Finance guy looking to learn

[Norakered]

Last time I was insulted was when a lender sent me a request to review 8 sales all outside of the neighborhood boundaries. Was an investor renovation, all of the comps I used were investor renovations with 2 being from the same investor. It was clearly just to get me to bump my appraised value up.

It seems you are on the right track. Like I mentioned before I would make sure they are in the defined neighborhood boundaries in the report and they are not on the other sides of major roads or different school districts. Also check the condition and updates as these could be major factors.

Disclaimer: I do not know the Tampa market area, this is generic.

Edit: Also above ground pools we do not include in valuations due to being personal property, I didn't see you specify if they were in ground.

Sorry. I didn’t know above ground was personal property. This is a salt-water system, inground sport pool. The whole thing was around $100k installed. I know it’s crazy to expect dollar for dollar on these things.

 

[J Grant]

All three comps I furnished were within .61 miles. Same school districts, HOA amenities, same shopping malls, same building materials and finishes. The ones I provided are much closer “products” as they all have a pond in the back, a pool, a birdcage (screen enclosure that surrounds the pool) and finished pavers that transition from the house to the backyard and around the pool. I’m certainly no expert and I know I don’t hold a candle to any of you guys. I’m just trying to understand the why so I can have an intelligent, informed conversation about it and be better at my job moving forward.

The appraisal sounds deficient, so why is your company using the AMC ? I noticed you ignored my comments about some of this is due to AMC low fees and sorry to say lenders who are aware of it and do othing to rectify are part of the problem.

Appraisers have to make up the income somewhere and if they work for low AMC fees they rush and pile up a huge amount of reports. Of course a non AMC appraiser can do a poor job also but it is less likely, which is why some lenders assign the work directly from a panel ....

 

[Norakered]

We’re all in this together. I think the only way the industry gets better is if we all work toward a common goal of fair and always working to improve. I really appreciate your input here. As a note, it is five bedrooms plus an office. I’m not claiming the office to actually be a bedroom. The appraisal sketch is legitimately missing an entire room on it. On the top floor (the office is on the first floor), there are four bedrooms, all of which have closets, condition air, and an egress window. I know he’s human and we all make mistakes.

I know it’s crazy how the AMC collects a chunk and doesn’t pay you for a month. That’s why my part of the industry is so excited for UWM’s appraisal direct program. They are the lender and they pay 100% of the appraisal fee to the appraiser and they pay basically right away. It’s either going to force the AMC to pay you guys more and faster or they’ll eventually become obsolete.

“Appraisers who work with UWM Appraisal Direct will receive the full appraisal fee paid by the borrower. This means UWM will not pocket any management fees and 100 percent of the fee will go to the appraiser. Appraisers will also be paid the next business day following a successful appraisal completion.”

September 9, 2021 - UWM announces upcoming launch of Appraisal Direct

Lender announces internal appraisal team to provide a better appraisal process for brokers, their borrowers and appraisers

www.uwm.com

 

[George Hatch]

Calling the room an office doesn't amount to attributing zero value to that partition or that space.

You seem to have a good handle on the GLA and proximity issues, but there are others in play. Actual age is an element of comp selection as is design/appeal. These are factors Zillow and the like don't seem to take into consideration.

Homes built during different time frames will have different designs and elements, such as floorplans, ceiling heights, exterior finishes, kitchen buildouts, etc. If our subject is a 1980s subdivision home then we need to stay away from the homes that were built during the later 1996-2006 real estate cycle. Different design features and buildouts. Even if the 1980yb home has been remodeled the room sizes and ceiling heights and layouts remain the same. The numbers might look similar but there's more to these comparisons than the number.

At any rate our general process is to start out with our subject's combination of attributes and search outward from there, retaining as many of those attributes in our search parameters as possible. "Price" not being one of those search parameters because "price" is the answer to the question, not part of the question itself.

OTOH, RE brokers commonly use price as a search parameter, as is appropriate for what they're doing. Their role includes matching the payment to the buyer's budget. No different than buying a car where the sales rep puts the pitch "If I can get you into this car for $400/month would you buy it?"

Different roles, different goals and results, different questions being asked/answered. That's why it's a big mistake for appraisers to expect brokers to do "value" the same way we do and vice-versa.

 

[Norakered]

The appraisal sounds deficient, so why is your company using the AMC ? I noticed you ignored my comments about some of this is due to AMC low fees and sorry to say lenders who are aware of it and do othing to rectify are part of the problem.

Appraisers have to make up the income somewhere and if they work for low AMC fees they rush and pile up a huge amount of reports. Of course a non AMC appraiser can do a poor job also but it is less likely, which is why some lenders assign the work directly from a panel ....

Sorry I replied to that part late. Here’s what I said after I realized I missed it.

I know it’s crazy how the AMC collects a chunk and doesn’t pay you for a month. That’s why my part of the industry is so excited for UWM’s appraisal direct program. They are the lender and they pay 100% of the appraisal fee to the appraiser and they pay basically right away. It’s either going to force the AMC to pay you guys more and faster or they’ll eventually become obsolete.

“Appraisers who work with UWM Appraisal Direct will receive the full appraisal fee paid by the borrower. This means UWM will not pocket any management fees and 100 percent of the fee will go to the appraiser. Appraisers will also be paid the next business day following a successful appraisal completion.”

