Landsafe Condo GLA requirement?

[AJL118]

Measuring Condos - Extra Time On Your Hands?

Qualifications: I have been in the real estate business for about 40 years - virtually every facet of it including brokering financing for 150 +- apartment project loans, private mortgage insurance, mortgage brokerage, real estate sales, investment, running an appraisal firm administratively. Had money, went broke, had money, went broke, went broke, went broke. I think I know my sh$t, although some may disagree.

Scenario: Office receives an appraiser order for a condo in "Whispering Glen". Initial research says 1,150 SF in public records. Condo docs say it is a 2/2 and a "Baywood" model. Checked sales. Sales say 5 Baywood models re-sold within last 90 days (all say 1,150 SF). Anal appraiser measures the Subject and come up with 980 SF. Ooops! Off by 70 SF. What to do? Don't tell me you are going to make adjustments......... What are you going to do on the 1073? You are short by 70 SF compared to your comps, but they are the same thing! Are you going to say by addendum that although public records say 1,150 SF, you are right with your 980 SF and public records are wrong including the comps?
How do you know if you are right and public records are wrong? Did you read the condo docs? What is "owned" by the condo owner? Paint to paint? Stud to stud? Beyond stud to stud? See where I am going?

IMO, this whole argument is without merit. Landsafe is FOS. When I was in the business (until there were no paychecks 3 months ago), we did thousands of condo appraisals and never once got dinged for not measuring a condo. Caveat: If no public records were available, we measured. I guess if it is a "feel good" exercise, do it, but it doesn't mean squat and only creates questions - not answers them. That is, if you don't have any public records to go with. If not, you have my sympathy.

 

[Don Clark]

What Fannie Mae means "By Plat" is a unit sketch from condo docs with interior wall measurements and GLA total.

Since there are at least 20 different versions of a condominium, and many owners own not only the exterior wall but other amenities, how would this apply? It applies only to a high rise condominium where the unit owner does not own what is in the walls, floor or ceiling. There are at least 19 other style of condominium wonership where that is not true. A condo is a form of OWNERSHIP, not an ARCHETUCTURAL style. You, and Fannie Mae are describing only one version of a condo with one specific archetectural style. You should have measured the unit, in any and all cases. I would probably send a copy of your report if you refused to go back and measure the unit.

 

[timd354]

This is just another example of a reviewer inventing a guideline that does not exists to match the reviewer's subjective opinion of what should be in the guidelines. I personally measure all of the condo units that I appraise, but Fannie is the user of literally millions of appraisal reports of condominium units each and every year and if Fannie is fine with a SOW where the appraiser is not required to measure the interior of the unit, but, instead, may provide a copy of the condominium plat footage and use the GLA from that plat, then who is the reviewer to say that is not an acceptable practice under the Fannie guidelines and a typical Fannie Scope of Work. Any reviewer who was to state, in a review of an appraisal done under a typical Fannie SOW, that an interior sketch is required and was to deem the appraisal report unacceptable on that basis, has committed a USPAP violation in my view since he has let his personal bias have an effect on the outcome of the review.

 

[CANative]

(all say 1,150 SF). Anal appraiser measures the Subject and come up with 980 SF. Ooops! Off by 70 SF.

*170 sf.

I would probably send a copy of your report if you refused to go back and measure the unit.

Send it where? And for what? Because some stupid $150 LandSafe review appraiser exceeded his authority?

There is no good consensus of what GLA means in a condo. If a project has 3 models (1/1's at about 900 sf, 2/1's at about 1,100 sf, and 3/2's at 1,250 sf) then use the model types similar to the subject as comps and disregard GLA as an adjustable feature.

The point here is that the discussion of what the OP should have or should not have done is irrelevant. The reviewer should have proceeded with the assignment. Use an EA that GLA is correct, state that he doesn't find the GLA issue credible and discredit the report giving no opinion of value, withdrawn from the assignment, or request a change in the reviewers scope of work to include an interior measurement. Whatever.

 

[Reelestate]

This is just another example of a reviewer inventing a guideline that does not exists to match the reviewer's subjective opinion of what should be in the guidelines. I personally measure all of the condo units that I appraise, but Fannie is the user of literally millions of appraisal reports of condominium units each and every year and if Fannie is fine with a SOW where the appraiser is not required to measure the interior of the unit, but, instead, may provide a copy of the condominium plat footage and use the GLA from that plat, then who is the reviewer to say that is not an acceptable practice under the Fannie guidelines and a typical Fannie Scope of Work. Any reviewer who was to state, in a review of an appraisal done under a typical Fannie SOW, that an interior sketch is required and was to deem the appraisal report unacceptable on that basis, has committed a USPAP violation in my view since he has let his personal bias have an effect on the outcome of the review.

If you read what the Landsafe reviewer said in my first post:

"Looking at the most recent submitted report, it appears that the appraiser has still not measured the subject. As stated in my previous emails, this simply is not acceptable. If you could find out whether or not the appraiser is going to measure the subject, we can then move forward with completing this review assignment."

He has no right to state that my report "Simply is not acceptable" as a part of his "review assignment", he can request an upgrade to a field review and inspect himself.

 

[AJL118]

*170 sf.

Thanks, Greg. As you can see, I am not a seasoned appraiser.

Tony

 

[timd354]

If you read what the Landsafe reviewer said in my first post:

"Looking at the most recent submitted report, it appears that the appraiser has still not measured the subject. As stated in my previous emails, this simply is not acceptable. If you could find out whether or not the appraiser is going to measure the subject, we can then move forward with completing this review assignment."

