Drive By Or "windshield" Appraisals

[Mike Garrett RAA]

Was it a circus tent?

 

[Ed]

Thanks for the responses, I appreciate everyones input. However, I'm still struggling with HOW CAN YOU APPRAISE SOMETHING YOU HAVEN'T SEEN......

For Example: If I had a closed box and told you that this box and it's contents was worth $10.00. Would you give me $10.00 without looking in it.

I didn't think so. A "drive by" Appraisal is not an Appraisal. IT'S ORDER TAKING and shame on you. If eveyone would stop doing them and insist on Full Interior/Exterior Appraisals we would all be better in the long run and so would our clients.

 

[Kevin Shannon]

Originally posted by Ed@Oct 16 2003, 02:56 PM
If eveyone would stop doing them and insist on Full Interior/Exterior Appraisals we would all be better in the long run and so would our clients.

I've said it before and I'll say it again, we're our own worst enemy.

It's thinking like this that pushes the industry in the direction of AVM's, Desktop Appraisals and BPO's.

Kevin

 

[Ed]

AMEN - Kevin Thank You for supporting my Post.

 

[Em Tee]

Ed:

You can make an extraordinary assumption in an appraisal (in this case the assumption is that the interior is in at least average condition), state that you've done so, and take it from there. It's not like you can't see ANY of the subject - you view the exterior. As noted in an earlier post, lenders use this when there's a very low LTV, etc.

If the lender is willing to make a loan based on limited information, well, it's their money!

 

[Charlie Williamson]

2055's are usually no problem at all to do in cases where the subject is in a "boxed" so called active area. Plus, these customers are generally cream of the crop and the lender is willing to take this chance. We start with the basic assumption that the property is average condition and find good average comparables. For data source we either use a prior MLS listing, court house records and/or the last appraisal to verify GLA; with a follow-up call to the owner.........etc. Basically you add assumptions were assumptions were made and you clarify where your source of data was taken. Generally speaking the LTV from what l've seen runs between 30 to 60%. Looking at it from the collateral stand point, lenders are in a great position and under writers rarely question your findings. I personally feel like your leaving money on the table for not doing these. In our market we get between $250 to $300 for each one. Send them to me....

 

[Steve Forstner]

Check your software packages. Wintotal has a separate Statement of Limiting Conditions for Drive-by appraisals.

The 2055 allows for interior inspections. You just have to check the appropriate box and it is somewhat shorter to fill out than a URAR. I have one client that orders 2055 walk through appraisals about 70% of the time. It takes a little more narrative to explain everything but not much.

Ed, just curious-- do you only use comparables that you have seen the inside of?

Steve

 

[Ed]

I do not see the inside of every comp I use, I do however call the listing agent(s) on 75% of the comps I use due to decrepencies in Courthouse Information and the MLS, I've even gone out and measured comps from time to time so I know excactly what I'm dealing with, I guess you can say I do my job. We (my mentor and I) go into every Subject without exception. CAN'T SEE IT CAN'T APPRAISE IT. YOU CAN GUESS, BUT NOT APPRAISE.

I'm done beating a dead horse.

 

[Stone]

Ed - a couple of things. If its not about money, what is it about. I like appraisal, but will not do it for free. So, for me it is about the money.

Also, how exactly is it unethical to do a drive-by? I do very few, and don't like doing them because it is hard to get data. However, If the customer wants one, and USPAP says it is ok, then what is the problem. USPAP doesn't even require leaving your office to do an appraisal. You just have to say you never saw the property. I personally wouldn't do that, but it isn't necessarily unethical.

If you aren't comfortable doing these, don't. I am assuming from your post that your mentor really doesn't approve of them. I would also assume from that stance that he/she is likely a very ethical appraiser who has very strict standards. Remember, however, that just because your mentor doesn't approve of something, doesn't necessarily mean it is unethical. There are different views on many subjects, and as long as folks are performing their jobs within the bounds of USPAP, they are not being unethical. Basically, all the clients want in this case is to know if the house is worth x, or more. They couldn't care less what the actual market value is.

 

[Mike Garrett RAA]

You do not need a seperate certification for a 2055....it's already built in! Just be sure to indicate that you did not inspect the interior! The form was designed for this purpose, USPAP has rules covering it, and Fannie Mae accepts it. You are appraising with certain assumptions such as average condition.