Ter,
Now if you can cite something from Fannie that is more recent than 10 years ago, I'll happily consider it. But, frankly, I continue to blister about Fannie being any sort of definitive answer for appraisers. We know how to appraise much better than they do. Fannie Mae is interested in one thing only- maximizing their profits and doing whatever they must to achieve that. It's the reason that they developed desktop underwriter.
That same guide, by the way, would take issue with your post on reporting comparisons- it said that calling a home in average condition means that it is similar in condition to the market norm in the area. I happen to agree with it, but have had to explain this to any number of owners when I said the home was in average condition for its area when it is only 6 months old. Well, since the other homes in the complex are 6 months old, it IS in average condition for that market.
As to your software, I would tell you this. I looked at 2 reports in the last week that had unbelievable adjustments. The first was a +300 adjustment to a comp that was 17 feet smaller than the subject- 4000 +/- sized homes. The second made an adjustment for 7 feet vs. a 3900 SF subject. Both value opinions were otherwise well supported. It started to get to me, so I called the first appraiser.
He explained that his SOFTWARE was set to adjust for ANY difference in size at a prescribed amount per SF. But this was clearly not a supportable adjustment- and he agreed and said he was changing his default settings that day. So, just because the software allows it does not make it right.
That said, there is NOTHING wrong with using effective age instead of actual if you have 2 things: 1) you do not "double dip", and 2) you KNOW the effective age of the comps. I would suggest that if you do this, you first explain that you are adjusting for condition and age in combination and that you tell your reader just how you know the effective age of the comps.
I have, in the past, used 3 comps that were all from my files. I saw them all on the inside, derived their effective ages from the market, so I knew what the actual facts were. However, you find that most appraisers are simply guessing at the effective ages of the comps and have not seen them.
Brad Ellis, IFA, RAA
Now if you can cite something from Fannie that is more recent than 10 years ago, I'll happily consider it. But, frankly, I continue to blister about Fannie being any sort of definitive answer for appraisers. We know how to appraise much better than they do. Fannie Mae is interested in one thing only- maximizing their profits and doing whatever they must to achieve that. It's the reason that they developed desktop underwriter.
That same guide, by the way, would take issue with your post on reporting comparisons- it said that calling a home in average condition means that it is similar in condition to the market norm in the area. I happen to agree with it, but have had to explain this to any number of owners when I said the home was in average condition for its area when it is only 6 months old. Well, since the other homes in the complex are 6 months old, it IS in average condition for that market.
As to your software, I would tell you this. I looked at 2 reports in the last week that had unbelievable adjustments. The first was a +300 adjustment to a comp that was 17 feet smaller than the subject- 4000 +/- sized homes. The second made an adjustment for 7 feet vs. a 3900 SF subject. Both value opinions were otherwise well supported. It started to get to me, so I called the first appraiser.
He explained that his SOFTWARE was set to adjust for ANY difference in size at a prescribed amount per SF. But this was clearly not a supportable adjustment- and he agreed and said he was changing his default settings that day. So, just because the software allows it does not make it right.
That said, there is NOTHING wrong with using effective age instead of actual if you have 2 things: 1) you do not "double dip", and 2) you KNOW the effective age of the comps. I would suggest that if you do this, you first explain that you are adjusting for condition and age in combination and that you tell your reader just how you know the effective age of the comps.
I have, in the past, used 3 comps that were all from my files. I saw them all on the inside, derived their effective ages from the market, so I knew what the actual facts were. However, you find that most appraisers are simply guessing at the effective ages of the comps and have not seen them.
Brad Ellis, IFA, RAA
