MLS Comp Photos WTF!

[Workbox]

Today I had the "pleasure" to read a report that used all MLS pictures. One of the photos looked like a single family home from the angle taken by the Realtor. It is actually an attached condo, appraiser didn't know that since he did not inspect.

Another comp was of a photo that was a proposed construction....."if you want to buy our overpriced lot we can build a house that will look like this". The parcel is vacant land....oh and by the way not one house has been built in the township THIS YEAR. The appraiser did adjust for time on this one.....m2:

Two homes were relocation homes where the owner was compensated above the selling price, one home was a land contract with owner financing, four of the homes had wrong GLA and finally one home was listed as a golf course home that was surrounded by a cornfield....the golf course is down the road.

The unadjusted sale prices were from $225,000 to $399,000; the adjusted sale prices were from $226,000 to $386,000 with an opinion of value of $271,000. The cost approach came in at $527,000.

Thank God the appraiser adjusted $1,000 for the sprinkler system, unfortunately he did not explain any adjustments or how on earth with an adjusted value range of $140,000 he came in at the precise value of $271,000 (If you take the average of the adjusted comps you will find it to be very close to the opinion of value).

This all passed the Wells Fargo "reviewers" and "quality control" people.

Our industry is in trouble if there are people like this.....and Wells Fargo is in more trouble than our industry.

You got a Doozy there TE. I think the condition of the economy is a good testament to your post. It is not only Wells Fargo with the same problem. And you got to love those sprinkler adjustments. m2::laugh:

 

[TEL2002]

Well Mr / Ms GSE person .... the REALITY is that you dont pay me enough, you havent enforced the rules ... and you dont care and neither do I (oh ... and by the way Im not only lazy but I also dont think ethics mean much either ... so there ... raspberry)

Signed

Typical Appraiser

I wonder how Typical Appraiser would feel if he went to the Doctor and the Doc said, well geez Typ, the last time you were here, your blood pressure, colesteral, blood sugar & temperature were just fine, so we can skip those steps. I think you look just fine, so I see no reason why you should have come in today. Please pay the cashier $75 on your way out.

 

[Joyce Potts]

I wonder how Typical Appraiser would feel if he went to the Doctor and the Doc said, well geez Typ, the last time you were here, your blood pressure, colesteral, blood sugar & temperature were just fine, so we can skip those steps. I think you look just fine, so I see no reason why you should have come in today. Please pay the cashier $75 on your way out.

What really bugs me is that when it comes to lenders using appraisers every rule and reg is thrown at the appraiser for every compliance imaginable. When it comes to the lender using an AVM or lesser valuation product, the rules are different even though the consequences to the consumer and the tax payer are the same. No, I'm not using that as any excuse for any appraiser to 'skip' by on what they're supposed to be doing, but the entire concept of the bigger picture never ceases to amaze me.

 

[John Hassler]

This all passed the Wells Fargo "reviewers" and "quality control" people.

That's because there is very high demand for very low competency (low cost) reports.

I see no way to compete with low-competency low-cost appraisals and the cesspool that GSE work has become.

 

[Metamorphic]

The unadjusted sale prices were from $225,000 to $399,000; the adjusted sale prices were from $226,000 to $386,000 with an opinion of value of $271,000. The cost approach came in at $527,000.

This all passed the Wells Fargo "reviewers" and "quality control" people.

What's the point of doing the sales comparison method on the comp grid if you're not going to adjust the comps to match the subject. Its surprising how few appraisers understand that that's the point of the whole exercise.

With Rels it seems like if you bullseye the AVM number the reports sail through review at a pace only a computer could manage. I'd bet no "people" were involved in the process. I really think the review process is going to be the downfall of this kind of AVM business model. When you look at the fee split they achieve, a "reasonable man" would expect them to have done more work than they do relative to what the appraiser does for their fee. That plus the deep pockets will see them sued into a different business practice.

 

[DMZwerg]

Why should an appraiser drive the comps?
Well, to quote the fictional character Dr.House "People lie". Real estate agents are advocates for as high a value as they can get without outright lying, but some obfuscation is the norm.

Mr. Evens gives a number of prime examples here I feel warrant repeating, and to add my own touch I will try to explain why and give similar cases.

One of the photos looked like a single family home from the angle taken by the Realtor. It is actually an attached condo, appraiser didn't know that since he did not inspect.

All MLS photos are suspect because most Real Estate Agents will try to depict the property in the best possible light, such as: depicting a side-by-side duplex or condo as a SF; using interior shot or stock building photo for a high-rise condo (rather than the specific unit); ignoring or concealing deferred maintenance; etc. Photos can be misleading. I can't tell the number of properties I have seen in MLS marketed simultaneously as SF & condo or Duplex & condo.

