Drive by appraisals

[Lawrence R.]

I have just returned from a short visit to Chancery Court where I spent about 40 minutes on the witness stand testifying about an appraisal I did In December that was - are you ready sitting down - based on an exterior inspection only.


The court seemed to have no problem understanding that if I were allowed access to the home that the assignment results might change.

In this case I was testifying about the Market Rent for the home from 1992 through 2009. So, even if I had been able to inspect the home in 2009, there would have been no way to inspect the home in 1992-2008 (my time machine is at the shop being repaired).

Ahso...good point, how do you inspect something 3 years ago...better yet..how do you inspect something 3 years ago for Fannie Mae?

 

[residentialguy]

Ahso...good point, how do you inspect something 3 years ago...better yet..how do you inspect something 3 years ago for Fannie Mae?

Hmmmmmm............

 

[Mike Garrett RAA]

Lets all start doing something positive...quit calling an exterior only inspection a "drive-by".

Like it our not, exterior only inspections are a part of our industry. Certain assumptions MUST be made if the appraiser did not do an interior inspection. Choices? Decline the assignment, accept the assignment with a defined Scope of Work, and cover your butt!

 

[DWiley]

assumptions MUST be made if the appraiser did not do an interior inspection.

Certain assumptions must be made if the appraiser DID inspect the interior. There is no such thing as a "full" or "complete" inspection. No matter how thoroughly one inspects a property, there is always something else that could have been done. That is why the Fannie Mae form includes that language about conditions that are hidden or unapparent.

It is true that if you do not go inside, then there are things you do not know. But that is also true even if you do go inside. We (almost) never know what might be buried on the site, hidden in the walls, concealed under the attic insulation, etc. We always work with information that is limited to some degree. The key is to disclose what was done and what was not done so the intended users can understand the limitations of the work.

 

[Pittsburgh Pete]

I have just returned from a short visit to Chancery Court where I spent about 40 minutes on the witness stand testifying about an appraisal I did In December that was - are you sitting down - based on an exterior inspection only.


The court seemed to have no problem understanding that if I were allowed access to the home that the assignment results might change.

In this case I was testifying about the Market Rent for the home from 1992 through 2009. So, even if I had been able to inspect the home in 2009, there would have been no way to inspect the home in 1992-2008 (my time machine is at the shop being repaired).

Your clarity and common sense is always refreshing. Thanks.

BTW--my local time machine repair shop has a loaner program, or at least they did once upon a time!

 

[Lawrence R.]

I have just returned from a short visit to Chancery Court where I spent about 40 minutes on the witness stand testifying about an appraisal I did In December that was - are you sitting down - based on an exterior inspection only.


The court seemed to have no problem understanding that if I were allowed access to the home that the assignment results might change.

In this case I was testifying about the Market Rent for the home from 1992 through 2009. So, even if I had been able to inspect the home in 2009, there would have been no way to inspect the home in 1992-2008 (my time machine is at the shop being repaired).

Yes, but were you able to reasonably infer from the condition of the home at the present time--what the likely condition of the home was in years past? I mean, it isn't likely that the quality of the method of construction changed, is it?

I don't think that this is quite an apples to apples comparison to the OP.

 

[Couch Potato]

I have just returned from a short visit to Chancery Court where I spent about 40 minutes on the witness stand testifying about an appraisal I did In December that was - are you sitting down - based on an exterior inspection only.


The court seemed to have no problem understanding that if I were allowed access to the home that the assignment results might change.

In this case I was testifying about the Market Rent for the home from 1992 through 2009. So, even if I had been able to inspect the home in 2009, there would have been no way to inspect the home in 1992-2008 (my time machine is at the shop being repaired).

Feel free to borrow my tardis anytime.

 

[Mister Ed]

For certain clients, under certain conditions, I will perform the exterior only inspection.


My conditions:

• I will not perform them for Fannie or report them on any of Fannie's forms
• There has to be a clear SOW before starting any work (including the understanding of how EA's will be used)
• My fee is my fee
• My turn time is my turn time

My clients are usually local banks/credit unions wanting the reports for either small equity loans or equity lines of credit.

 

[Sunshine in VA]

Fannie Mae and mortgage insurance companies are getting many appraisers to perform exterior only reports on the FNMA 2055 3/05 form. I see one with almost every repurchase or rescission letter they send. The kicker is that AFTER they get the appraiser to do a drive by they then turn around and get the same appraiser to do the field review on the origination appraisal. I think they have the appraiser do the drive by first so they can get an opinion of value, then have the appraiser do the field review and the opinion of value always is the same as the drive by. I see so many poor field reviews done this way.