Exterior Only Appraisal - Assuming Condition is Avg, Assuming Interior Same as Exterior

[DWiley]

How many appraisers after inspecting the property, gathering their comparables, completing the information on page 1, and then after an hour of research come to the conclusion that the 'information is not adequate' to draw a peer standard conclusion they cannot opine with GSE certainty on the interior condition? Does the appraiser get $75 for a cancelation?

Given that the requirement to have a data source has existed for 15 years now, why in the world would an appraiser do all the steps that you describe before he/she determined whether adequate information about condition was available?

 

[Lee Lansford]

Appraisers (many, that is) don't need enemies. They have themselves.

 

[Elliott]

DW said, So, every time I got an order for a GSE exterior only assignment, checking for condition information was the first thing I would do before tackling all those other things you mention.

How many assignments did you turn down when you got exterior assignments?

Also, is this a 1004 Exterior standard, or a standard for the 2055 too? Is it all GSEs?

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Got this email this morning from an AMC:

"Good morning, the following message was sent to us this morning from Danny Wiley at Freddie Mac.

All,
Some appraisers are struggling with understanding how to properly complete exterior only appraisals for GSE work. I have posted the following on social media, but anything you can do to help support/spread the message would be appreciated.
As we are examining the appraisal reports that are being submitted under the COVID-19 flexibilities, the number one issue we are seeing is related to exterior only appraisals and the analysis/reporting of the interior condition.

For GSE work, it is NOT acceptable to simply assume that the interior condition is “average.” Nor is it acceptable to assume that the interior condition is similar to the exterior condition. Many non-GSE users do allow (and even instruct that) appraisals completed with such assumptions, but these assumptions are not acceptable for GSE work.
The appraiser MUST have a data source for the interior condition. The data sources could include any of the types of sources normally used for comparables. Or, under the revised COVID-19 certs, the data could include information provided by the owner, occupant, agent, etc.

If one cannot obtain a data source for the interior condition, then the appraisal should not be completed. However, the intent of adopting the revised certifications and allowing use of data by the property owner was to minimize the number of cases where the appraiser could not obtain such data.
Thanks!"

 

[DWiley]

How many assignments did you turn down when you got exterior assignments?

I do not know an exact count, but a lot. As I said, the requirement for a data source has been a requirement since 2005, and I was certainly in the field during that time. And, as I said, for non-GSE work, different rules might apply.

Got this email this morning from an AMC:

I am glad you got that message. We reached out to many different entities to help spread the message on this topic to appraisers and lenders.

 

[Fernando]

Off with their heads!

What's the solution? Have them walk around the house, rise up on your tippy toes and peak in the windows?

That's what I do. I let owner know I'm coming and I would peek through the windows.

 

[Overimprovement]

Too bad the message is not getting through very well to AMC's. Had one pitch a fit over me stating I needed to obtain interior pics from homeowner because no recent MLS entries were available. Another one wanted to change the SOW to add the flexibilities 3 weeks after report was turned in, even stating they made a mistake not using them from the get go. Can't just willy nilly change scope of work so I advised I would want a small fee for this change since this was now a new assignment in my mind. Oh, they had a cow. Talked to chief appraiser, yadda yadda. They finally relented but it disgusted me that I had to go through that. For their mistake.

 

[DWiley]

Too bad the message is not getting through very well to AMC's....

Understood. The outreach on this topic includes AMCs as well. Trying to get everyone on the same page.

As I said in another thread, the GSEs have not been using the 2055 for origination work, so it is understandable that some degree of "refresher" might be needed.

 

[Overimprovement]

Understood. The outreach on this topic includes AMCs as well. Trying to get everyone on the same page.

As I said in another thread, the GSEs have not been using the 2055 for origination work, so it is understandable that some degree of "refresher" might be needed.

I have no doubt the message is getting TO them, just not THROUGH to them. Though I think this was a lender faux pas mostly (large regional player at that).
Appreciate the efforts in getting all aligned though so we can keep everything rolling!

 

[ucbruin]

What’s an extraordinary assumption within an FNMA 2055 appraisal?
With an FNMA 2055 appraisal, many factors within the report will be treated as extraordinary assumptions. As a reminder, an extraordinary assumption is when an appraiser takes uncertain information as of the appraisal effective date and presumes it is fact. For example, if the exterior of a property is considered good, the appraiser typically will make an extraordinary assumption that the interior is in similar condition.

https://mountainseed.com/2018/03/20/FNMA-2055-appraisal/

Prior to appraisers being allowed access to MLS....
This was the case....

Originally the 2055 was used for both exterior only and exterior/interior appraisals....

 

[ucbruin]

I do not know, as that depends on business arrangements between an appraiser and a client.

What I do know is that the requirement to have a data source for interior condition is not new. It has been a GSE requirement since 2005, and it is printed right on the form:

So, every time I got an order for a GSE exterior only assignment, checking for condition information was the first thing I would do before tackling all those other things you mention.


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As everything else about appraising....
"Adequate/credible/supportable/etc. is in the eye of the beholder....
Not set in stone....