Opinion on Appraisal

[Eli]

Yep!, yep!, yep!

 

[client123]

I have an update, and it will probably be the last one for a couple of weeks. I honestly feel like this is an episode of The Twilight Zone gone horribly wrong. Anyway, we have been waiting to hear back from the lender and got news from them this afternoon. According to them, they took the letter that we wrote outlining all of the mistakes and sent it back over to the appraiser.

We were able to see his "comments" today. For the most part, he chose not to address any of our concerns. He did, however, address three items. The first one was with respect to one of the suggested comps that we sent over. He simply stated that the comps he had chosen were better than that particular comp. I am not sure in which respect since the one we sent over was in our neighborhood, has more similar GLA, was in closer proximity (not the exact same thing as being in our neighborhood), and sold more recently. However, that was the only explanation we got. He did not comment on any of the other suggested comps that in our opinion were more similar.

Second, the side yard of one of the comps sits at a busy intersection (for the locals it is N. Druid Hills) and two other comps are across the street from a freight rail line. MARTA, our "rapid" transit system, also has a line that runs next to the freight line. In the first two versions of the appraisal, he did not even note the features. In the most recent version, he stated that being across from a rail line (the house across the street literally backs up to the rail line) and being on a busy street did not affect the value of the home in his opinion. In the grand scheme of things, that is a really minor issue and not one of the issues for which we asked for an explanation.

The third comment is the one that has me scratching my head to say the least. We asked him the source of his square footage for comp 3 since it did not tie to either FMLS or the official county records. He responded that the square footage for comp 4 was correct. To back up his data, he attached a page from COMPFLO. Now for the interesting part.... while the square footage data on the COMPFLO page matches for comp 4 (please recall that this was not the square footage number in question), NONE of the other data on that page matches the market grid. Is this for real? Seriously, the lot size, county, number of fireplaces, bed/bath count, and city from the COMPFLO page do not match the market grid. I seriously do not know what he is doing or what the source of his data is. If I was not living this, I would not believe it. I hardly believe it myself.

To summarize, he refused to address every question except for one and provided answers for two questions that we did not ask. At this point, we plan to turn this appraisal as well the one that we had completed earlier this week over to the state board for review. I was hoping to avoid this, but if he chooses not to answer questions and will not provide the source of his data (or provide data that does not tie to the market grid as "proof"), we will absolutely pursue that option. I am just dumbfounded at his refusal to answer some basic questions surrounding the underlying data. The comps that he chose are just the icing on the cake.

As an aside, can someone explain COMPFLO to me? What is its data source? If you pull data from COMPFLO, are you supposed to verify against a secondary source?

 

[james stephens]

As an aside, can someone explain COMPFLO to me? What is its data source? If you pull data from COMPFLO, are you supposed to verify against a secondary source?

Sorry I have to be brief because I need to leave immediately, but the square footage he used from CompFlo could be tax record data or data turned in from an appraiser that measured the comparable property sometime in the past. Here's a link to the CompFlo web site. BTW, I don't use CompFlo.

http://www.compflo.net/

 

[Eli]

I have an update, and it will probably be the last one for a couple of weeks. I honestly feel like this is an episode of The Twilight Zone gone horribly wrong. Anyway, we have been waiting to hear back from the lender and got news from them this afternoon. According to them, they took the letter that we wrote outlining all of the mistakes and sent it back over to the appraiser.

We were able to see his "comments" today. For the most part, he chose not to address any of our concerns. He did, however, address three items. The first one was with respect to one of the suggested comps that we sent over. He simply stated that the comps he had chosen were better than that particular comp. I am not sure in which respect since the one we sent over was in our neighborhood, has more similar GLA, was in closer proximity (not the exact same thing as being in our neighborhood), and sold more recently. However, that was the only explanation we got. He did not comment on any of the other suggested comps that in our opinion were more similar.

This is odd considering the facts you have disclosed including the information you have supplied regarding other appraisals.

