Out of Option, Need Help!

[Dublin ohio]

that’s correct - and that’s the part that I do not understand. It went from being a complex residential to commercial narrative seemingly overnight, and what can I do with that? It seems the AMC just decided my fate right there, no?

Or is it plausible to have a commercial narrative done and have that narrative conclude it’s a residential property with an accessory usage?

Seems like the AMC took the word of the residential appraiser that the HBU is commercial and is now sending out a commercial appraiser. The commercial appraiser could get out there and go wtf am I doing here.

 

[Tom D]

some pretty good answers here about gov or local lenders. you do have the right to ask any appraiser, who would be coming thru, if they have expertise in what you are buying. and where are they coming from and how far away that is. local appraisers, if there are any, would be the most knowledgeable in this situation. also call, any local appraiser and ask them if they know any lenders that would be familiar with your situation.
big banks and AMC's are not very good at things they don't see that often. local little banks and credit unions might be better, or some government program.

 

[Zoe]

some pretty good answers here about gov or local lenders. you do have the right to ask any appraiser, who would be coming thru, if they have expertise in what you are buying. and where are they coming from and how far away that is. local appraisers, if there are any, would be the most knowledgeable in this situation. also call, any local appraiser and ask them if they know any lenders that would be familiar with your situation.
big banks and AMC's are not very good at things they don't see that often. local little banks and credit unions might be better, or some government program.

I am sure there is more than one lender there that specializes in properties that are similar. His lender may know an appraiser on their panel where they make the loan and keep the loan.

It is always good to shop rates, closing fees and terms with different lenders. You haven't signed any papers yet. You can get that appraisal fee back and go somewhere else if you want to.

I have a gut feeling this appraiser came up with that as an excuse to get out of doing the appraisal. $630 seems low to me on the appraisal fee for that property. That fee may have made the appraiser say no, I don't want this. This is my out. AMC probably gave it to cheapest appraiser.

And the appraiser truly may not have felt competent to perform the assignment. Which is good also even if fee had nothing to do with it.

 

[djamesgoodwin]

I am sure there is more than one lender there that specializes in properties that are similar. His lender may know an appraiser on their panel where they make the loan and keep the loan.

It is always good to shop rates and terms with different lenders. You haven't signed any papers yet. You can get that appraisal fee back and go somewhere else if you want to.

I have a gut feeling this appraiser came up with that as an excuse to get out of doing the appraisal. $630 seems low to me on the appraisal fee for that property. That fee may have made the appraiser say no, I don't want this. This is my out.

I shopped a bunch of lenders, and all said this property was no problem, albeit unique. So I chose the one that git me the best rate, and our closing date is supposed to be March 18! Ha.... obviously not happening.

 

[Zoe]

I shopped a bunch of lenders, and all said this property was no problem, albeit unique. So I chose the one that git me the best rate, and our closing date is supposed to be March 18! Ha.... obviously not happening.

Remember you mentioned an AMC. They send out orders for the fastest and cheapest and the original appraiser may not have even studied the assignment before they accepted it from the AMC. I have a feeling the original appraiser either felt incompetent or was not willing to perform the assignment for $630. H&B use was their way out.

 

[Zoe]

That kept original appraiser on good terms with AMC and bank. Next appraiser may feel very competent to perform the assignment. I doubt the fee will be $630 if they do their homework before they accept the assignment from the AMC.

Get the bank to directly engage an appraiser they know. How long has the lender been in business in your area?

 

[djamesgoodwin]

That kept original appraiser on good terms with AMC and bank. Next appraiser may feel very competent to perform the assignment. I doubt the fee will be $630 if they do their homework before they accept the assignment from the AMC.

Get the bank to directly engage an appraiser they know. How long has the lender been in business in your area?

That's something I don't know. It's TJC Mortgage out of Alabama. They specialize in bank statement mortgages like I'm using. I have reached out to a more local lender though, who does have in house appraisers and uses these products. Now that Im armed with a little more knowledge. I didn't expect this hiccup at all, before.

 

[Raven59]

One important thing to remember is that the answer to your question may depend on various factors. Experienced appraisers in this thread have provided valuable feedback regarding this matter. When I bid on a potential job, assumptions are often made about the property characteristics, only to find something unexpected once on-site, which can be frustrating. This is just the nature of the business.

