• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Owner occupancy?

Status
Not open for further replies.

John Oesterle CA

Thread Starter
Sophomore Member
Joined
Jul 17, 2002
Professional Status
Certified Residential Appraiser
State
California
Respond only if you have had lender feedback or are very familiar with this occupancy issue. : )
Owner states they live at the property, a SFR & guest quarters.
Owner meets appraiser in front of property and waits in front while appraiser does inspection.
Numerous other people who don't seem related (judgement call) occupy the property.
There are nine cars onsite.
The owner prepares to leave the property when the appraiser is done.
Curious appraiser looks in public record & finds owner has PO Box at subject zip code and owns another property across town with tax billing address at cross town address. In this county if tax billing address & property address are the same that is a good indicator of occupancy.
What do you say about occupancy in the report or in memo to lender ?
(I know what I am going to say but am interested in how others see this. Thanks!)
 

JENIFFERW

Member
Joined
Nov 26, 2007
Professional Status
Licensed Appraiser
State
California
You're not a cop, you're an appraiser. I can say this because, I used to be a cop, and now I am an appraiser:) As an appraiser, my opinion is that it is beyond your scope of work to INVESTIGATE occupancy. If they tell you it's tenant occupied, then you may have some responsibility, but otherwise, you are just assuming, which appraisers are not supposed to do. The underwriting guidelines are likely set up to investigate occupancy issues. Burden is not yours, IMHO.
 

John Oesterle CA

Thread Starter
Sophomore Member
Joined
Jul 17, 2002
Professional Status
Certified Residential Appraiser
State
California
"You're not a cop, you're an appraiser."
Right though I sometimes feel like a property detective - piecing together value clues!
 

JENIFFERW

Member
Joined
Nov 26, 2007
Professional Status
Licensed Appraiser
State
California
You're fundamental job is to value the property for your client though, right? Does it make a difference to your opinion of value? Are owner occupied properties worth more than tenant occupied properties? I would say it really depends completely on the condition of the property if it were to be sold. IMHO, owner occupied vs. tenant occupied only makes a difference to the lending decision because of likelihood of non-payment, which is beyond your scope of work. I would say though, you are obligated to disclose anything you KNOW, but you seem to be making an assumption.
 

JENIFFERW

Member
Joined
Nov 26, 2007
Professional Status
Licensed Appraiser
State
California
And, if it matters, usually when unsure, I will put a comment in the addendum that says I have indicated occupancy as zzz, because of zzz, but this is what I know about it..... "The underwriter is advised to review this information and determine if it meets their guidelines."
 
Last edited:

ZZGAMAZZ

Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
In my limited experience, form reports require an appraiser to address occupany; and although the owner-tenant dichotomy is not as "controversial" as numerous other appraisal issues, a failure to conduct an appropriate level of due diligence that results in an incorrect response can mislead the lender and result in inappropriate loan terms.
 

JENIFFERW

Member
Joined
Nov 26, 2007
Professional Status
Licensed Appraiser
State
California
It's not misleading to not investigate. Investigation of who the occupant is, is beyond the scope of work. If there is a question based on what you know, disclose what you know, but you are not required to do surveillance and keep a record of who comes and goes. Do you also have to investigate FEMA flood maps to make sure they are accurate?
 

ZZGAMAZZ

Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
If I find a discrepancy between my data provider and my flood zone provider I disclose the discrepancy and advice the client to obtain a flood cert; if my property inspection leads me to question the occupancy status, I advise the client to provide me with documentation that the property is either owner- (utility bills, drivers license, etc.) or tenant- (lease copy, cancelled checks for rent payment) occupied.

It takes a lot more time, and it's often less-than-popular with the 1st-tier client, but an appraiser's obligation is to the ultimate lender...
 
Last edited:

JENIFFERW

Member
Joined
Nov 26, 2007
Professional Status
Licensed Appraiser
State
California
I wouldn't say that what you are doing is wrong, but I would say that it is beyond your obligation within a normal scope of work. Due diligence is your obligation. Disclosure of what you find is your obligation. I don't think that investigating occupancy is required to fulfill due diligence requirements.

I think on the underwriting side, they make the originator and borrower provide evidence of occupancy. It is for them to investigate, because it is a lending issue (owner occupied loans are more likely to be paid), not an appraisal issue. Does it change your opinion of value? Wouldn't the same house, in the same location, with the same conditions, sell for the same amount?

I hope that we are arguing in an effort to learn from each other, as I do not mean any of this as a challenge of who is right or wrong.
 

John Oesterle CA

Thread Starter
Sophomore Member
Joined
Jul 17, 2002
Professional Status
Certified Residential Appraiser
State
California
Appraisers are 'the eyes & ears of the bank'. Occupancy information is requested on the form. The appraiser's job is to fill out the form. It is definitely of interest to the lender as it affects the terms of the loan and in many cases the future condition of the property.
I think it is important NOT TO INFER anything and to REPORT FACTS in a noninflammatory way - what is observed about the property only. Ownership is about the property.

Nothing about the person is in the appraisal.

When flood information sources differ or subject is near Zone A then I include FEMA maps in my report.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks