Lender Requests? (Telling Me How to do My Job!)

[Michigan CG]

......but I suggest that at any given point in time you will have to spend much more time at the computer to support your opinion than you would for the two story dwelling and therefore it is complex compared to the normal assignment.

I will spend two-three weeks in front of my computer appraising a $30M shopping mall. I will spend five days in front of my computer appraising a small $200K mom and pop commercial property. The mom and pop property is harder to do and in my opinion more complex.

Food for thought.

 

[Rufus]

I will spend two-three weeks in front of my computer appraising a $30M shopping mall. I will spend five days in front of my computer appraising a small $200K mom and pop commercial property. The mom and pop property is harder to do and in my opinion more complex.

Food for thought.

I'd eat that food, but I'm not licensed to do so. Could you provide examples that relate to residential so I can get a better grasp of what you are saying? I realize you gave a prior example of river front and historical properites. Those I would consider difficult, for me, but not complex.

 

[Kevin A. Spellman]

A loan broker from California sent this email to me for a property here in Massachusetts.

1) 1 recent satisfactory similar closed sale comp that sold for more
then the subject property with a similar or larger dwelling size.
2) Provide 1 additional recent listing that is similar in dwelling size
which supports value - must be dated within 90 days.
3) Address the impact on the value and marketability with the subject
property being greater then the predominant value.
4) Expand listing and closes sales to $350,000.
5) Provide the basement square footage for the subject and comps.

I asked for the person name and phone number. She would not provide the name or phone number of the reviewer. Shed mention MAGIC as the review company.

The report I submitted has six closed sales, one listing on the street and a pending sale for $345,000, eight properties are in the sales grid. The highest sale price in the report is $345,000 and sold 34 days ago. My value is $350,000 for a refinance assignment.

The one difference is the subject’s 600 square foot room above the attached garage for a Raised Ranch style home. No sale in the report has a 600 sf room above the attached garage.

I chose not to provide the data requested.

My response to the loan broker:

“Please remove me from your list”.

 

[jay trotta]

Are we not back to basic's here ?

No we don't wake up every morning to a new world, but we most certainly wake up to an ever changing world of different Rules. If you choose to enter the day with No new insight, you may as well go back to bed.

The challange for Appraising is to do your job- we are at that stage of the process; Lenders can send over all they want, You need to follow our basic requirements, search your comparable product, provide the explanation necessary for changes & challenges and Not allow UW's to "BIAS" your Opinion.
When they challange your work from beyond your home State, they have No concept of what your market is doing; it is Not one (many) requirement for all jobs. We are to follow "Guidelines", but in reality who knows your market best ??

If you do Not go to the property and confirm an Interior/Exterior visual observation, you have no idea of what you need as a comparable (back to basics). Beyond this, you are truly guessing at what you need, by what you have been lead to believe (over the past few years) as comparables, with No question's asked. Yes, an explanation is required before you ship the product as to why you choose the comps. you did. Do your job and you will recieve less requests for additional data.

PS: Ifn you provide 6-8 comps. you have already noted that your selection had questions to begin with. Also, you can exceed FNMA parameters with explanations!

 

[Lee Lansford]

...
Any ideas and help would be appreciated...

In those instances when your report of the appraisal can not comply with the guidelines, do specifically acknowledge the guidelines and, further, report your efforts to comply. In such a situation, you may want to include an additional "comp" (#4? #5?) that most reasonably (however imperfectly) meets their guidelines (the weighting that it is accorded is up to you).

 

[CANative]

A complex assignment is one that you have never been exposed to that kind of property type and one that is atypical for you and your practice.

A dairy farm in Wisconsin is not complex to most CG appraisers in Wisconsin. A dairy farm in Missouri is most likely complex to most anyone.

A waterfront property is not complex for a Long Island, NY appraiser, but most likely complex for appraisers in West Virginia.

Corn fields are easy for Iowa appraisers, wine vineyards are easy for some California appraisers, but not vice-versa.

I personally think that shopping malls are not complex, however small acreages with multiple outbuildings with special uses are very complex.

Complex is in the eye of the appraiser in many cases.

I usually don't disagree with you but I'm pretty sure your advise/viewpoint is incorrect. Complex/Non-complex goes to the allowable scope of practice for an appraiser's license status and is determined by the characteristics of the property and the market in which it's located. An appraiser at the licensed level may have learned how to appraise Frankentrailers on 200 acres from his supervisor and can now do them in his sleep. But if the market is for site built customs on 5 acres and there are no comps for a Frankentrailer on large lots, the assignment is complex and the licensed appraiser would be practicing beyond the scope of licensure. In other words, not competenent by defualt.

