Fourth Comps and the Consequences

[Terrel L. Shields]

Verne said

a real chicken lover

Don't get me started on Chicken stories.....my favorite ones are true. A college chum asked me once to hide his car about 3 days before the end of school...I lived off campus. Seems he swiped some birds from the school farm and fed and watered about 6 chickens for a day, then pried open the convertible top from his dorm nemesis and stuffed the chickens in about midnight. By mid-morning when the hapless fellow found the birds....well, it was quite a hoot.

 

[terr]

I get these rural dog orders and of course no good comps exist. I am punished then punished again when uw askes for comps that do not exist.

What a pain.

 

[Blue1]

Underwriters have a check list for reviewing appraisals. Every company has a different check list. If too many "check" boxes lie outside the "normal" range....."red flags" are raised which may include such things as "an additional comp" or a "field review." Any amount of explanation or supportive argument is futile. They just want "one more comp" and, usually, they don't care where it comes from. It could be miles and miles away.....they just need "one more comp." All in all, it's easier to just give it to them. You'll be a hero and the loan will close which means your client (the lender) will get paid. This does great things for your image. Your client knows it's ridiculous and will probably be on your side anyway....Just do it.........after all, they got all the money.

 

[bradellis]

Blue,

Sorry, its a little more complicated than that.

If the first 3 comps tell the story, then that is all that is needed. If not, then more data is generally better than less data.

There are two scenarios. One is that the data available is so sparse and dissimilar that the underwriter just needs to see more of the info. Sometimes, if you simply explain that you are aware that the data is such, you avoid the call altogether.

The second is that there is extra relevant data out there and the appriaser was simply too lazy to finish the job.

I see both of these daily. Sometimes I just want to tear my hair out- but I do not have any left!

My Dad used to tell me this: "If you don't have the time to do it right in the first place, where on Earth will you find the time to do it over?"

Put yourself in the UW's shoes if you can. Did you tell them what they really needed to know. Will a 4th or more comps shed additional light on the question" If so, include them up front. If not, say so and say why.

If for example you said the area was rural, there is no good reason for a UW to ask for a closer comp. But if it is urban, you ought to expect a call if all your comps are over a mile. It is pretty simple.

Brad Ellis, IFA, RAA

 

[Mike Garrett RAA]

Brad, we had as one of the instructors for the USPAP instructor's seminar, Mr Kenneth J. Kaiser - Chair of the 2001 ~ 2002 Appraisal Standards Board. He often made reference to "More means
Better", which according to him isn't necessarily true.

Very interesting discussion on "Limited" vs "Complete"...both terms are on their way out as is "Departure". The new thrust is toward three things.
Intended User, Intended Use, and Scope of the Work.

Stay tuned boys and girls, it is going to get interesting!

 

[Blue1]

bradellis,

You're right, that's the way it SHOULD be.....educated underwriters actually READING reports and making intelligent demands. If you are an underwriter, then my hat's off to you. However, be aware thare are those out there that have no concept of what an appraisal is and are put in charge of underwriting loans armed with a "checklist" or automated underwriting program.