I called a Realtor for the lock box code on an REO today and he said "while I have an appraiser on the phone, can I ask you what adjustments are for on this thing the bank calls a BPO".
Also got an "importnat message" from LSI today.
IMPORTANT NOTICE –PLEASE READ
Evaluations in Declining Markets – Comps and Listings
COMPS
Now, more than ever, it’s important to have an open mind about value when you start your comps search.
DON’T look at the subject and say to yourself, “That’s a $200,000 house,” and then find three $200,000 sales and send them in. If you are mistaken, you will never know it, because by searching on price you’ve ensured that all you’ll find is data that confirms your opinion. This is the wrong way to complete a BPO.
DO search for recent sales and current listings of properties that are nearby and similar in features to the subject, and let these sales and listings TELL you what the value is.
Use the following general criteria when you search for comps (always check place notes, too, for specifics):
• Radius distance—start with a ½-mile search and extend mileage only as the property and area dictate…closer is better!
• Date of sale—in every case, and particularly when values are decreasing or increasing, sales should be within six months of the inspection date
• Property type—should be the same as the subject
• Style—should be the same as the subject
• Age—should be similar to the subject…a new house does not typically compete with one that is 50 years old
• Size—ideally, comps will have GLAs that are within 20% of the subject’s
• Lot size—should be similar, but if the subject lot size is atypically large, it’s better to base the value on sales of nearby houses that are similar and add something for excess land value than to use sales of distant or dissimilar sales in an attempt to bracket lot size
• Bed and bath count—should be similar…for properties with fewer than 3 bedrooms and 2 baths this becomes particularly important.
Sounds like the banks would rather get there listing price from people that have NO Freaking clue than use appraisers. I just wonder what the ramifications will be of these values are so far off that no one knows what the value is???
Also got an "importnat message" from LSI today.
IMPORTANT NOTICE –PLEASE READ
Evaluations in Declining Markets – Comps and Listings
COMPS
Now, more than ever, it’s important to have an open mind about value when you start your comps search.
DON’T look at the subject and say to yourself, “That’s a $200,000 house,” and then find three $200,000 sales and send them in. If you are mistaken, you will never know it, because by searching on price you’ve ensured that all you’ll find is data that confirms your opinion. This is the wrong way to complete a BPO.
DO search for recent sales and current listings of properties that are nearby and similar in features to the subject, and let these sales and listings TELL you what the value is.
Use the following general criteria when you search for comps (always check place notes, too, for specifics):
• Radius distance—start with a ½-mile search and extend mileage only as the property and area dictate…closer is better!
• Date of sale—in every case, and particularly when values are decreasing or increasing, sales should be within six months of the inspection date
• Property type—should be the same as the subject
• Style—should be the same as the subject
• Age—should be similar to the subject…a new house does not typically compete with one that is 50 years old
• Size—ideally, comps will have GLAs that are within 20% of the subject’s
• Lot size—should be similar, but if the subject lot size is atypically large, it’s better to base the value on sales of nearby houses that are similar and add something for excess land value than to use sales of distant or dissimilar sales in an attempt to bracket lot size
• Bed and bath count—should be similar…for properties with fewer than 3 bedrooms and 2 baths this becomes particularly important.
Sounds like the banks would rather get there listing price from people that have NO Freaking clue than use appraisers. I just wonder what the ramifications will be of these values are so far off that no one knows what the value is???