 

[ghrousseau]

Maybe i am missing something here but I feel like we are being railroaded here over and over again. Maybe its me. Please help.

I received from a client the new request from a lender they use that all appraisals they receive for new loan requests will require an appraisal where the appraiser provides only comps within the last 90 days, urban location no more than 1/2 mile away, suburban no more than 1 mile, and rural no more than 5 miles, at least 2 of the sales MUST be verified in MLS as a qualified arms length transaction sale, and at least 1 current listing or pending sale in the appraisal.

This is in Florida a
where they consider all of Florida a declining market. I know they are trying to protect themselves as there are a lot of shady appraisers doing very shady work which leaves basically no public trust in appraisers anymore. At what point do they restrict us from doing our job and providing an accurate and fair market value since we basically are limited to only a few sales. In this case i think that in many cases we cannot provide an accurate value with these restrictions. I am thinking that i would rather not do business with this company as i know the appraisals will be incorrect and i will not do it as i am sure they will find someone to do it.

Any ideas and help would be appreciated. Please let me know if this is something common for other areas and if so how is this being approached with the lender that is hendering us from doing our job right?

I work for a lender and we work with all of the major investors. Most of the major investors are currently running some form of an AVM. Chase, Wells, and CW have their own version. Depending on who your client is, they are just trying to avoid review issues and the requirement to order a second appraisal, a desk review, or a field review. Your market and your particular assignment is what it is, but you should gear your addendum and comments accordingly. As you all know, AVM's really can't operate under the parameters you just laid out. It appears to me that investors and lenders are looking to have the appraisal match the parameters of the AVM and not the other way around. Also, with the outsourcing of the appraisal function at so many of the larger lenders and investors, there is a lack of qualified people on the underwriting side who can make reasonable conclusions about the report and determine the validity of an appraisal that doesn't fall within the "normal" box of 1 mile and 90 days. As such, when they come up against issues and decisions like these regarding the appraisal, they end up going to the outsource vender to have the final say on the value. Given the tremendous changes in underwriting and credit guidelines, the only area that is still subjective is the appraisal report. I think that this will continue for some time.

 

[Couch Potato]

I will spend two-three weeks in front of my computer appraising a $30M shopping mall. I will spend five days in front of my computer appraising a small $200K mom and pop commercial property. The mom and pop property is harder to do and in my opinion more complex.

Food for thought.

Complexity is a complex issue. :new_all_coholic:


I am currently finishing up an appraisal of a site built, rectangular wood frame house of about 1000 square feet on regular shaped lot of about 17,000 square feet. The only appraisal I've done which was more difficult was a historic property down in Eustis, FL. Location and available data are the keys to complexity IMHO.

 

[EVAUSA]

The report I submitted has six closed sales, one listing on the street and a pending sale for $345,000, eight properties are in the sales grid. The highest sale price in the report is $345,000 and sold 34 days ago. My value is $350,000 for a refinance assignment.

The one difference is the subject’s 600 square foot room above the attached garage for a Raised Ranch style home. No sale in the report has a 600 sf room above the attached garage.

Can you find any sales with a similar amenity? like a built in spa, workshop, guest unit, ANYTHING so you can BRACKET you value by sales prices and avoid across the board adjustments? I've been in your situation, but I hate seeing a report where the value is not bracketed, especially when were only talking $5K. I'd think there is a sale out there at $350K to support value.

 

[Kevin A. Spellman]

Miss USA

The subject is in an old mill city where most homes are two story older colonials. The subject is located in a young subdivision as are the indicators of value. There are sales above $350,000 with compatible GLA, but architecturally they are incompatible and would look superior to the subject’s home.

The price I assigned to the subject’s room over the garage is in theory $8.33 per square foot. This is what the décor for the room could cost. I’m not a bracket appraiser, I use reliable indicators of value and if the pricing create a bracket so be it.

I will not tolerate requests when I have submitted eight properties already. The request for additional data was an insult to my service. They found no errors in the report, but I did when I re-read the report again to confirm my conclusions. They are not reading the report. They are looking for their minimum requirements no matter where the appraisal is done in America. The reviewers are asking for the data they believe they need to satisfy a favorable cause for the loan.