He has no right to state that my report "Simply is not acceptable" as a part of his "review assignment", he can request an upgrade to a field review and inspect himself.

I agree with you...I would tell everyone involved that I have completed my assignment and I am not changing my report and it is not my problem, nor do I care if the reviewer decides not complete the review assignment.

However, my post was not meant to be directed to your first post, but was directed at the numerous other posts on this thread that indicate that some of the posters on this thread apparently would be more than willing to just make up additonal so-called guidelines to fit what they believe that the actual guidelines should be. What is really bothersome is that some these posters would then use these made up guidelines (which are not real guidelines, but exist only in their minds) and use these made up guidelines to try to hang the original appraiser for not conforming to the made up guidelines. I guess one could call it reviewing using ex post factoguidelines.

 

[Mztk1]

If you read what the Landsafe reviewer said in my first post:

"Looking at the most recent submitted report, it appears that the appraiser has still not measured the subject. As stated in my previous emails, this simply is not acceptable. If you could find out whether or not the appraiser is going to measure the subject, we can then move forward with completing this review assignment."

He has no right to state that my report "Simply is not acceptable" as a part of his "review assignment", he can request an upgrade to a field review and inspect himself.

Basically, the review appraiser is looking to make sure the appraisal is acceptable to CW standards. What he means to say is "This simply is not acceptable [for Countrywide]", but he is not saying it is unacceptable appraisal practice in general. Basically he is telling your broker that if you measure the interior your report will be accepted. But, he is also saying, if you don't it will not be accepted for financing with CW and either the broker will have to find a different lender or have another appraiser (through LandSafe preferrably) do a new report.

Reviewing it as a quality review he doesn't have the right to ask you for the sketch, but reviewing it for the lender to ensure it meets the lender's guidelines before funding, he can ask and hopefully get the interior measurements completed just as an underwriter can, or reject the report.

LandSafe, for CW, has started to review all of the reports from the wholesale side with a fine tooth comb because they lost a lot of money on that end during their current crisis. If CW asks LandSafe to have reviewers look at all wholesale side appraisals to make sure they meet CW guidelines, and if they ask to get the appraisals up to lender guidelines or reject them, then absolutely that review appraiser can do that and request what he is requesting. He has no basis whatsoever, however, to turn the report into the state or anyone else for non-compliance because it complies quite well with the original scope of work and USPAP. CW and their subsidiaries have a right to require appraisals they accept for their finance programs completed to their requirements or reject them.

It all comes down to how much you care about your mortgage broker's business. If it is a good client, then go the extra mile so they get the loan with their preferred lender. Charge them if you need, otherwise, or forget it and don't do a thing.

 

[Reelestate]

Basically, the review appraiser is looking to make sure the appraisal is acceptable to CW standards. What he means to say is "This simply is not acceptable [for Countrywide]", but he is not saying it is unacceptable appraisal practice in general. Basically he is telling your broker that if you measure the interior your report will be accepted. But, he is also saying, if you don't it will not be accepted for financing with CW and either the broker will have to find a different lender or have another appraiser (through LandSafe preferrably) do a new report.

Reviewing it as a quality review he doesn't have the right to ask you for the sketch, but reviewing it for the lender to ensure it meets the lender's guidelines before funding, he can ask and hopefully get the interior measurements completed just as an underwriter can, or reject the report.

LandSafe, for CW, has started to review all of the reports from the wholesale side with a fine tooth comb because they lost a lot of money on that end during their current crisis. If CW asks LandSafe to have reviewers look at all wholesale side appraisals to make sure they meet CW guidelines, and if they ask to get the appraisals up to lender guidelines or reject them, then absolutely that review appraiser can do that and request what he is requesting. He has no basis whatsoever, however, to turn the report into the state or anyone else for non-compliance because it complies quite well with the original scope of work and USPAP. CW and their subsidiaries have a right to require appraisals they accept for their finance programs completed to their requirements or reject them.

It all comes down to how much you care about your mortgage broker's business. If it is a good client, then go the extra mile so they get the loan with their preferred lender. Charge them if you need, otherwise, or forget it and don't do a thing.

I just want the mortgage broker to understand that my report is "acceptable", it just doesn't adhere to Countrywide's personal criteria. He should have told the mortgage broker that Landsafe and Countrywide have "extra" requirements and the appraisal under review, although complete and accurate, is not acceptable because it does not meet "their" stricter guidelines.

 

[AJL118]

To Jim Klos

Quote: It all comes down to how much you care about your mortgage broker's business. If it is a good client, then go the extra mile so they get the loan with their preferred lender. Charge them if you need, otherwise, or forget it and don't do a thing.

Jim, it goes back to the age old argument about scope of work. The mortgage broker is shopping the deal and hasn't a clue about appraisal requirements of his funding source because he doesn't know who it is at the time. In the interim, we have delivered an appraisal to him that meets FNMA requirements (according to our interpretation AND because he again has no clue). Then here come the stips supposedly from the end lender via the broker. We re-visit the report that we have already furnished thereby starting the clock running again, and the time invested by us in the report increases by 40%. For the same fee because you can bet your first born that you will never collect additional. By re-opening the report and investing the additional time, how much different is that than dealing with a cut-rate AMC? I don't see much.

Value a relationship with a mortgage broker? How much do you think he/she values the relationship?"