Duplex on a 1004?

[bill lewis]

Placing a duplex on a 1004 form I feel would be misleading. The client is probably trying to fit a square peg in a round hole trying to get around the normal requirements for lending on an Income producing property. Duplexes I feel require an income approach to produce credible results.

 

[Pittsburg_22_m]

Some clients only use the 1004 whether its 2-4 or single family. I guess they still aren't ready to move up to the year 2007.

 

[PropertyEconomics]

This must go back to OLD time appraising as I have heard other Old Timers say you can put a two family on the 1004.
Maybe you could in the old stone tablet days but I dont think you can today.
The 1004 is a Single Family Residential form and the Multi Family Form is for 2 - 4 family properties.
I dont think its that difficult to understand and if it is ...

NO you shouldnt do a two unit on a 1004.

 

[Kevin A. Spellman]

Back in 1985-1990, Travelers Mortgage had a two family loan program that allows the reporting of a two-family on a single-family form. If the applicant used the income to qualify then it was a 2-4 family report. If the client seeks only the value and not the income producing of the property, I believe any appraiser can support their conclusion on a single-family report for a 2-4 unit building.

I would under functional utility state two-family in the sales grid. There are blank spaces in the sales grid to identify or separate the property’s amenities. The report is your findings and the conclusions and is not the appraisal. You appraised a two family and reported your facts on a single-family report. If the reader understands the report you have accomplished your assignment.

 

[Vermonter]

Placing a duplex on a 1004 form I feel would be misleading. The client is probably trying to fit a square peg in a round hole trying to get around the normal requirements for lending on an Income producing property. Duplexes I feel require an income approach to produce credible results.

I agree.

Excuses to avoid the most explanatory form for the given assignment is trouble, IMHO.

 

[Carnivore]

There is no professional reason to report appraisals in this way. A respectful client, one worthy of keeping a relationship with would not ask you to do something like this.

Vegan ask in another thread about fee breakdown. This is a good example of why you would Raise the FEE up high enough to discourage such a silly practice.

 

[Kevin A. Spellman]

This is my belief: Fannie Mae, Freddie Mac, FHA, VA have created forms for our industry to communicate to a lender. The form is design for them to make a lending decision, but there are times where a lender only requires credible results if a form they have selected for their decision making process. Whether or not this form satisfies the secondary market requirements is another question.

My education began with he Society of Real Estate Appraisers, Appraisal Institute, Massachusetts Board of Real Estate Appraisers, VA seminars and the MA Department of Revenue. These organizations promote continuing education, competency and ethics. They rarely discuss a lending form-report sponsored by either Fannie or Freddie.

Only an appraiser would question the use of a form and not the user. I do not believe you would be penalized for reporting a single-family report with a multi-family as a subject. If the client requests a specific form-report and you can deliver your service in respect to USPAP and without compromising your credentials, I see no problem.

 

[Lee Lansford]

Communicating the appraisal

An appraisal may be communicated on a cocktail napkin if such is acceptable to the parties involved.

I routinely communicate appraisals of 2-unit residential properties using the "old" 1004/URAR for clients who either hold the loan or for non-lending uses.

 

[Lee Lansford]

Placing a duplex on a 1004 form I feel would be misleading....

Who is "misled" if the client (in this instance, as I understand, the sole Intended User--for use in a loan transaction where the client holds the loan) and appraiser agree on the "form" and the appraiser properly reports and analyzes the property?

 

[PropertyEconomics]

Who is "misled" if the client and appraiser agree on the "form" and the appraiser properly reports and analyzes the property?

Any other potential user of the report that doesnt agree that the "form" should be use who may place reliance upon the value conclusion.
Why not put the appraisal on a 2-4 family form ... it makes no sense to me and then EVERYONE knows.
I will advise my clients that they will have a better time selling the loan, it will be far less misleading, and I would prefer to do so because it addresses things the 1004 doesnt address.

My guess is this is most often requested to limit the fee to that of a typical SFR fee. If so then good luck to you. Im not putting one on a 1004 for form for any reason.