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FHA 2055 Drive By

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Metroappr

Junior Member
Joined
Jan 20, 2005
Professional Status
Licensed Appraiser
State
Michigan
Hi, I was offered a 2055 FHA drive by for a SFR. The client requests a as-is with an assignment type "Other Asset Valuation. I have never done a drive by 2055 FHA report before. How do you treat items that need repair if you can not see them? The home is still occupied by current owner-I think. It has not gone back to the bank or is on the MLS as for sale. They also stated ""we need a drive by appraisal only. This is for a foreclosure sale"

Do I include non bank owned sales or homes that appear to be similar in condition (based upon ext inspection) or include all bank owned sales? The home is not currently for sale. Any help would be great before I accept this assignment.
 

Tom D

Senior Member
Gold Supporting Member
Joined
May 22, 2015
Professional Status
Certified Residential Appraiser
State
Pennsylvania
normally they want you to assume it's in c4 condition, but if it's vacant (i have had those) you can get a better idea of interior thru some windows, maybe. assume a c4 in the older range. also, state that you assume the utils are on, things are operating. this house when it becomes a vacant REO will always sell for less than your appraised value. there are exceptions. so use normal sales but i would be conservative.
a REO is a whole different buyer, but i bet that is not the value they want. be sure you word the purpose of the appraisal correctly. usually it's 'for internal use only, not for a mortgage".
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
I'd suggest make it clear how this FHA 2055 differs from a FHA 1004 and would indicate how many of FHA 4000.1 requirements are not applicable.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
First off, lets start with nomenclature...it's a 2055 EXTERIOR ONLY. That means you won't have knowledge of what might or might not need repairs or conditions of the appraisal. So, you will be making some assumptions as to the condition. I usually include commentary that says "appraiser assumes the interior condition would be comparable to what was observed on the exterior".

For that reason, I prefer not to do exterior only appraisals. Every once in a while it's necessary to one for the VA but most of the time I do gain access.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas

(1) Assignment Type


Under “Assignment Type” in the “Subject” section of the appraisal reporting

form, the Appraiser must mark the box labeled “other” and indicate that the


Property is a HUD Pre-Foreclosure Sale (PFS) Property.

(2) Intended Use of Appraisal

The intended use of the appraisal is to develop the as-is Market Value, which is a

Mortgagee’s tool for determining the list price of a HUD PFS Property (24 CFR §

203.370).


The Appraiser must inspect the interior and exterior of the Property. If the


Appraiser cannot enter the Property, the Appraiser may perform the valuation



based on an exterior-only inspection on the Fannie Mae Form 2055/
Freddie Mac

Form 2055, Exterior-Only Inspection Residential Appraisal Report, dated March

2005, or the Fannie Mae Form 1075/Freddie Mac Form 466, Exterior-Only

Inspection Individual Condominium Unit Appraisal Report, for a condominium


Property. The Appraiser must indicate that the Property could not be entered and

identify the sources of the factual property data employed by the Appraiser in

determining the value.
 

Kitarkus

Junior Member
Joined
Nov 15, 2006
Professional Status
Certified Residential Appraiser
State
Kansas
Hi, I was offered a 2055 FHA drive by for a SFR. The client requests a as-is with an assignment type "Other Asset Valuation. I have never done a drive by 2055 FHA report before. How do you treat items that need repair if you can not see them? The home is still occupied by current owner-I think. It has not gone back to the bank or is on the MLS as for sale. They also stated ""we need a drive by appraisal only. This is for a foreclosure sale"

Do I include non bank owned sales or homes that appear to be similar in condition (based upon ext inspection) or include all bank owned sales? The home is not currently for sale. Any help would be great before I accept this assignment.

I do these frequently. As with any 2055...you should view the property from street level and develop an opinion of physical condition. Oftentimes the Client Scope of Work specifically says "do not approach property or occupants". Is there deferred maintenance? Obvious updates? Is there recent historical listing data in your MLS relating to the property? Then use an assumption within your report (actually...many assumptions). You must assume that the records that you utilized were accurately reported relating to virtually everything...bed/bath count, condition (obviously), site improvements at rear, functional HVAC, typical appliances, lack of any adverse condition which could impact value or marketability etc.

Your opinions should be based on the best facts that you can gather...and should not contradict known physical features. I always attempt to bracket with a clearly inferior sale and a clearly superior sale...then wiht a third and most relevant sale. You can't overthink this. Make assumption(s)....stick to them....state them clearly...and support them. Within these Reports, I always include a statement similar to "The appraiser has made significant assumptions including but not limited to bed/bath count, physical condition, lack of adverse conditions, functional mechanicals, etc. Significant variations between the Appraiser's assumptions when compared to the Subject actual features/conditions could significantly alter the opinion of market value which has been expressed within this Report."
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
I always ask the client for a copy of the original appraisal, they don't always have one, but many clients do. It can be a great resource, plus, with FHA many times it's within the last couple of years, especially reverse mortgages. You can usually get some idea of any updates, etc. Best of all you can see who signed off on it, often times that's the most important item in the report. If there are any livestock visible in the den photo, I usually have hunch it's going to be sub C4. :)
 

Kitarkus

Junior Member
Joined
Nov 15, 2006
Professional Status
Certified Residential Appraiser
State
Kansas
I always ask the client for a copy of the original appraisal, they don't always have one, but many clients do. It can be a great resource, plus, with FHA many times it's within the last couple of years, especially reverse mortgages. You can usually get some idea of any updates, etc. Best of all you can see who signed off on it, often times that's the most important item in the report. If there are any livestock visible in the den photo, I usually have hunch it's going to be sub C4. :)

Wait. I must be missing something ;) Livestock in the den is not typical in North Dakota?

Sincerely,

Kansas Appraiser
 

Confident Rabbit

Senior Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Washington
If there are any livestock visible in the den photo, I usually have hunch it's going to be sub C4. :)
Out here those are pets, Bobby. Unless they're Longhorns. Then they're trouble.
 
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