Second, the side yard of one of the comps sits at a busy intersection (for the locals it is N. Druid Hills) and two other comps are across the street from a freight rail line. MARTA, our "rapid" transit system, also has a line that runs next to the freight line. In the first two versions of the appraisal, he did not even note the features. In the most recent version, he stated that being across from a rail line (the house across the street literally backs up to the rail line) and being on a busy street did not affect the value of the home in his opinion. In the grand scheme of things, that is a really minor issue and not one of the issues for which we asked for an explanation.

I understand your concerns here, which demonstrate your motivations and opinions regarding potential external influences that might impact the marketability of some of the comparables. These factors should be considered in the analysis.

The third comment is the one that has me scratching my head to say the least. We asked him the source of his square footage for comp 3 since it did not tie to either FMLS or the official county records. He responded that the square footage for comp 4 was correct. To back up his data, he attached a page from COMPFLO. Now for the interesting part.... while the square footage data on the COMPFLO page matches for comp 4 (please recall that this was not the square footage number in question), NONE of the other data on that page matches the market grid. Is this for real? Seriously, the lot size, county, number of fireplaces, bed/bath count, and city from the COMPFLO page do not match the market grid. I seriously do not know what he is doing or what the source of his data is. If I was not living this, I would not believe it. I hardly believe it myself.

I am not familiar at all with compflo, but, perhaps this particular comparable should have been given less weight or maybe not even utilized if the information could not be verified or was not considered very reliable due to discrepancies. And, you already stated you thought there were more similar and recent comparables.

To summarize, he refused to address every question except for one and provided answers for two questions that we did not ask. At this point, we plan to turn this appraisal as well the one that we had completed earlier this week over to the state board for review. I was hoping to avoid this, but if he chooses not to answer questions and will not provide the source of his data (or provide data that does not tie to the market grid as "proof"), we will absolutely pursue that option. I am just dumbfounded at his refusal to answer some basic questions surrounding the underlying data. The comps that he chose are just the icing on the cake.

As an aside, can someone explain COMPFLO to me? What is its data source? If you pull data from COMPFLO, are you supposed to verify against a secondary source?

I am disappointed and surprised that another appraisal could not be or was not taken into consideration by the lender, based on the information you have provided, particularly the information regarding other recent appraisals on your home. You seem very knowledgeable to me and sincere. I wish you the best.

 

[factsandtruth]

Compflo is a reliable data source gathered from appraisers and gathered from previous appraisals on properties. Its more reliable when it comes to GLA, bedroom count, bathroom count, basement size, basement bath and room count. Appraisers actually go into these properties and gather the data. Fmls and alot of times tax records are less reliable. I just appaised a property in dekalb county, tax records stated 3000square ft GLA, I measured the property and it was 2400 GLA. The tax records combined the basement with GLA to come up with 3000square ft GLA.

 

[james stephens]

The third comment is the one that has me scratching my head to say the least. We asked him the source of his square footage for comp 3 since it did not tie to either FMLS or the official county records. He responded that the square footage for comp 4 was correct. To back up his data, he attached a page from COMPFLO. Now for the interesting part.... while the square footage data on the COMPFLO page matches for comp 4 (please recall that this was not the square footage number in question), NONE of the other data on that page matches the market grid. Is this for real? Seriously, the lot size, county, number of fireplaces, bed/bath count, and city from the COMPFLO page do not match the market grid. I seriously do not know what he is doing or what the source of his data is. If I was not living this, I would not believe it. I hardly believe it myself.

As far as not all of the data for Sale 4 not matching what is on the CompFlo page I will say that many times the appraiser will have to piece together data for a particular comp from different data sources since one particular source may not be 100% accurate (for instance DeKalb County Tax Records are notorious for reporting the incorrect lot size of a property). It could be that the appraiser only used the square footage from CompFlo and relied upon other data sources for the other physical aspects of the comp you see in the report grid. And of course, it could that this appraiser is just terribly sloppy. It should be noted that the Chairperson of the Georgia Real Estate Appraiser's Board gave CompFlo the "thumbs up" in one article he wrote for Georgia Real Estate Commission's newsletter a while back.

