Occupancy Determination (CHECK BOX)

[CANative]

Owner occupied*

*The appraiser noted a short term tenant was occupying the residence on the date of inspection. Like many Ocean Front homes, it is rented for 1 or 2 months in the Summer. The tenant is TAW, agreed to be there for 3 more weeks.

 

[incognito]

I would mark BOTH owner and tenant occupied boxes with an asterisk.

Fair enough Webbed. I agree with that...

But this brings up the question of whether this is really OUR responsibility as appraisers or not. This is why I like my approach: Use public records data to determine tax bill address and presence of homestead exemption, and LET THE LENDER MAKE THE DECISION. And here is how I will demonstrate the worth of my approach:

What if the tenants were at the grocery store at the time of the inspection. Then the OP would have had NO IDEA who the occupants were, and may have concluded it was owner occupied, simply because it was occupied. My approach, when there is a question, proves some due diligence on my part, yet makes no definitive determination (especially with the "both asterisks checked" suggestion you had, Mr. Web!).

 

[Webbed Feet]

You raise some very good points, as usual, Webbed

The question is, Does owner occupancy a "today it is or isn't" situation, as you suggest, or what is it overall throughout the year. I tend to go with that the overall view of majority of the time it is owner occupied, therefore checking owner occupied, but include stating that today it isn't owner occupied. The tenant confirmed that it was very short term.

Ok, I'll work on you a bit more, and with Brother Folken's most recent post (Thank You Brother Folken) for an aid we'll get this going in the right direction.

Under your logic, then again, you should mark all your 2-4 family properties to be owner occupied due to month to month tenancies. Afterall, those are technically "short term" also.

Consider what we are playing with here. This borrower/owner, most assuredly, marked the lending application as owner occupied, maybe even under the instructions of a loan officer to do so. We move to the last few years of FBI investigated prosecution of loan officers, property owners, and yes... appraisers on this matter.

"- Falsifications on Loan Applications "

http://www.hg.org/article.asp?id=4996

http://www.statelibrary.sc.gov/scedocs/C7665/000475.pdf

"misrepresenting investment property as owner-occupied property, ... Also in this report, the FBI indicated South Carolina is one .... and false credit reports to obtain a mortgage loan in the straw buyer's name. ..... such activity is illegal, and can result in federal prosecution for a knowing ..."

Ok then Brother ResGuy..... imagine yourself telling an FBI agent how one lone tenant told you it was "short term' so that is why you knowingly misrepresented the occupancy status other than what you knew it to be on the day of your inspection.......

I think we are confusing a Fannie publication with marking owner occupied if occupied by an immediate relative with if occupied "short term" by a unrelated tenant. Then failing to appreciate we just used a EA that the property owner is not renting to "short term" tenants all the time.

P.S. Plus, in your innocent belief it was all ok, it is right in your work file that you first reported it as tenant occupied and then you changed it upon request.

 

[CANative]

Owner occupied*

*The appraiser noted a short term tenant was occupying the residence on the date of inspection. Like many Ocean Front homes, it is rented for 1 or 2 months in the Summer. The tenant is TAW, agreed to be there for 3 more weeks.

We're not detectives and the issue of occupancy is the client's concern. We just report what we observe.

 

[Mr Rex]

We're not detectives and the issue of occupancy is the client's concern. We just report what we observe.

and you observed a tenant.

 

[CANative]

So what? It's a case of transient occupancy. It's silly to describe the property as tenant occupied under these circumstances. Like the OP stated (and I have observed) it's very common to rent out an oceanfront vacation home for short periods of time. Along the NorCal coast it is so common that to not do so would be bizarre or only for the very wealthy.

This thread really illustrates the shortcomings of having to deal with check boxes.

 

[Mr Rex]

So what? It's a case of transient occupancy. It's silly to describe the property as tenant occupied under these circumstances. Like the OP stated (and I have observed) it's very common to rent out an oceanfront vacation home for short periods of time.

So what? It's silly (actually misleading) to mark owner occupant when its tenant occupied on the effective date of the appraisal.

 

[CANative]

It's only misleading if the client is misled. Describe and explain when necessary.

Do vacation renters get their mailing address changed for the short period of time? Do the utilities get transferred into their names? Do they get their phone numbers listed at that address?

 

[The Dog]

It is pretty basic. You have a tenant, it is tenant occupied. I don't care if it is for a day or a month. Tenant is tenant and not occupied.

Btw, don't know about the laws in your state, but in my state if a tenant decides to stay and stop paying rent, it can take up to a year and a half to evict. They have full control during that time as long as they know the process and how to play it.

Also, you will find out that the reason they want owner occupied is because of the better terms for the loan. Should not be the appraiser problem.

Report what you saw, let the UW and the Homeowner sort it out.

 

[residentialguy]

Don't pick on me, Webbed...I'm sensitive. I'm not the debating type.