Another comp was of a photo that was a proposed construction....."if you want to buy our overpriced lot we can build a house that will look like this". The parcel is vacant land

See above but this one deserves special call out as it is typical for builder properties in general. Even if actually constructed (and much less chance of that toay) the LEAST oddity I have seen is the exact same model / layout but flipped. Sometimes extra features, such as a stone facade, are different, but sometimes the actual building is a completely different model altogether and unrecognizable except for address. Remember that a stock MLS batch is generally run off prior to construction then exact model and features added later therefore a builder MLS listing is often no way shape or form accurate in reality.

four of the homes had wrong GLA

A good residential appraiser should be able to roughly estimate GLA just by inspecting from the street (if they can see at least 3 sides) and thus know if the GLA has been doubled by including basement or such.

and finally one home was listed as a golf course home that was surrounded by a cornfield....the golf course is down the road.

Lake view, lake access, golf course view, golf course access, yada yada yada. Until the comps are acually driven the view/access is not verified. I have seen listings of "lake view" where the view is 5-8 blocks down a city street if you force your head tight against the glass and make a wish on a fairy. Another favorite is water view through a copse of trees "well, when all the leaves are gone you can see 2 sq ft of water through that small gap ...". The list goes on. Aerial photos can show distance and location fairly well but it take a human on site to determine view, degrees of view, etc, and determine appropriate adjustments for it.

I have also seen the opposite: view of industrial area, view of gravel quarry (through the dust cloud), view of city dump, etc. Again, aerial may give some indication but the exact detriment has to be seen (and often smelt) in person.


So, I think Mr. Evans made a good case with that example and my additions bring additional support to his reasoning. Good luck and goodnight!

 

[DMZwerg]

What's the point of doing the sales comparison method on the comp grid if you're not going to adjust the comps to match the subject. Its surprising how few appraisers understand that that's the point of the whole exercise.

Well, yes and no.

There is a great deal of difference between dropping a range from $174k to $160k (still well over +/- 25% of appraised value) and dropping the range to say 25% of initial range and say less than a 10% difference from the appraised value. Given only only bad comps (or piecing/pairing land & property virtually separately on rural appraisal) some additional allowance should be there, but in the case above it is ludicrous, and thus a prime example.

 

[New Orleans Guy]

John here's the deal with MLS photos and the MLS in general. If you drive by the comps and take photos you will notice (and we are both with NOMAR MLS) that the photos are just plain wrong more times than anyone would care to admit. And even when they are correct a good number look like a monkey took the photo or they are scanned from some other source. Look at MLS#808090, the agent scanned an appraisal report photo page for the front photo. I reported it but my guess is nothing will be done. Either way, I'm not going to get into the debate as to whether or not it's ethical, but try it out on the next few assignments, I think you'll surprise yourself.

Oh, and how did you like the newly minted certified admitting in USPAP class last Wednesday that he never had control of his signature?

I do try to take my comp photos but have gotten a bit laxed lately. I do know what you mean about many bad ones in the MLS, I definitly have never used crappy ones, just the ones that I know look like the subject but will be trying to take them all just to be safe. I have reported Tommy Crane a dozen times for his sketch of the subject as a front photo.

P.S. I turned to look at 3 freinds when the guy said he didn't have his own signature. They work for my old supervisor and that is how they work too. Kind of crazy huh?

 

[New Orleans Guy]

This all passed the Wells Fargo "reviewers" and "quality control" people.

Our industry is in trouble if there are people like this.....and Wells Fargo is in more trouble than our industry.

Wells will send me a "Value Reconsideration" when my value come in too low sometimes. The borrower or realtor will offer comps that they think I should use and I have to provide a detailed response to why I say no they don't. They do make me check a box to say if someone tried to influence me or not.

 

[Midwest1]

So it is pretty simple, work for what they are willing to pay, or stand your ground on your fee and sit by the fax machine all day. I need the money so I do what I have to. I work till late at night and on the weekends too but like I said, I feel fortunate to at least have the work in these times


I agree that times are tough. But if you take a typical BS fee of $175 or whatever it is they pay you and I have seen fees as low as $150....divide that by say 4 hours of work its an hourly wage of 43.75. Take off your MLS costs, E/O, flood maps, gas, wear and tear on your vehicle, phone calls etc...its probably more in line with $25-30/hr. On the surface is not a bad wage if you were working a 40 hour work week.. But what about the liability? when you get sued by some dumb as$ lender or borrower and have to defend yourself even if you have done nothing wrong?

With all due respect, my point is you might be best served at a regular 9-5 job with benefits and no liability. As long as your willing to work for their measly fees they will continue to pay them. Eventually the times will turn when enough of the folks willing to work for 1/2 of normal fees are pushed out of the market. They will realize they can't make a living and cover their expenses and the AMCs will have no choice but to pay real fees for real work. Illinois license renewals dropped by almost 40% this past renewal ending 9/31. Once the oversupply of minimum wage appraisers diminished the AMCs will have to rewrite their business model. In the meantime I am going to keep sticking to my guns and only accept full fees for full appraisals.