Extraction Method

[alebrewer]

And I've heard directly from those who make these decisions state their reason is for understanding or confirming there is enough REL in their prospective asset. Not to mention testing the reasonableness of the SA and/or IA conclusion.

I know that FHA requires an estimate of REL (stated directly by the appraiser, not extracted from the CA by the underwriter), but I've not heard of that being a requirement for conforming? In fact, would have to look up the regs, but I don't think there is anything in the Fannie guide that specifically states any REL/loan term relationship requirements? Could be wrong, though.

 

[CANative]

I know that FHA requires an estimate of REL (stated directly by the appraiser, not extracted from the CA by the underwriter), but I've not heard of that being a requirement for conforming? In fact, would have to look up the regs, but I don't think there is anything in the Fannie guide that specifically states any REL/loan term relationship requirements? Could be wrong, though.

Stop thinking in forms land. I said underwriters, chief appraisers, etc. (e.g. 20 or 30 years guys) tell me this is the rationale for wanting the CA. No solely because it is an approach to value, but the other information which can be obtained from cost/market analysis.

 

[alebrewer]

Stop thinking in forms land. I said underwriters, chief appraisers, etc. (e.g. 20 or 30 years guys) tell me this is the rationale for wanting the CA. No solely because it is an approach to value, but the other information which can be obtained from cost/market analysis.

Sorry - I wasn't thinking in forms land. I was thinking in terms of your comment about REL... I was saying that I wasn't aware of any conforming guideline that stated a specific REL/loan term relationship was required?... usually I think in terms of butterflies and zebras and moonbeams. If you're saying that CA may have some usefulness to intended users in the world you live in, I have absolutely no doubt that ye speaketh the truth.

 

[BRCJR]

And I've heard directly from those who make these decisions state their reason is for understanding or confirming there is enough REL in their prospective asset. Not to mention testing the reasonableness of the SA and/or IA conclusion.

They "should" be able to deduct that from the Effective Age on page 1 of 6.

 

[Tim The Enchanter]

The truth will come out. Or something.

 

[CANative]

They "should" be able to deduct that from the Effective Age on page 1 of 6.

Perhaps what I was thinking was determining if there was anything pointing to HBU and under improvements.

 

[CANative]

The former forum appraiser (he passed away about 10 years ago) from IndyMac. As well as a "chief appraiser" from Fifth Third and a very senior appraiser from another bank - can't remember which one but I liked them as a client.

I think there have only been two or three appraisers on this forum who didn't care much for the CA and I still admired them. Santora and Ben V.

 

[George Hatch]

Quantifying accrued depreciation is always the weak spot. Testing the approach against new construction in various situations readily enables us to calibrate the other elements.

 

[BRCJR]

Perhaps what I was thinking was determining if there was anything pointing to HBU and under improvements.

Cannot argue those points.
I was thinking from the lender standpoint. If the REL was 20 the lender would have an issue with amortizing the loan for 30.

 

[Carnivore]

OK, question little off track from the extraction method. But I do use multiple new construction if possible or a mix or just existing. I really depends on whats available.

But i have a question related to vacant lot sale. I have one area where its getting bat chit crazy where buyers are desperate to buy anything. Demand is way above supply. It is a mix of mostly old 1920'2+ bungalow, craftsman, and some mid fifty's style.

In this area I have four recent vacant lot sale. The price paid per sft is pretty consistent between them. OK, so this seems like the Gold Standard.

Here is my question in this context; Vacant Ready for improvement. Do i subtract the tap Fee's?

Tap fees are relatively expensive $3000-$3500 Once paid they are always paid. but as a percentage of the lot sale prices averaged $200,000 for each lot they are fairly low.