• 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.

"Playing" Appraiser

Status
Not open for further replies.

Blue1

Thread Starter
Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Why is it the everybody thinks they can "play" appraiser? Just had a realtor send me "better" comparables because I didn't "come in" at the sale price. These "better" SALES were not comparable at all to the subject property. They were over one mile away in another area. All the realtor did was run sale prices to bracket the purchase price of the subject. Had to explain to them that the sale NEXT DOOR was a better comparable because is was the same size, built by the same developer, was the same model as the subject and closed only a month ago. (my comparable #1) I asked them how they came up with the listing price and asked if they did a market analysis and if they did, could they please fax it to me? Haven't heard a word.........

And then there's the UW "one more comp" request.....I'm about to require a copy of all UW appraisal licenses before complying with that request.....

And then there's the homeowner....the gentle homeowner......"redid" the bath one year ago and put new carpet in so.......it must be worth $20,000 more now?????

Any more?????
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Hey Blue,

I have your "one more comp request by the underwriter" solved.

I typically analyze more than three comparable sales in my reports. I usually shoot five or six while out in the field and use the best, so if it's more than 3, so be it. Most of my lenders are happy with that. One never wants more than 3 and you'll hear it directly from every underwriter if you do so.

Why? I asked one time. Well, it seems the investor becomes afraid/nervous when they see more than 3 comparable sales. Something must be wrong for the appraiser to supply more than 3, right? Could it be an unknown red flag by the appraiser? (actually they're just too stupid to realize you're going out of your way to do a decent job on an atypical appraisal). It actually got so bad with the 3 comp only thing that I got "the email" from the big VP with the typical corporate BS about being a "valued partner," need to understand their objectives, yadda, yadda, yadda, BUT basically stating, if you give more than 3 comps, you're out the door pal.

So, your answer is: Here's the new thing. Analyzing more than 3 comps may frighten the investor away. It just doesn't "look" good. You don't want to do that, do you. Mr/Ms Underwriter? :lol: :lol:

Isn't that why they call us to make rural locations suburban so it "looks" good? So get with the times. Three only.

Ah, appraising. The grand illusion. It's gotta look right, not really be right :cry:

Ben
 

Blue1

Thread Starter
Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Ben,

I agree with the "3 comp" thing and try to do that as much as I can however, in my area we are in a market of rapidly increasing property values. Sales even 3 months ago are "old" as prices are rising in excess of 1% per month. In this market, I routinely include a 4th "comp" which is an active listing or pending sale. Am I shooting myself in the foot?
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Blue,

You're just trying to do too good of a job by providing a pro-active appraisal report. Some lenders appreciate that. Others don't. I have two that "like" three comps only. One really doesn't count as they have the processors, yes the processor, review the appraisals and they have stated no more than three because, well because, they don't want to look at and/or review more than three. That's just lazy.

The other uses the "investor gets nervous" theory to support the 3 only concept.

Ben
 

cgjerdetu

Junior Member
Joined
Jan 29, 2002
Professional Status
Certified Residential Appraiser
State
California
Blue,

I almost always have at least 4 comps with 4th often being pending or active. I've maybe done two or three reports in the last year that only had 3 comps. I'm in a pretty cookie-cutter area, so I don't usually get requests for additional comps.

What gets me is when I've had requests for reconsideration (mostly from mortgage brokers) and the comps they provide I've already mentioned in the report. Did they read the addendum? Mentioned but not used because they were not truely comparable but may represent market activity in the subject's area. The addendums on those state ...as noted in the original report, 123 zzz Street did sell for zzz... this information was considered but not used because of X, Y and Z reasons...comparables in the report were more similar in terms of A, B...M etc. Just like I said in the original report. :|

Carolyn
 

Blue1

Thread Starter
Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Ben,

I get your point however, when I make time adjustments, I always include current listings for support. Seems to work good that way. All that being said, I agree, about the "3 comp" deal. When I do reviews, I am always alerted when I find more than 3 comps. Especially if the 4th, 5th or even 6th comp is from out of the area and higher in value than the first three comps. If there's that many comps, there better be a darn good reason.

Bottom line, when doing an appraisal for a mortgage loan, the lender needs a certain value in order to "do the loan." You, as the appraiser, will "kill the deal" or force them to work harder if you don't "come in" at or above their targeted value. That's the way the industry is and I don't see it changing any time soon.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Last group of "Better Comps" that I got included 1 sale that I had used in my report (and which well supported the value I came up with) plus 7 current listings. Based on these "Better Comps", the owner was right. I came in too low.

But. Since I am the appraiser, it is my opinion of value that counts and no changes were made. I liked my comps better.
 

Blue1

Thread Starter
Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Richard: You Da Man!!!!! Good for you. What were you supposed to do? Base your value on listings that had not yet closed?

AND speaking of listings........Does anyone know just what a realtor's responsibility is as far as listing a property? Can they list a property at whatever price they want? Are they responsible to do market research? As I said, my area has a HOT market right now for sellers. Seems they are listing their properties sky high and getting sky high offers!!! Unfortunately, recent sales don't support either the listing price or the high offers is many cases. That puts us appraisers in a bit of a bind, that is, when there are no sales to support a high sale price. But, a market has to function.....so......what's an appraiser to do? Kill all the deals, use bad comparables to make the sale price, HEY, maybe the realtors could actually look at the market before listing a property!!!!! Dream on..........I am currently using principal of substution, that is, pulling active listings from the same market and including them in my reports. Where am I going wrong? Or am I?
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Blue:
In our state, a realtor is REQUIRED to list the home at the price the seller wants to list it at. Period. The realtor can counsel, and explain til they turn the color of your handle, but it is the owner who is running the show.

The realtor can of course decline to accept the listing, but many will take it anyway under the assumption that once in hand they may be able to talk reason when the thing doesn't sell at the asking price. :roll:

There is at least one realtor in our market who does what he is told, and frequently lists 'em high. Tells the sellers that they are marginally nuts, but that he will do what they ask as long as they stick with im and don't bail to another realtor. He sells a bunch of houses, but has one of the worst DOM's in the area. Crazy likea fox, his advertizing budget must be outrageous, but I bet he actually does make it up in volume.

Gotta admit in a hot market the listings DO tell a story, but how is an appraiser to know at what point the crest has occured and the slide is back downhill... Seen some slides that make that guy over at the watercooler look like a soft landing. Some forcasting is needed to analyse the current market, how else can you tell when the crest is past? Can't catch a wave that's already gone!

The substitution issue you reference is fuzzy at best with regard to estimating continued market reactions: but sometimes it's the best thing you have going... Best be able to support your adjustments with historical data though. Have you taken any classes on Relo Appraising? These deal with substitution, forecasting and retrospective theories and practices in greater detail... I tool the A.Institute class a few years ago: it was a good one.

I have to agree with Richard, a comp is a SALE, a listing is a wish and a prayer!
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Lee Ann,

Relo appraising???

I thought relo appraising was MV x .90 = Anticipated Sale Price. :lol: :lol:

Hmm, so much for all that thinking stuff you learned in the AI class.

And no, I don't do relo appraisals

Ben
 
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