As I was reading your original post, I couldn't help but notice something concerning. It's been an ongoing issue for me when a residential appraiser determines the highest and best use of a gray area residential property as commercial use, which is generally outside the scope of their licensure. I'm curious about where the appraiser got their market knowledge and expertise to make this determination. It seems odd that a determination would be made on a property the appraiser is not licensed to appraise. However, having a commercial license doesn't automatically make one more qualified than someone without it. In either case, making such a determination requires experience or the ability to gain that experience. I suspect the initial appraiser used the excuse of calling it commercial use to avoid telling their client they didn't know how to appraise it. However, it is possible they did know how to appraise it, and their determination ended up being correct.

A narrative report doesn't necessarily provide more credibility than a typical form report. Both reports require the same level of communication from the appraiser, and there is no information in the narrative that shouldn't be in the form. However, if commercial property is put on a residential-designed form, it could lead to a misleading report because of the hard print references throughout the form. Those of us who prefer narrative reports find that it gives us better control over the format and flow of communication. But it doesn't make it a better report than using a form or offering a different answer.

Please do not dismiss Terrel's opinion simply because it may differ. You are lucky to have someone with significant experience who can advise on property types like yours. Terrel has a solid foundation to help you solve the problem. However, an element of guesswork is involved since we are unfamiliar with your market. Every market has unique characteristics specific to its location and the people who make it up. We all provide advice based on limited information, which could easily change as we discover more value-related factors.

You are facing two main challenges right now. Firstly, Appraisal Management Companies (AMCs) usually prioritize the cheapest service available, which can result in hiring less skilled appraisers who may not have the necessary experience. Unfortunately, a low fee can discourage experienced appraisers from accepting the assignment. Sometimes, you do get what you pay for. The payment offered for your complex assignment is minimal and falls within the approved Veterans Administration $600 threshold for non-complex typical properties. Why would an experienced appraiser take on a challenging assignment like yours for a fee that is offered for less complicated assignments? Most of us don't have Terrel's typing skills and find the couple of days of work needed to complete your job unappealing. In this case, your issues are likely fee-related, whether you like it or not.

Secondly, determining whether a property is for commercial or residential use requires extensive market research and knowledge, and quick on-the-spot answers lack foundation and are generally not an acceptable practice, especially with complex or unusual properties. The highest and best use is the foundation for building a credible report. We don’t have the secret book of answers or a crystal ball that directs us. It takes time and commitment to do it right. If I were lucky and had data to fall back on, this is still a couple of days' job. It could easily be more if the market supports commercial use.

I don't believe that a Certified General and narrative report alone can solve your problem. The next step is to find an appraiser, whether residential or commercial, who has market knowledge. This may not fit into the selection process of the AMC and lender, but this is where you come in. It would be best to tell your client that fee shopping is not in anyone’s best interest. Instead, inform them that you want the correct answer and would be willing to offer fair compensation to obtain it. Otherwise, no answer in this thread will solve the underlying issue.

Terrel, I enrolled in Udemy's Master Typing class. I clearly need to improve my skills.

 

[Terrel L. Shields]

If you're doing Commercial narratives for $630, you are typing faster than me, for sure.

Considering the complexity of what was presented, no, I'd be higher than $630, but the report writing of my reports is not a big obstacle and basically I can write the report in the same amount of time I used to fill in a form.

Or is it plausible to have a commercial narrative done and have that narrative conclude it’s a residential property with an accessory usage?

What the appraiser chooses to call it, well, that's up to them. Yes, I would consider it 'complex' by most any definition. And, personally, since I no longer even subscribe to form software, it would necessarily be a narrative. OTOH, Narratives are not acceptable to secondary market. They cannot data mine a narrative.

So, the question for @djamesgoodwin is who and what kind of loan are you getting? If the AMC accepts a narrative, then the loan is not for FNMA or FHA. Is it an in-house loan? So what kind of interest rate? And have you checked with Farm Credit about if the property qualifies for the loan?

 

[Terrel L. Shields]

Terrel, I enrolled in Udemy's Master Typing class. I clearly need to improve my skills.

My ex was an adult business teacher. She measured me at over 100 wpm, and I probably do no more than 40 now. But I think the reason I can 'do' a report quickly is by using WordPerfect (the ex was a certified WP "expert") I actually have calculating tables within my reports, so I am not flipping back and forth between Excel and Word. My templates are 3 kinds-template, merge file, plain. One for exhibits. One for the approaches and one for the intro-summary. Within each I have variations, so if I need 12 pix, I get the 12 pix template, 6 pix, ditto. zero to 24. Same with approaches - 1, 2, 3 - which 2,