Poll... Regarding a four plex reporting form

[Damon Pedersen]

Please help me on this one. I am in debate with another appraiser as to what is the correct form for reporting a Multi Family property. It is a four plex.

Sometimes the numbers must speak for someone to understand.... :lol:

Damon

 

[graindart]

Correct?
I don't know......

What I use?
Small Residential Income Property Appraisal Report Rev. 10/94 (Fannie 1025, Freddie 72)

 

[Mountain Man]

4-pelx? I would use the Small Residential Income Property Appraisal Report or a narrative format. It depends on the assignment, property, scope, how much the client needs and is willing to pay, etc.

 

[George Hatch]

Federal banking regs consider 1-4's to be residential properties, and 5+ units to be 'commercial'. The underlying reason being that up until 4 units, there is some possibility of owner occupancy being the primary motivation for buyers, and income might be the secondary motivation. With 5 units and up they figure that it's all about the income, even if the owner lives onsite.

Ergo, the Small Residential Income Property (SRIP) with its funky adjustment grid is intended for use in appraising 2-4's, and the 71b (4-page) with no adjustment grid for the 5+ properties, theoretically with a $750,000 transaction limitation. Obviously, the 71b is so old that it isn't very USPAP compliant without quite a bit of extra help. I know at least a couple appraisers who use the 71a form (8 pages) for all 5+ units because they consider it easier to do a good job using that form. Personally, I only do a few 71a forms a year because after a certain point (about $1.5 mil) my clients want narratives. I use the 71b quite a bit. Matter of fact, I just finished one today and I expect to finish another one tomorrow.

IMO, it's eventually less work for the appraiser if they use the format that comes closest to being geared toward the assignment at hand. Regardless, it's the appraiser who makes the appraisal; not the form.


George Hatch

 

[Damon Pedersen]

Thanks,

I typical use the Small Income Report (or what I call Form 1025). I guess it does all depend on the assignment, but I think the commonly accepted form is form 1025.

Damon

 

[Steve Owen]

The only 2-4 families I have ever done have been on a 1025. For everything I have ever done with more than four units I did a narrative report - complete appraisal, either summary or self-contained format. Is this right? I'd say that depends on the client, the appraiser, and the property.

Interesting, George. I would think that by the time you got the old 71b compliant it would have been easier to write a narrative summary. (But, I'm sure you know what you're doing - to each his own. lol)

 

[Hank Schneider]

What is the fee range for the 71a and 71b for say a 6 unit and a 12 unit building?

 

[Richard J. Glesser]

Your fee should be directly related to the time necessary to complete the report. Estimate time necessary and divide it by the time it takes to do a typical URAR. That number tells me at what point I'll break even doing a commercial report instead of pounding out residentials. From that number I quote a fee. If it's an assignment I'd prefer not to do, push you fee up so that, in the event they still order it, you can at least smile on the way to the bank. (I don't care for brocolli, but if you pay me a few thousand bucks, I could clean up a platefull.) If I want to use it to expand my resume or otherwise grow within the profession, I may discount slightly. I have gone to providing a cap fee sometimes where I determine the most it will cost and bill a lessor amount if everything falls easily in place or it requires less time than expected. With the market as it is with the availability of so much work, I can safely say that any commercial appraisal which takes a week or more will cost me $ if my fee isn't around $3,000 (weekly residential average). Do your math and give them a bid. :usa: