New assignment for a property just did 4 months ago

[David S]

I did an full 1004 purcahse appraisal for the a house in late May. Now the mortgage rate dropped, the new owner want to do the refi. from same lender. Some interest points to share:

1. Some work files still can re-use, right? Like sketch (assume new owner didn't do any expansion / add-on) 1004 page #1, aerial map. etc.
2. Due to sales volume is very low. Previous report's Comp # 1 and # 2 still can reuse it, right? Like become comp #4 or #5 as long as they are sold within last 6 months.
3. Add 3 more new comps. Reconciliation shows price is about 1%~2% down from previous report. That won't trig lender's market downturn concern, right? Obviously, May is seasonal high. We are in Fall season, 1%~2% price / value drop is very normal. 1004MC also show that.
4. All the grid adjustment formula shall not change, right? Like previous report say $250 / sq ft adjustment for GLA and $20 / sq ft for the lot. This time shall keep the same. Otherwise, lender will ask how this change so quick after 4 months?
5. But I can span out the comp area, like 1 more mile far away in order to get most recent sold 2 or 3 comps?
6. Disclose Perform the service within past 3 years. Disclose the May sale to the grid page's bottom table.
7. How to handle Cost Approach section?
Any other though(s)?

 

[sputnam]

1- You can certainly make copies of information that is still relevant and put it into the new workfile. You can also reference the old file in the new workfile. That can be problematic if you dispose of the old workfile before 5 years has passed for the new one.

2- Any comparables that are still comparable can be used again and again and again.

3- If the market has changed, it changed. That isn't under your control. One of the most annoying things Realtors and Lenders and Borrowers say is 'the appraiser gave it a value of.....' We don't give values. We research and analyze and opine what the value is as of a particular date.

4- Maybe. Maybe not. Adjustments are supposed to be derived from the market. If the market has changed, the adjustments may have changed too.

5- Why? Sounds like you are trying to hit a number rather than trying to find that number.

6- Of course. You have to disclose any and all previous services pertaining to the subject property within three years of the new assignment date per USPAP.

7- What do you mean? You do what you always are supposed to do. You consider all three approaches to value. If any are not applicable or are not necessary to credible assignment results, you can omit one or more per USPAP.

If in doubt about any part of the new assignment. Treat it like a new assignment. Do all the work from scratch. DO NOT let your previous opinion of value incfuence the new opinion of value.

 

[J Grant]

For some reason, some of my hardest assignments are properties I recently appraised for purchase and now am going back on a refinance. If the comps change and they often do, even if we include som of the old comps, the value on a new appraisal can change and it may or may not reflect changing market conditions. Homeowners think their home should have gone up regardless and are going to be disappointed if the value is lower, even if by a small amount, but the new appraisal is what it is.

 

[Terrel L. Shields]

Homeowners think their home should have gone up regardless

Exactly...yep, re-vals are a PITA.

 

[David S]

1- You can certainly make copies of information that is still relevant and put it into the new workfile. You can also reference the old file in the new workfile. That can be problematic if you dispose of the old workfile before 5 years has passed for the new one.

2- Any comparables that are still comparable can be used again and again and again.

3- If the market has changed, it changed. That isn't under your control. One of the most annoying things Realtors and Lenders and Borrowers say is 'the appraiser gave it a value of.....' We don't give values. We research and analyze and opine what the value is as of a particular date.

4- Maybe. Maybe not. Adjustments are supposed to be derived from the market. If the market has changed, the adjustments may have changed too.

5- Why? Sounds like you are trying to hit a number rather than trying to find that number.

6- Of course. You have to disclose any and all previous services pertaining to the subject property within three years of the new assignment date per USPAP.

7- What do you mean? You do what you always are supposed to do. You consider all three approaches to value. If any are no applicable or are not necessary to credible assignment results, you can omit one or more per USPAP.

If in doubt about any part of the new assignment. Treat it like a new assignment. Do all the work from scratch. DO NOT let your previous opinion of value incfuence the new opinion of value.

Thanks!

For the Cost Approach, GLA and garage sq ft didn't change. Cost $ / sq ft shall not change, right? So the improvement value remain the same as previous report. If the value dropped 1%~2%, just reduce site value 1%~2%?

 

[Dublin ohio]

Cost $ / sq ft shall not change, right?

Depends on the update cycle of your cost service. Some update their costs monthly, some quarterly or annually.

 

[JTip]

Clone old report (your software should have this option).

New inspection, new folder, new photos.

New effective date.

New comps. (could use old comps if they are within 12 mo close date IF they are still comparable (ie major rehab, whatever))

NEW PHOTOS of comps (just do it) for the old comps used

DISCLOSE prior services

Cost approach, see above post.

I have a client that I do the same house(s) 4-6 times a year. This is exactly what I do.

 

[J Grant]

Thanks!

For the Cost Approach, GLA and garage sq ft didn't change. Cost $ / sq ft shall not change, right? So the improvement value remain the same as previous report. If the value dropped 1%~2%, just reduce site value 1%~2%?

i would not adjust site value to match such a tiny percentage.

 

[David S]

I have a client that I do the same house(s) 4-6 times a year. This is exactly what I do.

What about value? All 4-6 times are the same or report even a couple of % fluctuation? Thanks!

 

[David S]

i would not adjust site value to match such a tiny percentage.

Then, in cost approach, how do you change that 1% or 2% change? You couldn't increase cost $ / sq ft by 1 or 2 dollars, right? Unless you really have the contractor quote? Another option will be drop off on site improvement portion? Thanks!