Describing neighborhood characteristics

[Smokey Bear]

Damn, YOU ARE GOOD, GEORGE!!!

What she said.

 

[Smokey Bear]

We should not allow our personal dislike for green shag carpeting or dog doo in the backyard to have undue influence on the assignment at hand, which is to value the realty within the context of its market segment.

LOL, it WAS green carpet, but not shag. And the kitchen was painted a bright green. And I think there were tile counters under the shelf paper glued on top of the counters. the shelf paper had a black and white cow pattern. The glued on the shelf paper on the walls as well, between the green cabinets.

He was a nice old guy, with the friendliest pit bull you've ever had the pleasure of petting.

 

[Ultraviolet]

I agree with George. Too bad my USPAP instructor yesterday (who's an investigator for the state board) said the opposite ... :Eyecrazy:

Think I'll print out George's very good advice and keep it in my file of "peer group recommendations"!

 

[George Hatch]

Just so nobody thinks of my 1st paragraph as representing any original thinking, it just follows a format I've been using for a while. A more typical subdivision home would look like this:

"The subject is part of a residential subdivision of about 300 units, built between 1985-1989 and consisting of homes ranging in size between 1687 - 1920 Sqft. Some of these homes have since been enlarged. Due to the rolling topograhpy of the area, about 20% of the homes have varying elevated views overlooking the golf course to the south. Physical conditions levels are generally rated Average in comparison to other residential neighborhoods in the area. The subject is located about 4 blocks west of the nearest elem. school, 10 blocks south of neighborhood shopping, and about 2 miles east of Interstate-5."

That paragraph easily fits the neighborhood section in the old URAR but is too long for the new forms. Bummer.

 

[Artemis Fowl]

Like George's...gonna pilfer some verbiage.​

Here's one of mine...​

Neighborhood Description​

WESTLAND:

Westland is an established community with a mix of residential neighborhoods, shopping and industrial parks. It is about 30
minutes from downtown Detroit. Styles range from two- and three-bedroom ranches, bungalows and tri-levels built during the
1960s and earlier. Newer residences include larger ranches and 1 1/2 - and two-story homes with attached garages.
Population increased 2% from 1990-2000. Unemployment dropped 0.7% Jan 05 thru Feb 06. Wages trend slightly
increasing over the same period. 1,200± residential building permits have been issued since 2000. 50± certificates of
occupancy were issued to businesses in 2005.
Education: Math and reading MEAP scores for the Wayne-Westland Community Schools District run about 4% below state
averages. Competing markets are Garden City Schools (3% below), Inkster-Edison Public Schools (22% below), Livonia
Public Schools (13% above) and Taylor Schools (10% below).
Taxes: $38.77 per $1,000 of a house's taxable value in the Wayne-Westland school district, $38.30 in Garden City, $44.42 in
Inkster, $36.51 in Livonia and $33.92 in Taylor.
SUBJECT:
Subject neighborhood is maintained in average condition with occasional greenbelt and park areas accessible to all
residents. The residences are comprised of one and two story dwellings of average frame construction quality. Homes are
typically compatible in size, style, and effective age. The area is serviced by the Wayne/Westland Public School system.​

Been developing these for different communities over time. MB's don't seem to care but I'm shooting for the good clients. Starting to pay off. ​

 

[DTB]

A person could conclude that they are stuck between a rock and a hard place. On the one hand we have a professional responsibility to disclose the information necessary for our users to make informed decisions; on the other hand we have a professional responsibility to comply with the letter and the spirit of fair lending laws.

Think of it this way: if you were a minority borrower (and sooner or later we're all minorities) and you were turned down for a loan, it would be human nature to be looking through your copy of the appraisal report and whatever other dopcumatation available in the loan file to see if there are any indications of discrimination. What would you think if you saw the following sentence in the appraisal report:

"The subject property is located in a high crime area evidenced by a high incidence of gang related grafitti, bullet holes, chalk outlines and crack houses".

Would not some people conclude that such a description of the personal characteristics of the residents of that neighborhood might have figured into the decision by the lender to deny them credit?

Here's a rule of thumb: if you can quantify the effect on value of a neighborhood attribute there might be a reason to note it in your descriptions. If there's no constructive use for the information then perhaps it doesn't need to be in an appraisal report.

