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Property Flip

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bororke

Freshman Member
Joined
Jun 14, 2013
Professional Status
General Public
State
Florida
I am an Underwriter reviewing a flip appraisal in LA market. The subject and the first three comps are all flips on the same street and the appraiser does not address this issue in the report.

I was able to verify that all of the sales have different buyers / sellers and I am comfortable with the improvements on the subject.

The report also includes 2 additional sales that are not flips in the subject market that appear to be good comps.

Am I being paranoid or should the report include commentary regarding all the flipping on this street?
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Aren't the previous transfer dates listed in the histories at the bottom of the grid?

How long is the typical holding period of the flips?

The subject might be in a flipping market, but there is no check box for that market condition.

:D
 

Pittsburgh Pete

Elite Member
Joined
May 6, 2008
Professional Status
Certified General Appraiser
State
Pennsylvania
If there isn't a box, it's not relevant??? :eyecrazy: It would behoove the appraiser to note and comment on the nature of the market on the street.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
:ROFLMAO:

Yes because one street is a big draw, like it's 5th Ave NYC.

The GSEs and FHA have flipping guidelines for flips.

Once the "regulatory acceptable" time frame holding period has passed, there is no regulation for appraisers to provide anything else. Is flipping a trend? Well ghee, it's not addressed in the 1004MC. Are foreign buyers a trend? Nope not a concern of lenders either. Are white two story homes with red front doors a trend? Maybe, but nobody cares about that either.

If you want to know the flipping trends, beyond what the regulations state must be covered in the report, then it has to be part of the letter of engagement, else, this scope creep will cost you more money, honey.

:D
 

Pittsburgh Pete

Elite Member
Joined
May 6, 2008
Professional Status
Certified General Appraiser
State
Pennsylvania
well there ya go--want more than the minimum of what is required you have to pay more! :eyecrazy::eyecrazy:
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
well there ya go--want more than the minimum of what is required you have to pay more! :eyecrazy::eyecrazy:

Yup,

That's why the GSEs, HUD, FHA, VA, Appraisal Foundation, all write appraiser regulations.

Because they don't know what's important for us to tell them, so we'll just ignore what they wrote and write what we like anyway.

.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Imo it is a reasonable expectation.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
And why is that?

Are we expecting more flips on that street, if there are no REOs?

Wouldn't it be more concise to discuss the reason properties are flipped? Like investors are working the market because there is/was a glut of REOs that were being sold below market value?

Isn' that what the GSEs ask for on their 1004MC form?

Ahhh, yup.


Are foreclosure sales (REO sales) a factor in the market? Yes No If yes, explain (including the trends in listings and sales of foreclosed properties).

Cite data sources for above information.

Summarize the above information as support for your conclusions in the Neighborhood section of the appraisal report form. If you used any additional information, such as an analysis of pending sales and/or expired and withdrawn listings, to formulate your conclusions, provide both an explanation and support for your conclusions.


Yup, read the 1004MC and the answer is right there in front of you.

.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
One would expect the OA discussed flips, REO's etc as well as the particular block.

The UW may want to look into who is ordering the appraisals...AMC, fee, turn time...the demand now for 48 hours , wouldn't it be great if UW stood up against it, as the turn time barely leaves time to breathe let alone write narrative.
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
The subject and the first three comps are all flips on the same street and the appraiser does not address this issue in the report.
Appraisers are required to verify and analyze the contracts of the subject and comps. Yes, that's a big deal. He didn't do that? The fact that they're all on the same street...maybe not so much of a big deal, however he still should have discussed it when explaining the subject's neighborhood and market conditions. They have the same street name...not as if you can sweep it under the rug!

Just curious, OP. How did you know they were flips if the appraiser never mentioned it?
 
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