness :rof: :rof: :rof:
 
We do not do prospective-Values on lender work -That's Consulting work which may be done for investors or developers but not an-appraisal.
I agree. My comment was made in regards to Purchasers and the different elements/aspects they consider during the offering stage of a purchase. I apologize for not being clearer. My remark was made in response to Fernando's comments;

Fernando said ; "That's interesting but I believe if people can't afford to put up the extra amount they're paying over "market value" then they shouldn't be stretching it.
These buyers are the ones who pulled the market down during the Great Recession."

back to the Topic

Don't forget we have very few details about this specific Subject., the topic of the thread. The OP is a very savvy person and is very well-read. The OP said in his opinion the Comparable used in the report was a good choice.
 
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Sorry, these were bad assumptions about the specific numbers. Prior posts from others had me assuming information I should have not.

The point remains. You secured a loan based on your lender’s collateral risk assessment. After you agreed to their terms you’re seeking to punish the two appraisers that you disagreed with. If the appraisal came in at your contract price with an MC adjustment that you found lacks credibility, IMO you aren’t here.


State investigations are a big deal. Some states have shown a willingness to abuse their authority. If I made bad assumptions about your motivations, I apologize. Seems to me consumer protection is an easy cop out.

There are some top notch appraisers here, but nobody is bulletproof. I could tear into any one of their reports and find a flaw, maybe some inexplicable language or residue from a prior report, a poorly supported adjustment and/or one I could contradict, etc.... and so too they with one of mine.

Because of this I maintain the threshold for involving state regulators requires an attempt to mislead and/or a pattern of negligence. But a single adjustment? And honestly, if your not an intended user you don’t even basis for complaint IMO.
Like I said before, I don't blame you, you have every right to be skeptical. All I ask is not jumping to conclusions about me or my situation without basis.

In regards to whether I'd be as skeptical of an appraisal that comes in too high, you're right I likely wouldn't scrutinize it as closely and likely wouldn't find it lacking in credibility. I would bet the house that the lender would put that appraisal under the microscope though. It seems the me that skepticism is asymmetrical in that regard. Low numbers are less risky for lenders, but can make buyers skeptical. High numbers make buyers happy, but could set off alarm bells for lenders. At the end of the day, as you all have kindly reminded me, there's only one intended user holding all the power to question credibility and push for adjustment support anyway (besides the state).

And while yes it is a single adjustment, it would be by far the most impactful (current total net adjustments are ~2% max). Accordingly, I would assume it'd be given the commensurate level of care/analysis/support, but I can't honestly say that appears to be the case. I understand everyone is human (even appraisers!) and have made mistakes here and there that people could nitpick to death. I just have a hard time with equating using a rule of thumb GLA adjustment with a 0% market conditions adjustment for 8-10 month old comp prices.

While I'm still undecided with what I'll do moving forward, I appreciate you sharing your threshold for involving the state and will definitely take that into consideration.
 
The problem in lot of areas is a lack of recent sales. I've never seen inventory this low. I'm working on one now with contract dates of 11/20, 9/20 and 6/20. I'm making across the board market adjustments based on two pending sales. I'm also coming in $5000 (+3%) over the highest closed sale, but it's bracketed by the pending's (one of which has since closed).
A lot of appraiser's push back on that. They think the value HAS to be based solely on closed sales. But that ignores how the market really works. We just sold our house and when we priced it we were looking at the current competition, not what sold x months ago.
I think your appraiser just didn't know how to articulate what he was seeing, so he just ignored it.
That's definitely possible given the dearth of communication in general. And perhaps the "solely based on closed sales" approach does seem to be how my appraiser arrived at their conclusion. I guess I'm confused as to why these kinds of rules are applied so rigidly, especially if it's not reflective of how the market works when you're trying to opine on market value.
 
To get back to the Original Post. I think the person has a valid point. We don't don't know his Market .... It does not matter.

To file a complaint with the State Board will not change the results of the Original Appraisal. It may only at best validate the buyer's disagreement. The only course of action the OP probably could have taken is to Retain another Appraiser. The Lender will not use that report. We all know that. What I found most interesting is the OP ponied up the extra cash instead of walking. In the Charlotte MSA, we were seeing over the past year SP/LP Ratios in excess of 100%. Now finally those Ratios are just below 100%.

What does that mean? Fewer buyers, more sellers or supply via new Construction is catching up or a combination.
Thank you for weighing in Carnivore
 
Hey, if the OP decides to turn the appraiser into the board, this thread would be great to use as a defense LOL. See appraisal board, 260 posts and my peers are all over the place on this issue. Bunch of crazies. Cannot agree on anything.
Printing now lol
 
I agree. My comment was made in regards to Purchasers and the different elements/aspects they consider during the offering stage of a purchase. I apologize for not being clearer. My remark was made in response to Fernando's comments;

Fernando said ; "That's interesting but I believe if people can't afford to put up the extra amount they're paying over "market value" then they shouldn't be stretching it.
These buyers are the ones who pulled the market down during the Great Recession."

back to the Topic

Don't forget we have very few details about this specific Subject., the topic of the thread. The OP is a very savvy person and is very well-read. The OP said in his opinion the Comparable used in the report was a good choice.
Comps were a good starting point IMO due to their neighborhood / condition / product / model / bed / bath / GLA matches. However, to use your perfect comp definition, I'd argue the stale comps are not an accurate reflection of the subject's economic characteristics due to the sales timing differences. In that sense, I misspoke in calling the non-market conditions adjusted comps "good".
 
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