For instance, we can say that high crime rates detract from value, but can we say how much of the loss is attributable to that one factor? How much for the crime rate and how much because of the poor schools or the lack of services or the distance to retail centers or the lack of employment?

Your refinery is a bit different because that is an external influence that can be isolated out through comparisons with other neighborhoods of like composition but which lack their own refinery. Likewise for a freeway or a landing pattern at an airport.

Besides, a lender has access to other sources of information if they want to use criteria such as crime rates and racial makeup and religious orientation in their loan decisions. An appraiser need not contribute to or enable the illegal use of such information by a lender.

I'm not trying to be a bleeding heart, but we do have a responsibility to be dispassionate and emotionally detached when we write these descriptions. We should not allow our personal dislike for green shag carpeting or dog doo in the backyard to have undue influence on the assignment at hand, which is to value the realty within the context of its market segment.

This is the 2nd request: We can nt close on this loan because the UW requires the appraiser to address the following in his report: UW needs explanation of abandoned cars in photos, is this negatively impacting value? Also address any " illegal" uses in the subject's market and their impact on value. Also provide 2 additional comps with bars on window similar to the subject, must be within 2 blocks and 3 months blah,blah,blah...

It just doesn't go away. Does it?

 

[Crunch Hardtack]

The neighborhood might be a crime laden sh**hole filled with human trash, but for the people that live there, the conditions are typical so you call it average and let it go.

 

[Caterina Platt]

George,

You can pull my favorite trick when you're out of space, 'See Page 3' (or 4 depending on the form) and type to your heart's content.

Mine's not quite as eloquent, but here's my explaination of one of our local hoods lovingly known as The War Zone.

NEIGHBORHOOD COMMENTS: Established area with ease in access to shopping, employment, major freeway access ramps, local bus service routes and approximately 2 miles north of main entrance to Kirtland Air Force Base which also houses Sandia National Labs, Department of Energy and other major area employers. The subject immediate location established circa. 1950-1960's time frame contains many of the original structures in various states of repair. The area, since inception has been a mixture of affordable rental units and single family structures. Overall appearance and visual appeal ranging from fair to average, changing from block to block.
MARKET COMMENTS: Activity appears average or better with 2-4 month supply of 2-4 family units in this area. Average DOM at reported at 54 and list to sales ratios at 99%. Financing in majority of sales reported to be obtained through mortgage lending sources or cash equivalent terms. No concessions are reported, however when present are atypical and often require downward adjustment to reflect cash equivalent. Sales data reports 35 sales of 2-4 family units in the past 13 months and 10 offerings currently active.

Now then, Mike:

UW needs explanation of abandoned cars in photos, is this negatively impacting value? Also address any " illegal" uses in the subject's market and their impact on value. Also provide 2 additional comps with bars on window similar to the subject, must be within 2 blocks and 3 months blah,blah,blah...

External depreciation and/or surrounding influence impact on values, if existing, is also affecting the sales comparables which have been chosen from the same location. Security bars have not been noted to add or detract from values in this location, and as shown in the additional photos, the subject's contain the necessary safety releases at the bedroom windows as required by local fire code.

 

[George Hatch]

This is the 2nd request: We can nt close on this loan because the UW requires the appraiser to address the following in his report: UW needs explanation of abandoned cars in photos, is this negatively impacting value? Also address any " illegal" uses in the subject's market and their impact on value. Also provide 2 additional comps with bars on window similar to the subject, must be within 2 blocks and 3 months blah,blah,blah...

Please provide the references to the written guidelines that are of effect on this assignment, as they do not appear in the lender's policies as provided to the Appraiser at the outset of the assignment. Please note that in the report on Page 7 notice is provided that "any additional requests may represent conditions leading to a new assignment and may be subject to additional billing to recover the costs associated with addressing such conditions."


I don't play the moving goalpost game. The reference to the additional billing forestalls requests for "Stupid Appraiser Tricks", as does the request for the written guideline. Ain't never failed me yet.

 

[Brad Ellis]

Cynthia,

Tricky for sure. I sure like George's wording (but then I usually do).

USPAP uses the word "unsupported" under conduct in the Ethics rule- line 250 of the 2006 version.

But, even if you can support everything, please use caution since you can conform to USPAP and probably still have trouble with Fair Lending laws.

Brad