Feel free to PM me if you would like for me to check and see on what I can find out about the gross living are for Comp #3. While I don't subscribe to CompFlo I do subscribe to a competing service that has several thousands of records of where an appraiser reported the gross living area of a house they measured here in the Metro Atlanta area. It's a data sharing service for appraisers that helps appraisers utilize more credible information for a comparable property with respect to gross living area and basement area than what be available from the county tax assessor or a MLS listing. You asked if an appraiser needs to very the gross living area for a comp and I would say that while it is hard to verify the gross living area of a comp the appraiser does have responsibility to make sure the data that they utilize is credible.

BTW, did you consider, or have, the 2nd appraiser to take a look at the first appraisal or the comps used? Good luck moving forward.

 

[client123]

I really want to thank all of you for the advice and explanations. It has been extremely helpful as we attempt to navigate this situation.

 

[client123]

As far as not all of the data for Sale 4 not matching what is on the CompFlo page I will say that many times the appraiser will have to piece together data for a particular comp from different data sources since one particular source may not be 100% accurate (for instance DeKalb County Tax Records are notorious for reporting the incorrect lot size of a property). It could be that the appraiser only used the square footage from CompFlo and relied upon other data sources for the other physical aspects of the comp you see in the report grid. And of course, it could that this appraiser is just terribly sloppy. It should be noted that the Chairperson of the Georgia Real Estate Appraiser's Board gave CompFlo the "thumbs up" in one article he wrote for Georgia Real Estate Commission's newsletter a while back.

Feel free to PM me if you would like for me to check and see on what I can find out about the gross living are for Comp #3. While I don't subscribe to CompFlo I do subscribe to a competing service that has several thousands of records of where an appraiser reported the gross living area of a house they measured here in the Metro Atlanta area. It's a data sharing service for appraisers that helps appraisers utilize more credible information for a comparable property with respect to gross living area and basement area than what be available from the county tax assessor or a MLS listing. You asked if an appraiser needs to very the gross living area for a comp and I would say that while it is hard to verify the gross living area of a comp the appraiser does have responsibility to make sure the data that they utilize is credible.

BTW, did you consider, or have, the 2nd appraiser to take a look at the first appraisal or the comps used? Good luck moving forward.

I wanted to let you know that I sent you a PM. Thanks again.

 

[Mike Kennedy]

I am not saying this is the case, but one theory is that the appraiser does not have much room to make adjustments. Since the gross adjustment for 4 of our 5 comps is over 24%, the appraiser simply cannot just update the information. The maximum allowable gross adjustment for any comp in Georgia is 25% (State governing body.... I cannot yet share links) so the appraiser would actually have to go back and pick a new comp. Just a thought.....

GEORGIA

539-3-.02 Standards for Developing and Reporting an Appraisal
(1) In developing and reporting an appraisal of real property, an appraiser shall not:
(a) perform any appraisal assignment beyond the scope of authority granted in the appraiser classification held;
(b) fail to disclose clearly and accurately the appraiser classification and number granted to the appraiser by the state;
(c) fail to employ correctly methods and techniques that are necessary to produce a credible appraisal. Unless the appraiser expressly provides a credible real estate appraisal justification in the appraisal report, the appraiser may not vary from the following guidelines:
1. appraisers reaching a conclusion of value for a real property must:
a. Obtain all data used in every appraisal from a reliable source and verify that data from at least one additional reliable source. For purposes of this Chapter a reliable source shall be one typically utilized by appraisers in the area and includes, but is not limited to, a personal inspection by the appraiser; publicly filed records; property tax records; an
appropriate local multiple listing service; and commercially available data based and publications reasonably relied upon by appraisers in the ordinary course of their business.
An appraiser may also rely upon information obtained from real estate appraisers, brokers, closing attorneys, sellers, and buyers provided that the appraiser maintains (1) documentation of any information obtained from appraisers, brokers, closing attorneys, sellers, and buyers and (2) the name and telephone number and/or address of each source in the appraiser’s file for at least five years;
b. Obtain for the appraiser’s file the Tax Assessor’s 100% market value;
c. identify and state in the appraisal report any list prices of the property if listed within the preceding year reported by reliable sources; and
d. comment on the impact on the market value of the subject of foreclosure activity in the market area of the subject property.
2. appraisers utilizing the market approach for reaching a conclusion of value for a real property must:
a. identify and describe the market area as a geographic location;
b. select comparable properties that are the most recent sales and that reflect current market conditions for valuation of the subject property. Absent a credible real estate appraisal explanation for a different definition of most recent sales, most recent sales shall be within one year and in the market area. The most recent sales shall be presumed to be properties that have sold within the preceding year of the effective date of the
appraisal;
c. select comparable properties for valuation of a residential property that require the net total of any adjustments to the sales price of a comparable sale not to exceed 15% and the gross total of all adjustments (whether positive or negative) not to exceed 25%, absent a
credible real estate appraisal explanation for differing adjustments;

