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Heres Another New One

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Travis McGee

Senior Member
Joined
Sep 18, 2004
:eek: Underwriter refused to allow a comparable that closed after the inspection date or effective date, but before the date of the signature.

Is the value date the date of the value estimate? True the comp had not closed on the date of the inspection. My position is the comp is a valid and maybe the most valid reflection of current market.

Yes I could add another comp, or reinspect and change the effective date. Thats not the point. What do you think?
:redface:
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
The comp was under contract but had not closed. The date of appraisal is the date of inspection. Now, the fact that the sale was under contract and did close between the inspection and signature indicates that this is the best comp. That being said, it would be a 4th or 5th comp, and explain why, but you need 3 prior to the date of inspection to make the UW happy. This is not a battle to fight. Just add a comp and go on with life.


Roger
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Better yet....go out and reinspect the subject property and change the date of the appraisal!
 

Travis McGee

Senior Member
Joined
Sep 18, 2004
;) I already did what you guys suggested. Thats not what I was looking for. The question is: Is a sale that was under contract and closed after the inspection date but before the signature date and invalid comp?

:question:
 

Ron in AR

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arkansas
I'm doing one right now under the same circumstances. I need that new sale since it's the only one in the subject subdivision.

Try this, use it as a 4th comp and disclose that it closed after inspection but before signature. They can't argue with that.
 

Mickey Stevens

Junior Member
Joined
Nov 29, 2002
Professional Status
Certified Residential Appraiser
State
Dom. Republic
On what basis would it automatically be invalid? It seems to me that if the sale closed the day after the inspection that would be a much better indicator of value than one that closed 3 or 6 months prior to inspection. It seems to me that the closer to the inspection date, the more reliable. Even if the market values are increasing a sale that closed within a week or two after would still be more reliable than a 3 or 6 month earlier sale. This is of course assuming there has been no intervening event in the market which may have an effect on the value. But you have to consider that on all comps.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
A pending sale is not an invalid comp. If, as in your case, the sale closed before you signed the appraisal it may well be a perfect comp. Sometimes underwriters make up their own rules. If you want to get involved in this ask the underwriter where you can find the rule, also ask the underwriter for his appraisers license number.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Show me where it says it is an "invalid sale"???? Many times we have been ask to reconsider a value and they provide sales that closed after the effective date of the appraisal. If those sales would support a higher value, we re-do the appraisal (charge for it, of course). There is nothing magical about the inspection date...often we don't finish a report for 7 to 10 days after the inspection. If better data is available we should use it.

Common sense, folks, common sense. What is the better comp??? Personally I think appraisers should always include "under contract" listings as part of the research process. If you find one that is closing in a few days might be better to wait until it closes so you can use it.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Two issues here, the effective date of the appraisal vs. the date of the report; and does a sales transaction that closes immediately after the effective date of the apprasal qualify as closed sale for the purposes of that appraisal.

Effective date and date of the report - they may not be the same date and they may not even be in the same year depending on the nature of the assignment. The effective data of the appraisal for mortgage work is usually the data of inspection. Thus, the sale that closes immediately after this effective data but prior to the date the report is signed (date of the report) would not qualify as a closed sale for the purposes of that appraisal. It's still a valid comparable to include, and I would include it 10 times out of 10, even if just as a 4th comp. Actually, it's the best sale. But if it wasn't a closed sale as of the effective date of the appraisal then it wasn't a closed sale for the purposes of that analysis. Also, the saleprice available to the public prior to that closing, usually the listing price rather than the actual sales price, would be the information to participants in the market; IMO that's what should go into the report, with the actual sales price and financing info added as an additional piece of information.
 
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