Help with REO Addendum (Chase Desktop)

[Mike Ciaccio]

I am using "quantitative" form , not sure that matters, just more adjustment lines for listings.

Guess I am brain-farting, but here goes:

I am having difficultly understanding how adjusting "listings" will result in two values, as-is and as-repaired.

If I use a similar quality/condition listing, which will not require adjustment and then a superior quality/condition listing that represents an as-repaired comp -- but then make condition adjustments, how the heck do I get two values, since all will be adjusted relative to the subject's current condition?? The repairs recommended by the BPO do not constitute safety/security issues, so no cost-to-cure adjustment, it already accounted for in the Q/C ratings.

Thank you!


NOTE - IF YOU ARE ONLY GOING TO POST THAT I SHOULD NOT BE DOING AN REO ADDENDUM BECAUSE I HAVE QUESTIONS, THEN DO NOT WASTE MY TIME, FORUM CURMUDGEONS!!! FROM EXPERIENCE, ANY POST GETS THOSE IDIOTIC REPLIES. RE-READ USPAP ABOUT GAINING REQ. COMPETENCY, THEN FIND SOMETHING BETTER TO DO!!!

 

[Mike Ciaccio]

Okay, I think I have answered my own question, in part.

The "quantitative" form must be the wrong one to use here. It has an adjustment grid, while the "standard" REO Add. does not have room for adjusting listings. Now, it makes sense. How to arrive at these separate values in the Quant form is another story, no time for that today...

 

[Meandering]

Sorry but,

The active listings don't get you support for the as repaired values.

Sadly, and nothing to do with you, the REO addenda was designed when disposition and liquidation were future values, but then Fannie decided they were future market values, and then the Treasury and the AI decided that disposition and liquidation values are now current values, so all the active listings are doing is supporting your value against current competition if the client chooses to list the property for sale. And, are indications of the marketing time based on DOM. Otherwise, they won't get you where you're trying to go.

You need closed sales and active listings for both the as-is and as repaired conditions of the subject. It's the only way.

.

 

[Mike Ciaccio]

Sorry but,

The active listings don't get you support for the as repaired values.

Sadly, and nothing to do with you, the REO addenda was designed when disposition and liquidation were future values, but then Fannie decided they were future market values, and then the Treasury and the AI decided that disposition and liquidation values are now current values, so all the active listings are doing is supporting your value against current competition if the client chooses to list the property for sale. And, are indications of the marketing time based on DOM. Otherwise, they won't get you where you're trying to go.

You need closed sales and active listings for both the as-is and as repaired conditions of the subject. It's the only way.

.

Thank you Marion! That confirms what has been rattling around in my brain. I already provided three as-is and two as-repaired sold comps to support the two values on the Chase desktop form. REO Addendum seems so counter-intuitive to logic. The AMC rep. said earlier in the day that Chase is constantly ordering revisions to the "Chase Desktop with REO addendum" products. You would think that if the form did not provide the data they wanted, they would revise the damn form! or at least provide clear instructions in the engagement letter. Or how about specify which REO addendum form they wanted. Guess I am over the learning hump now.

On a similar note, I read through some of the old forum posts on as-is vs as-repaired. What struck me were prevalence of comments saying as-repaired should always exceed as-repaired. That sounds like fudging numbers to me. Cost does not equal value. What if cost-to-cure exceeds value received? Then it would not be profitable for owner to complete repairs. Which is the main reason the banks order these, no? To determine if they should complete repairs or dump as-is? As well as determining list prices, DOM, exposure times, repair estimates,of course....

Also, seems cost-to-cure estimates should include labor (EP for contractor), not just materials. Lots of comments regarding this in forum. You can't hire someone to do repairs and only pay for materials, right? Bringing the property to marketable condition precludes having someone do the work.

Your feedback is appreciated, Thanks!

 

[Meandering]

On a similar note, I read through some of the old forum posts on as-is vs as-repaired. What struck me were prevalence of comments saying as-repaired should always exceed as-repaired. That sounds like fudging numbers to me. Cost does not equal value. What if cost-to-cure exceeds value received? Then it would not be profitable for owner to complete repairs. Which is the main reason the banks order these, no? To determine if they should complete repairs or dump as-is? As well as determining list prices, DOM, exposure times, repair estimates,of course....

Also, seems cost-to-cure estimates should include labor (EP for contractor), not just materials. Lots of comments regarding this in forum. You can't hire someone to do repairs and only pay for materials, right? Bringing the property to marketable condition precludes having someone do the work.

Your feedback is appreciated, Thanks!

Sorry, I let my mind reader certs expire, so I can't certify as to "why" they do it, but I have my hunches.

Go with a mix of as-is and as-repaired comps and listings, throw in the additional listings addenda if you feel more than 3 gets you the best support. Costs to do not equal value. Some costs do not impact sale prices. No, I won't pay more for the house because you painted the bathroom, or fixed a window. Yes I'll look for a steeper discount to repair it my self, and No, I'm not a typical buyer. I'll make you cuss the day you thought you wanted to sell your home. However, the market reaction to such things is going to depend on real numbers uncovered in sales. If you can speak to those flippers, what they paid, what they spent and what they resold them for, you'll get an indication of the premium over costs, but that is only if, the market is such that investors are participating.

.

 

[J Grant]

The listings on the REO addendum are not the only determiner of value. Whether it is an as repaired additonal value, or client imposed market exposure of limited days, sales need to be analyed as well. The REO addendum is the page the listings are placed, it does not mean additional values on the REO addendum are based solely on the listings.

 

[Dan Umstead]

How much does Chase pay for a desktop REO?

 

[JTip]

How much does Chase pay for a desktop REO?

$100 buys a lot of fresh shrimp off the boat...and a bag of hush puppy mix...and a six pack...

 

[Mr Rex]

$100 buys a lot of fresh shrimp off the boat...and a bag of hush puppy mix...and a six pack...

try $80 1234567890

 

[Bobby Bucks]

Leave it to Chase to create an REO desk review..... this will be good news for those purchasing their specific REO inventory.... a jug of Clorox could cure $50,000 of BPO mold.