d. select comparable properties for valuation of a property that are located within the market area of the subject. Absent a credible real estate appraisal explanation for a different market area, the market area for residential properties shall be presumed to be comparable properties located first within the same subdivision as the subject and second located within one mile of the subject;

e. list in the appraisal report any sale of the subject property held within the preceding three (3) years of the appraisal’s effective date including the date of sale and sales price. In addition, comment on or explain if any sale occurred within six (6) months of a previous sale within said three (3) year period when the sales price increased more than 25% of the previous sales price; f. list in the appraisal report any sales of comparable properties used in said report held within the preceding one (1) year of the comparable properties last date of sale including the previous date of sale and sales prices. In addition, comment on or explain if any sale occurred within six (6) months of a previous sale within said one (1) year period when the sales price increased more than 25% of the previous sales price. g. state the exposure time indicated by the market.
3. appraisers utilizing the cost approach for reaching a conclusion of value for a real property must include in the appraisal report the relevant replacement cost data from a source reasonably relied upon by appraisers in the ordinary course of their business. Said source must be identified by title on the appraisal report;
4. appraisers utilizing the income approach for reaching a conclusion of value for a real property shall identify in the appraisal report the source of any income data used in the appraisal report; identify any ownership or other interest which such source has in the subject property; and maintain in the appraiser’s file for a period of five years written verification of such income data.
(d) commit a substantial error of omission or commission that significantly affects the appraisal;
(e) render appraisal services in a careless or negligent manner;
(f) communicate the appraiser’s analyses, opinions, or advice in a manner that is misleading to the client;
(g) fail to include in a report of an appraisal sufficient information to enable the person(s) who are expected to receive or rely on the report to understand it properly;
(h) perform an independent appraisal assignment with partiality or an accommodation of personal interest;
(i) accept an independent appraisal assignment when the employment itself is contingent upon the appraiser’s reporting a predetermined estimate, analysis, valuation, or opinion or where the fee to be paid is contingent upon the opinion, conclusions, analysis, or valuation reached or upon the consequences resulting from the appraisal assignment;
(j) perform any appraisal assignment without (1) disclosing any lack of knowledge and/or experience to the client before accepting the assignment; (2) taking all steps necessary to complete the assignment competently; (3) describing the lack of knowledge and/or experience and the steps taken to complete the assignment competently in the appraisal
report; and (4) having the client expressly identify any other persons or entities that the client expects to rely on the appraisal report;
(k) report the results of a real property appraisal without disclosing the nature, extent, and detail of the appraisal processes undertaken;
(l) fail to disclose clearly and accurately in the appraisal report any assumption or any limiting condition that directly affects the appraisal and to indicate its impact on value;
(m) fail to include in an appraisal report a certification that includes the following items in language substantially similar to the following:

I certify that, to the best of my knowledge and belief:
- the statements of fact contained in this report are true and correct.

etc >>>>>

http://r.search.yahoo.com/_ylt=A0LE...3/02.pdf/RK=0/RS=VgiMTnIr5u1ZPVDeDSORPcPOBh8-

 

[Terrel L. Shields]

Make a copy of the report and send it to the state appraisal board. I am confident that before a state board the appraiser will address those issues far better than he/she appears to have to this point.