Just What Is A Drive By 2055

[Ray Miller]

Taken from another thread.

I take drive-by assignments for what they are. I only include information that I can glean by driving by the subject.

I have come to the conclusion that most LO think a “Drive By 2055” is just that. You just drive by and never get out of your car, truck, van, suv, helo, plane, boat.

So how much work do you put into a 2055? How much work dose USPAP call for?

I for one put just as much or more work into a 2055 as a 1004. To me they are a lot harder to do, just to gather the information for the interior alone. A lot of them say not to talk to the owner.

I convert most of mine to a 1004.

So just what makes or not makes a good or bad 2055?

 

[Will43]

Originally posted by Ray Miller@Dec 6 2004, 08:05 PM
To me they are a lot harder to do, just to gather the information for the interior alone.

Ray, I agree they are often more work and usually less pay. I do very few drivebys, but lately I have been getting a few.

 

[TC]

I only do a 2055 exterior if I can gather fairly reliable info: previous appraisal, recent MLS, county info. I always walk the exterior and measure and I charge as much as a full URAR. If the subject appears to be in poor condition, I will request an interior inspection be done.


TC

 

[Robert Anderson]

Ray,

Most lenders I do business with use the term "2055 exterior" or something along those lines. I do not use the term drive-by because, as you note, it inaccurately portrays what we do.

I find that a 2055 exterior takes a lot less time because I don't have to inspect the interior of the residence, measure the exterior, sketch the exterior, and so on. I work in an area of tract houses with good assessor records and a comprehensive MLS. I suspect things may be much different and much more difficult in Wisconsin.

Unless directed not to, I frequently speak with the property owner. I don't see anything wrong with that.

As to your question 'what makes a good 2055,' generally the same things that make a good 1004. The only real difference is the methods used to gather information on the subject. You do have to make certain assumptions concerning the subject and these need to be clearly stated in the appraisal report.

BTW, almost all of the 2055 exterior appraisals I do are for refinance or foreclosure purposes. I would not do one on a purchase due to liablity concerns.

Best wishes,

Bob Anderson

 

[Neil Melby]

I agree with TC and Bob above,

I NEVER agree to a 2055 exterior at the starting gate, I always caution the client that I will only complete the assignment if I can get third party information that is complete enough to complete an appraisal that is not misleading.

Even then, I make use of extraordinary assumptions regarding size, condition, room count, etc, indicate where I obtained them, and indicate that if the extraordinary assumptions are later proven false, then the opinion of market value may be affected.

I also charge the same as for an interior inspection, to try and discourage the exterior only.

Neil Melby

 

[Frederick R. Ruffell]

If I have said it once I have said it a thousand times, READ THE SPECIFIC GUIDELINES OR REGULATIONS. Come on gang we are professionals and if you do not know the answer (or where to find the answer) to this very basic question then maybe you should not be doing this type of work????



XI, 203.02: Desktop Underwriter-Processed Mortgages (06/30/02)

We have three different streamlined appraisal forms that can be used for Desktop Underwriter-processed mortgages that are secured by one-family properties—the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055), the Desktop Underwriter Qualitative Analysis Appraisal Report (Form 2065), and the Desktop Underwriter Individual Cooperative Interest Appraisal Report (Form 2095). In addition, we have a fourth form—the Desktop Underwriter Property Inspection Report (Form 2075)—which an appraiser uses to document an exterior property inspection (but not to provide an opinion of market value) when we rely on the property valuation performed by Desktop Underwriter's proprietary automated valuation models. Our Small Residential Income Property Appraisal Report (Form 1025) should be used for Desktop Underwriter-processed mortgages that are secured by two- to four-family properties.

