Is Driving By Comps Still Necessary?

[jeff samolinski]

No say it ain't so- Is this another example of the lenders baiting the traps?

 

[Pamela Crowley (Florida)]

This is a lender-driven problem, but requires a willing appraiser. My opinion: if you are signing the certification outlining the scope of what you have done in the assignment and you don't do everything you've certified, you are opening the door for eventual trouble.

IMO, it's fraud because you just signed that you did something that you didn't.

 

[Steve Owen]

The reports don't consider obvious external influences or quality differences, either in the construction or the location.

Whether you could do a good appraisal without viewing the comps would obviously (IMHO) be contingent upon whether you knew the area well enough.

BTW, I would never do one this way and then sign the certification. If they want an appraisal without comp photos and I still have to certify I viewed the comps the fee is still the same. Comp photos are no big deal, driving is.

I'm sure there are sleazy LO's somewhere who would like to rope appraisers into this - lower fee, still sign the FANNIE MAE certification. I would not even consider doing it that way.

However, I would do one without inspecting the comps if I could do a reasonably good job of it and that's what they wanted.

We see appraisers all the time who come in a do a job for WalMart or similar large companies. They fly in from Atlanta or some other place. They consider a comp anything comparable in a similar sized market anywhere in the country. Think they look at all of them?

 

[Jim Onderisin]

In a different life, I developed some street wisdom. I'm the type who constantly scans my environment for threats. The no-comp-photo appraisals I mentioned are a trap for the unwary. Will appraiser's who do these assignments and not inspect the comparables ever have a suit or problem? Probably not. But, I'm not one to take the chance. I'd have no problem doing them if my disclosures would over-ride the signed certification, but as George already pointed out, that is not the way it works.

 

[tommcsherry]

Pro and con:

Most of the time...especially here in Las Vegas...there is not much difference between the comps that can be visually determined by an inspection from the street that couldn't have been determined from an MLS comp photo (especially since many agents are taking the time to take extra pictures and make them part of their listing).

Almost every comp I drive is the same as the subject....frame/stucco, tile roof, blah, blah, blah.

However, the externality issues are important...things like presence or quality of view, gated communities, etc....and those DONT always show up....making it a practical (not just theoretical)necessity to drive them.

Although not every area has the same issues, all are subject to having some form of external influences nearby that potentially modify the impression you get from just the MLS description.

Driving comps sux, but imho, it needs to be done. Fortunately, in Vegas they're a lot closer and less scatterred than they were in Michigan. It's really cool to be able to drive 5 comps in 15 minutes. (ok...so I exaggerate a little...but sometimes this really IS the case!).

 

[StephHigdem]

I drove past a comp on a Friday a few weeks ago (my supervisor had the camera), took some notes & used it in the report. The following Monday I went to take the picture... they had torn the place down over the weekend!

You can just imagine the letters I had to write on that one...

 

[Steve Owen]

Jim, in general I agree with you. But, please don't forget that all appraisals are not for FANNIE MAE or secondary market mortgage applications. You are correct is stating that if an appraiser does something like this, appropriate comments including a tightly worded extraordinary assumption (concerning condition of the comps) MUST be included.

 

[Eric Bishard]

A lot of my adjustments cannot be justified in my own mind unless I have seen the comparable property.

Other times, I would not have come up with a certain adjustment unless I had seen the proerty.

For instance.. The MLS listed a property as having no water frontage. It had sold slightly higher than all the other comps without water frontage. I would not have known to adjust for a pond unless I had seen it in person.

A lot of times I get out and notice things that are completely different than in the MLS.

 

[Charlotte Dixon]

Originally posted by Eric Bishard@Feb 22 2005, 08:06 PM
For instance.. The MLS listed a property as having no water frontage. It had sold slightly higher than all the other comps without water frontage. I would not have known to adjust for a pond unless I had seen it in person.

I have found in some MLS descriptions:
"water view" ....faces a storm drainage pond
"porch".....a tiny little roof over a stoop
"needs a little TLC"......a real dump

I ride by my comps.

 

[Mister Ed]

We just suspended someone yesterday for using MLS photos rather than driving by the comps and viewing. We were suspicious of the shortcut being taken and I caught it when I was helping my boss review the report of a trainee who generally did good work and is about 3 months from being eligible to take the state exam.

We have pulled every file for the past 3 months to review. We have one client who does not require supervisor to inspect. That is the case with this report that is being reviewed--and the case of all of her files that are being reviewed. Our concern is that if she is taking these shortcuts when not being followed by a supervisor....what will she do when she is licensed and working under our company name?

She used an MLS photo representing a subject I had appraised about one month ago. The MLS photo was of the wrong house! I remembered it because the sellers were particularly courteous and helpful to me when I visited the property. They also had the GarageTech people come out and completely reorganize their garage. It looked so good that it got me interested in calling them to work on my garage... and I included about 3 pics of the storage build-ins in my workfile.

My boss (her primary supervisor--I am secondary) and I called her into his office and asked her about this. She said that she drove by, but did not take a picture because the MLS pic better represented the house at the time of the sale.

I pulled out my appraisal of that property she used as a comp showing her the photo of the house on the Table of Contents page and asked, "Did the comp look like this?" She shrunk in her chair. Then she admitted that she had not driven by.

Here is how I was taught:
UNLESS someone is in the yard and says to me, "DO NOT TAKE A PICTURE OF MY HOUSE!" I will take a photo of the comp and put it in my work file and in my report. If there is a marked difference between the MLS photo and my photo (i.e., new owners have upgraded considerably or just let it fall apart), then BOTH photos are in the report with an explanation.

Just my 2 cents worth.