Hybrid Appraisals

[DWiley]

The primary impetus for exploring the use of hybrid appraisals was the long turn times that result when the market spikes. Anyone remember the spike in 2015 or 2016 that gave rise to the term the "COW" states (Colorado, Oregon and Washington) - those where states were turn times were VERY long. And, of course we all know what happened during COVID. Having someone else collect the data and having the appraiser focus on analyzing the data is just a way to gain efficiency in such times.

Of course, right now there is little concern about turn times, because loan volume is so slow. But we all know that markets change, and there will be another spike someday. The use of hybrids is a way to help alleviate the stress on the system that a spike could generate. The findings related to condition ratings and inspections/repairs was not an expected result, just something that the analysis revealed.

 

[Joe Flacco]

The primary impetus for exploring the use of hybrid appraisals was the long turn times that result when the market spikes. Anyone remember the spike in 2015 or 2016 that gave rise to the term the "COW" states (Colorado, Oregon and Washington) - those where states were turn times were VERY long. And, of course we all know what happened during COVID. Having someone else collect the data and having the appraiser focus on analyzing the data is just a way to gain efficiency in such times.

Of course, right now there is little concern about turn times, because loan volume is so slow. But we all know that markets change, and there will be another spike someday. The use of hybrids is a way to help alleviate the stress on the system that a spike could generate. The findings related to condition ratings and inspections/repairs was not an expected result, just something that the analysis revealed.

I mean, demand greater than supply, results in higher fees, and suppliers respond by adding more capacity because it is feasible to do so. That is how markets typically work.

 

[shrubberyvaluation]

The land records for the one I completed recently shows the project is an HOA. The HOA includes townhouse units and a mid-rise building with apartments in a condo association within the HOA. My subject is a townhouse unit and is not in the condo association. The PUD application shows that the entire project was submitted as a condo association, but the approved order crossed out the words "condominium". The assessor records says it is not a condo. The deed for the subject unit describes it as a condo.

We are waiting to see what title says.

I go by the deed typically. Not sure I'm familiar with that specific one by the description.

 

[shrubberyvaluation]

The findings related to condition ratings and inspections/repairs was not an expected result, just something that the analysis revealed.

Is there somewhere I can see these findings? Do those condition ratings relate to better appraisals? If someone has a subject and all comps are similar in condition does it matter much whether its rated c3 or c4 in the grand scheme of things? What matters more to me is adjusting correctly for differences in condition of the comparables.

More inspections and repairs is not always a good thing. It is when they are warranted. What is the analysis on that? Appraisers might be more sensitive to call for repairs or inspections when they can't see it firsthand (maybe something in wrong in that picture but I can't tell and I can't ask the PDC) and for liability reasons.

 

[Joe Flacco]

I go by the deed typically. Not sure I'm familiar with that specific one by the description.

But if it is condo, there should be a condo declaration that describes the subject unit. There is only Master Declaration of Covenants, Conditions and Restrictions for the townhouse units. There is only a condo declaration describing the units in the mid-rise building.

 

[CGinMN]

Wouldn't a great solution to the shortage issue be to just be to simply publish data on specific appraiser shortages + average fees in the various areas of the country, and have the market figure out solutions? I know of an appraiser who flies into the Bakken every month from two states over in Idaho to inspect 30 properties at a time. They fly from Boise -> Mpls -> Bismarck -> then rent a car and drive to Williston. This is very inefficient when there are appraisers in Minot, Dickinson, and Waterford City.

 

[shrubberyvaluation]

But if it is condo, there should be a condo declaration that describes the subject unit. There is only Master Declaration of Covenants, Conditions and Restrictions for the townhouse units. There is only a condo declaration describing the units in the mid-rise building.

I would put that on hold like I assume you did until I got a definite answer.

 

[shrubberyvaluation]

Wouldn't a great solution to the shortage issue be to just be to simply publish data on specific appraiser shortages + average fees in the various areas of the country, and have the market figure out solutions? I know of an appraiser who flies into the Bakken every month from two states over in Idaho to inspect 30 properties at a time. They fly from Boise -> Mpls -> Bismarck -> then rent a car and drive to Williston. This is very inefficient when there are appraisers in Minot, Dickinson, and Waterford City.

Which is one reason why they want to do hybrids I guess. Of course I'd assume he has geographical competence doing that much volume in the area, which the hybrid pushers think isn't necessary.

 

[Joe Flacco]

I would put that on hold like I assume you did until I got a definite answer.

I submitted it saying that it is a PUD with an HOA which includes a condo portion which the subject is not in.

The reviewer is taking a closer look at it because there is no land area for the subject. We are waiting to see what title says. I think the deed is probably wrong describing it as a condo.

 

[Zoe]

The land records for the one I completed recently shows the project is an HOA. The HOA includes townhouse units and a mid-rise building with apartments in a condo association within the HOA. My subject is a townhouse unit and is not in the condo association. The PUD application shows that the entire project was submitted as a condo association, but the approved order crossed out the words "condominium". The assessor records says it is not a condo. The deed for the subject unit describes it as a condo.

We are waiting to see what title says.

Yeah, that is the way it works. The difference mainly has to do with who is responsible for the land outside the boundaries of the physical improvements.

That is part of the bundle of rights on the subject.

The condo association owns the whole plat and the subject pays a fee for property rights for the physical boundaries of the subject. A PUD does not own the whole land plat of the subject development in a PUD development.