 

[ramrcdk]

I appreciate the information. He said the reason for the comps he selected was proximity. The client requested that I submit a rebuttal on the valuation. I tried to speak to facts alone since opinion wouldn’t help anyone in this scenario. I tried to keep it as professional as possible to avoid inadvertently insulting the guy. We live in an area where most houses are $500k+. After reading through the report, I found I didn’t understand the GLA adjustment on a standard dollar amount. In this case, the value used for the almost 600 sf was $40/sf. I feel like an idiot not understanding the intricacies of the appraisal process.

My statement is pasted below.

The house that was appraised is a five-bedroom, three-bathroom house PLUS OFFICE, right??? The appraiser listed it as a four-bedroom, three-bathroom house. That is the main reason a rebuttal was submitted. I’ve included the MLS listing for reference. I’ve also included reasoning for the questioning of the comparable houses that were used.

I EDITED my initial Post.
The Appraiser should correct the report & sketch: 5 bedrooms, plus Office. Again to say, around here considering the total GLA, 1 bedroom may not be extractable for an applied variance.

While the property that was used as comparable sale 1 was close in proximity, it was a house with four bedrooms and three bathrooms, with a GLA of 2,503. The subject property is 3,116. That is a 24.49% variance in GLA.

Just under the 25% rule typically requires a lender comment when >25%. BUT: not a Fannie Mae necessary comment.

The first two comps that were used on the appraisal were four-bedroom, three-bath houses. The third comp that was used on the appraisal sold back on April 2, 2021.

3rd Comp sold in April. Did the report consider via comment a possible change in price, "market-based time adjustment"?

The first property I provided sold on July 8, 2021, with a lake in the back of the property, similar to the subject property, along with a pool, screened backyard and pavers. This GLA was 3,210 which is a 2.92% variance from the subject property.

The second property I provided sold on May 24, 2021, with a lake in the back of the property, similar to the subject property, along with a pool, screened backyard and pavers. This GLA was 3,210 which is a 2.92% variance from the subject property.

By your examples, given a similar to offsetting: "location", site, view, quality, effective age, condition: seems to me those sales should be used in a ROV. Via, Fannie guidelines, one should NOT provide a endless number of sales, as was another- Posters experience.
Again, review the Web Site to better serve your goal.

 

[Norakered]

I EDITED my initial Post.
The Appraiser should correct the report & sketch: 5 bedrooms, plus Office. Again to say, around here considering the total GLA, 1 bedroom may not be extractable for an applied variance.

Just under the 25% rule typically requires a lender comment when >25%. BUT: not a Fannie Mae necessary comment.

3rd Comp sold in April. Did the report consider via comment a possible change in price, "market-based time adjustment"?

By your examples, given a similar to offsetting: "location", site, view, quality, condition: seems to me those sales should be used in a ROV. Via, Fannie guidelines, one should NOT provide a endless number of sales, as was another- Posters experience.
Again, review the Web Site to better serve your goal.

Thank you for your expertise, time and willingness to help a guy you’ll probably never meet. It’s very much appreciated. I’m going to read as much from Fannie and Freddie about guides as possible until I have a strong understanding.

 

[ramrcdk]

Sorry I replied to that part late. Here’s what I said after I realized I missed it.

I know it’s crazy how the AMC collects a chunk and doesn’t pay you for a month. That’s why my part of the industry is so excited for UWM’s appraisal direct program. They are the lender and they pay 100% of the appraisal fee to the appraiser and they pay basically right away. It’s either going to force the AMC to pay you guys more and faster or they’ll eventually become obsolete.

“Appraisers who work with UWM Appraisal Direct will receive the full appraisal fee paid by the borrower. This means UWM will not pocket any management fees and 100 percent of the fee will go to the appraiser. Appraisers will also be paid the next business day following a successful appraisal completion.”

YES, thank you for that UWM information. THE REASON I can't ...the ANOW-NEXUS system
is set-up to charge the appraiser $15 per Order PLUS + a 2.9+_% charge. IS the percentage charge based on the """Appraised Value"""????
Of course, we can build that into our FEE. BUT when we DO the "BROADCAST ORDER" system so far seems to GO to the lowest BID.
**SO FAR, I have not GAINED an Order but HAVE wasted time in trying.
IF you know of a WAY to avoid this OR educated me, please PM me on this forum.
ALSO: FYI: The ANOW system seems to be extremely lacking compared to other Ordering Sites. Example: Mercury, very easy with a $15 upload fee.
Here AF Posters have had to work-around the multi-error-Anow system & deliver the Report to the individual rep's email.

 

[Terrel L. Shields]

My questions - How do comps work and how do you decide which comps to use?

If you came here to learn there is a chance we subtract from the sum total of your knowledge...

I would speculate that the 4 bedroom plus office is far easier to 'comp' with other 4 bedroom houses rather than try to find a house with 5 bedrooms... The AMC "fact checker" - a computer or some bloke in India - might ding you if you have a 5 bed and only 4 bed homes. Outside of luxury homes, few ordinary homes have 5 bedrooms. But sounds like in your case, he merely missed a room, or perhaps one bedroom is low ceiling/slanted wall and not counted in the GLA???

lmost 600 sf was $40/sf. I

surplus SF is normally merely space (no appliances, plumbing etc) therefore adjusts at a lower dollar amount that the overall $/SF .... and the gross bucks per SF need to be applied only to the SF of the house, not the land value thrown in on top of the house value.

 

[J Grant]

Most lenders who order direct use Appraisal Port or Mercury or a similar portal It is baffling why Anow is being used I personally have no experience with it but from appraiser feedback seems like a nightmare most of the time.