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NEW 3 YEAR RULE?

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Ron Schwartz

Junior Member
Joined
Dec 11, 2002
Professional Status
Certified Residential Appraiser
State
Florida
COULD SOMEBODY TELL ME ABOUT THE NEW THREE YEAR PREVIOUS TRANSACTIONS RULE WHICH WILL START IN JANUARY OF 2003. IVE READ BITS AND PIECES IN SEVERAL APPRAISER MAGAZINES. IS THIS JUST FOR FANNIE MAE FORMS OR ALL URAR FORMS AS WELL. WHERE DID THIS COME FROM AND SOMEONE PLEASE EXPLAIN WHAT THEY WANT????
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
The same thing that we've been doing for a 1 year history, but now it's a 3 year history. It's under the 2003 USPAP regulations.

Roger
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
Ron,

The form doesnt matter. It is for all appraisals. See the USPAP 2003 link in the general forum.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
See Standard 1-5 and Advisory Opinion 1 in the 2003 USPAP, which is now online.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Some think that forms will be changed to show wording for the "3-year" history. Perhaps the changes have been made, as well as a few other reasonable tweaks to make our forms "fit the times". I know the form presently speaks of 12-month sale history and have seen too many reports with the cloned line entry of "None" or "No sales in 12 months". How boring. I have violated that ever since I started. My availability to the data in my market has almost always (98% of the time) allowed me to give the LAST TIME that property changed hands. If the property sold 14 months ago, I put that in the form field. I'm already there seeing the history in the database, so I'll give history, even if the form has cut that "need" off at 12 months. Sold 4 and 1/2 years ago ?, here's that info. Some might rationalize that extra time is needed to seek that data and time can be rare for us. I have always seen it as an expression of due diligence, and market study, and would have always wanted to believe that clients want that too. Maybe, maybe, some day, I can find a client who wants evidence of thorough research, above and beyond those weak and cloned fields and same repeat comments used in the last 17 reports one completed. When clients see those same-old same-old reports, they can sincerely begin to wonder if anybody actually DOES any research, and unfortunately we all start to get that same label !
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Ross:

Like you I report the last verifiable sale available to me regardless of when it occurred. There are exactly two other appraisers in my area of whom I am aware emulate this procedue. Amazing that so few of us do this :evil:

Sometimes we ARE our own worst enemies :evil:
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri

Jason Cowan

Sophomore Member
Joined
Dec 12, 2002
Professional Status
Licensed Appraiser
State
Virginia
Does the new three year sales history apply to just the subject, or to comps as well?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Whether it's the minimum standards of USPAP or the supplemental standards that are added by Fannie, Freddie, FHA, VA or whoever....

The best thing you can do is a 3 year COMPLETE history, including ALL sales and MLS information, for the subject and all comps. That way, you are covered.

It's what I'm already doing now, ocassionally did before if I though it made sense, and will do every time from now on. Just my opinion of how to handle what is questionable. Besides, it's too hard to try to keep track of who must have it, whether it's legally mandatory or not, etc.
 
Joined
Jan 17, 2002
Professional Status
Retired Appraiser
State
Oregon
The 3 year requirement appears to have arisen from commercial appraisal practice where a 3 year (sometimes 5 year) summary is the usual thing. . .plus very belated lender and loan insurer concerns about flipping.
Appraisers research data sources "in the normal course of business" and in non or limited disclosure states or counties this presents a problem.

Personally, I am going to cover these items by: 1) using MLS address search to get a sale or marketing history for the subject and each comp I actually include in the report and 2) using the local county property sale or account activity database to make a second search of the four or more reported property addresses as a backup, in case one databank or the other misses something. Takes maybe 5 to 10 minutes and you can either print it out or just make notes on the MLS page you printed out for comp use.
Also, I usually try to ask the owner on site or in the contact phone call "when they moved in" and what improvements have been made since that date (making a separate note area on my note page for these, since this info makes good, quickly written commentary the lender might want to read).

IMHO, I can't see the state appraisal boards hanging an appraiser on these minor reporting items UNLESS the property in question is a flip OR
the comps are flips leading to a unrealistic value conclusion AND somebody's pocketbook gets hurt as a result.

"Nuf for now. Enjoy this strong market while you can, put $$$ in the piggy bank, 5.25% rates can't and won't last forever.

Craig in Oregon
 
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