Do you Have A Threshold % For Answering No To Question 10?

[Metamorphic]

I'd ask my supervisor this but he's on vacation and I dont call people on vacation unless serious blood loss is occurring.

I'm doing the preliminary work on a Field Review we'll be doing when he gets back next week. I've crunched the numbers and the opinion I come up with is about 4% less than what the OA came up with. Based on what he's documented in his report regarding his adjustments I'm forced to conclude he's either a blind squirrel, or he's got enough experience to know the right number but is too lazy to document his work. He also makes some fishy adjustments that strike me wrong (sub has 4 car garage, 3 comps have 3 car garages, 2 of those get a $1k adjustment, the other gets $3k; sub is a craftsman, but he dings a craftsman comp $50k for, and boosts a conventional style $30k) Just not a lot of rhyme or reason to the adjustments and NO discussion of the basis for the adjustments. The range of adjusted values is almost $500k (almost 1/3 of the appraised value). FWIW he picked the same comps I would have except for 1.

How he picked a value out of that mess I cant figure. But he managed to get 4% off my number. If you wanted to sit down and haggle over the adjustments I'd guess we could probably get to a 2% difference. After all, this is a top of the market home with few comparable and lots of big adjustments to bring the comparables that do exist into line with the Sub. I'm looking at gross adjustments in the 20-30% range so I wouldent have to be very far off on my adjustments to absorb a big chunk of that 4%. spread, but I dont think you'd be able to get me all the way to the original appraisers number.

So what would YOU do at that point.

a) Say "Yes" to question 10 figuring 2-4% is close enough, sign and send.
b) Say "yes" but point out all the problems with his adjustments, methods, an documentation, then sign an send.
c) Say "no" and do the full review.

Is there some sort of official unofficial threshold where appraisers agree they're close enough together to call it the same opinion?

 

[Mike Kennedy]

http://commerce.appraisalfoundation.org/html/USPAP2008/USPAP_folder/standards/Standards_Rule_3_1.htm


d, e, f, & g


it's not JUST the $$$.........

 

[Fred]

Just not a lot of rhyme or reason to the adjustments and NO discussion of the basis for the adjustments.

And that makes the appraisal stand out?

4% off... Is there some sort of official unofficial threshold where appraisers agree

That's my question. I can't imagine using a term like "agree." I understand 4%. Is that significant?

Let me ask you this, suppose you "agreed" with his adjustments, but he ended up 6% different than you. Would you still say you "disagreed?" What if he made no line adjustments and just picked from within the range, and came up with the same number as you, would you "agree" then?

 

[Metamorphic]

Is "develop an opinion" an euphemism for "report an opinion"?

They way the 1032 is set up you dont get a chance to discuss your opinion on d,e,f,g and the adjustments unless you disagree and go on to Section II.

 

[Metamorphic]

And that makes the appraisal stand out?

That's my question. I can't imagine using a term like "agree." I understand 4%. Is that significant?

Let me ask you this, suppose you "agreed" with his adjustments, but he ended up 6% different than you. Would you still say you "disagreed?" What if he made no line adjustments and just picked from within the range, and came up with the same number as you, would you "agree" then?

If I agreed with his adjustments then his number would be my number. Since I don't agree with his adjustments I have to do my own adjusting to figure out what my number is, and the odds of me coming out with EXACTLY the same opinion as the other guy is very low. Q 10 wants to know if the opinion is "accurate" but it doesn't say at what level. Accurate to the dollar, to the nearest $1k, to the nearset 1%,... 10%.

 

[hastalavista]

This is why I don't do reviews on the GSE review forms. :new_smile-l:


I think you ask a very good question that is inherently muddled because of the report form.
The bottom line is credibility of the value and the review appraiser must determine if it is or isn't credible (or state why he or she cannot). There is a value range that you are probably confident about. If the original report's value is outside of that range, then (in your- or any other reviewers' opinion) the value is not credible based on your best analysis.

And that's what I think most clients are looking for- is the value credible based on the reviewer's best analysis?

A value-point can be credible but the rationale used to arrive at it isn't (maybe because no rationale is provided in the written report?). These are the types of reviews I really don't like- I'm forced to provide my own detailed analysis- not because I disagree with the original value, but because I need to provide my client with what the original report failed to do- a credible rationale for arriving at the value.

When I review, more times than not I'd conclude a different point-value, but the original value is within a reasonable range. If the original report's point value is at the high-end, I may state something like-
The original report's value is at the high-end of the reasonable value range based on my analysis.
I don't know if you can do that or not... but I can. And, in this environment, sometimes that does make a difference in the lender's decision-making process. Thats what the review is (or should be) all about- providing the client with meaningful information it can use to make a sound lending decision.

Good luck.

 

[Fred]

If I agreed with his adjustments then his number would be my number. Since I don't agree with his adjustments I have to do my own adjusting to figure out what my number is, and the odds of me coming out with EXACTLY the same opinion as the other guy is very low. Q 10 wants to know if the opinion is "accurate" but it doesn't say at what level. Accurate to the dollar, to the nearest $1k, to the nearset 1%,... 10%.

I think you were on to something before when you said something about making up definitiions. "Accurate" is more manageable then "agree." I just don't know how to "agree" with an estimate. It can be reasonable, accurate, reliable, in complianc with generally accepted standards, etc.

 

[Metamorphic]

The bottom line is credibility of the value and the review appraiser must determine if it is or isn't credible (or state why he or she cannot). There is a value range that you are probably confident about. If the original report's value is outside of that range, then (in your- or any other reviewers' opinion) the value is not credible based on your best analysis.

Excellent point. The form really should be asking the reviewer for a range of values. Basically allow the reviewer to say "I can see this property being reasonably appraised as high as x or as low as y based on the available range of competently chosen comparables and margin of error in market based adjustments, and reconciliation of the the appropriately used methods of valuation."

I'm forced to provide my own detailed analysis- not because I disagree with the original value, but because I need to provide my client with what the original report failed to do- a credible rationale for arriving at the value.

When you do this are you providing detailed analysis of the method YOU used to arrive at value, or your best guess at the analysis the primary appraiser used but didnt report?




The original report's value is at the high-end of the reasonable value range based on my analysis.

That's good stuff. I think I'll go with that.

 

[hastalavista]

When you do this are you providing detailed analysis of the method YOU used to arrive at value, or your best guess at the analysis the primary appraiser used but didnt report?

My analysis since the value I'm providing is the result of my appraisal development process.

 

[Carnivore]

My analysis since the value I'm providing is the result of my appraisal development process.

There ya go, this is the answer because almost all lender so-called "review" assignments are indeed two assignments within one; review and an appraisal.

The problem only exist because the lending community is so hung up on point value as opposed to a range of value. Many appraisers are hung up on it also.