Exterior-Only Inspections

[Mark K]

The argument for the use of an interior inspection typically comes from the lending institution in cases where there is a low loan to value ratio, a precise estimated value is not needed, and a desire to save the borrower some money in loan related fees.

The conditions of the loan typically are not relevant to an appraiser, and they should not be.

While the conditions of the loan are not relevant to the appraiser, they can be relevant to the lending institution. If the bank is making a relatively low LTV loan, they might feel comfortable with an exterior-only appraisal. Also, as mentioned, sometimes the bank doesn't want the owner to know; quality control, pre-foreclosure, check on equity for late paying borrowers, etc.

It's possible that the bank's auditors are pushing them towards having some type of appraisal report in their files and the exterior-only is preferable to the tax card.

I continue to perform a few exterior-only reports for a few clients. The reports are completed on the old 2055 form with a limited scope or work, several disclaimers as to condition, unseen improvements, possible inaccuracy of public records, etc. and the bank is content with these for certain loans.

I wouldn't rule these reports out completely. I do enough of them to pay for gas money and charge about half of an interior fee. No sketch, no comp photos, no location maps, no F/F guidelines.

 

[hastalavista]

With the now widely available multi-purpose aka general purpose aka non-lender 3/05 style 2055 forms with all the "problem verbiage" removed, their is no longer any "EA" issue...

I do plenty of such work, loaded with lot's of juicy EA's disclaiming what I was able to see and/or not see as well as enumerate on what info I had and where I got it and point out the effect upon value IF the information available was over or under stated.

I haven't had a single client refuse to accept same since I began offering them.

I agree with this advice in general. I'm not familiar with all the "non-lender" pre-printed forms- I would not use a form that said "not for lending purposes" and then use it for lending purposes. That's me (and, it can be clarified in the body of the report, so doing so violates nothing, IMO. It is just a personal choice).

We do drive-bys for a number of reasons. We generally use the old 2055; like some others have mentioned, I've never had a problem talking to a client, explaining to them what the difference is, and having them agree to use the 2055 with my own SOW included to satisfy their intended use.

The Fannie/Freddie form is intended for collateral valuation of a property where a 1st lien position is going to be purchased by them. Your client is has a very different purpose/intended use so there is no need to use the Fannie/Freddie revised forms.

Good luck.

 

[KenRossman]

The form I use - the SFREP (Residential Appraiser aka Appraise-it) "multi-purpose" version of the 3/05 2055 does not state or imply "non-lender" anywhere on it - see attached. I applaud SFREP for making such a useful tool available.

I think the multi-purpose 3/05 2055 is far superior to the old 2055 in many respects.

 

[hastalavista]

The form I use - the SFREP (Residential Appraiser aka Appraise-it) "multi-purpose" version of the 3/05 2055 does not state or imply "non-lender" anywhere on it - see attached. I applaud SFREP for making such a useful tool available.

I think the multi-purpose 3/05 2055 is far superior to the old 2055 in many respects.

Ken-

I'm glad to see it doesn't restrict the type of client (as I said, I am not familiar with all non-fannie forms).

 

[PropertyEconomics]

HELOCs are being done all over the country on restricted reports. Typically these are low loan to values and an appraisal is not needed. For that matter no loan under $250,000 requires an appraisal. Why not develop a desktop restricted report that will provide them with the service they need implementing the extraordinary assumptions you must make.
Looks like a new source of business to me.

 

[Mr Rex]

HELOCs are being done all over the country on restricted reports. Typically these are low loan to values and an appraisal is not needed. For that matter no loan under $250,000 requires an appraisal. Why not develop a desktop restricted report that will provide them with the service they need implementing the extraordinary assumptions you must make.
Looks like a new source of business to me.

Alert the USPAP police, someone has stolen PEs password and identity. Posting about an appraisal without an interior inspection. I don't know who you are, but you let PE go now.

 

[hastalavista]

Alert the USPAP police, someone has stolen PEs password and identity. Posting about an appraisal without an interior inspection. I don't know who you are, but you let PE go now.

M-

There's hope yet! (just kidding, PE)

 

[PropertyEconomics]

Alert the USPAP police, someone has stolen PEs password and identity. Posting about an appraisal without an interior inspection. I don't know who you are, but you let PE go now.

Hell Rex they are happening ... my new stance is they need to be done by competent appraisers who desire to do them right. HELOCs are quite a different story than a refinance. They are typically held in house and are often for lower amounts of money. May as well has the good guys do them rather than the peanut butter boys.

 

[Webbed Feet]

HELOCs are being done all over the country on restricted reports. Typically these are low loan to values and an appraisal is not needed. For that matter no loan under $250,000 requires an appraisal. Why not develop a desktop restricted report that will provide them with the service they need implementing the extraordinary assumptions you must make.
Looks like a new source of business to me.

P.E.

Explain why you think the report should be "Restricted."

Webbed.

 

[PropertyEconomics]

P.E.

Explain why you think the report should be "Restricted."

Webbed.

Webbed .. im not giving a summary report for that kind of fee. Pencil it out on yellow paper, put the data into a small restricted report, sign a certification, cover yourself in the file for USAP and thats that.