When a mortgage is processed in Desktop Underwriter, the system will recommend the use of one of three levels of property fieldwork. Regardless of the recommended level, the lender remains responsible for the quality of the fieldwork and must manage the property appraisal (or inspection) process, select the appraiser, and order the appraisal (or property inspection) report. One of the following levels of property fieldwork and review will be recommended by Desktop Underwriter based on the results of its risk analysis for a mortgage:

• The appraiser must perform both an interior and an exterior inspection of the property, and summarize the results of his or her analysis on the current version of either the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055) or the Desktop Underwriter Individual Cooperative Interest Appraisal Report (Form 2095), depending on the type of property;

• The appraiser should, at a minimum, perform only an exterior inspection of the property, and summarize the results of his or her analysis on the current version of either the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055), the Desktop Underwriter Qualitative Analysis Appraisal Report (Form 2065) or, if applicable, the Desktop Underwriter Individual Cooperative Interest Appraisal Report (Form 2095); or

• The appraiser should, at a minimum, perform only an exterior inspection of the property, and summarize the results of the inspection on the Desktop Underwriter Property Inspection Report (Form 2075).


The level of fieldwork recommended by Desktop Underwriter represents our minimum documentation requirements for the property. The lender may choose either to obtain the minimum documentation we require or to ask the appraiser to provide additional documentation (based on the specific characteristics of the individual case).

Desktop Underwriter's option of performing an appraisal based only on an exterior inspection of the property is predicated on the appraiser's ability to obtain sufficient information about the physical characteristics of the property from reliable sources. The appraiser's description of the physical characteristics of the property should be based on what he or she considers to be reliable data sources for the property and location. The appraiser should use the same type of data sources that he or she uses for comparable sales—multiple listing service information, tax and assessment records, observations from prior inspections, previously prepared appraisal files, information provided by the property owner, etc. If the exterior inspection of the property does not provide enough information for the appraiser to perform the appraisal, the appraiser must also inspect the interior of the property. For example, the appraiser might choose to inspect the interior of the property if he or she cannot adequately view the property improvements from the street; is unable to reconcile significant discrepancies among available data sources with respect to size, condition, or other factors about the property; identified apparent physical deficiencies or adverse property conditions during the exterior inspection; needs additional information for a property that is undergoing rehabilitation; etc.




I also use an Extraordinary Assumption that the interior is in "Average Marketable Condition" and I reserve the right to amend the value conclusion if this assumption proves to be false.

 

[Eric Bishard]

I spend just as much time on a 2055. But it is a relief to not have to measure and sketch the property. but my research and time spent viewing comps etc does not change. I inspect the outside of the property thouroughly and most of the time check to see if the homeowner is home so I can go in the backyard and I usually ask them questions about the site if I can. I get paid the same for a 2055.

 

[Linda M Lynch]

I do 2055 exteriors (when requested) if I have appraised t he property within the past year or two and if it appears unchanged when doing an exterior inspection. But I write a very explicit addendum stating how much, or how little, reliance can be placed on the report.

 

[Jim Onderisin]

Ray, the exterior assignments take a little less time than the interiors in some areas (measuring, sketching, etc), but take more time in verifying the physical characteristics and making sure a person covers their behind. My experience is that they take a little less time overall, and I'll charge about 10% less than I charge for an interior assignment.

When a client requests an exterior appraisal, that is exactly what I do. I do not set foot on the property. I don't contact the homeowner unless there is no other way to answer questions I may have, and unless I know the client won't object to it. If there isn't enough public information available to do a creditable job, I'll suggest an interior assignment. I'll always outline the assumptions to which the opinion is subject and include caveats about the reliability of the opinion.

 

[Edd Gillespie]

I completed an 1004 on a split level two weeks ago. The assessor's info, which was repeated by MLS and which the owner insisted was correct had an error that coused the GLA to be 500 sf too large. We were right. lonely but right. A 2055 would never have caught that and the value would have been 20-25K too high and all of the comps would have been incorrect. Exrtaordinary assumption or not, I'd rather be right and explain that and wrong and explain that.
How often do you find error in assessor info and Realtor info? Then why do you consider that source generally reliable?
2055 are just another way to cut costs and save time by skimping on the appraisal-that's all.