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Quick 2055 Question....re: Predominant Value

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Paul Shraga

Sophomore Member
Joined
Apr 30, 2003
Here is a quick one...

Backstory:
For my subject property, A single family attached townhouse, the value is coming in $100K (or around 40%) less than the predomininant values in the market area subdivision. (Still within the High/Low range, however). This is basically cause the market area has townhomes, condo's as well as Luxury SFR's.

The question:

Do I explain this in the "additional comments" section of my 2055 form ? (or perhaps on an addendum ?)

Any help, greatly appreciated. Thanks !

Cheers,

Paul
 

Tony Lehn

Junior Member
Joined
Oct 28, 2002
Professional Status
Certified Residential Appraiser
State
Indiana
I cannot think of a good reason not to explain it. You may avoid the restip from the underwriter if you explain it now. I make a habit of explaining anything that I think an underwriter will call me on, because it doesn't fit into their square little box. That makes for happy clients because everyone can understand the logic behind the report, and it avoids restips, which rob your client of time.
 

Soar Ohio

Sophomore Member
Joined
May 8, 2002
Professional Status
Certified Residential Appraiser
State
Ohio
If they want that kind of stuff spelled out for them the should order a full URAR. The 2055 is used when the borrower has good credit and the underwriter will not be looking for a reason to kill the deal.
 

Paul Shraga

Sophomore Member
Joined
Apr 30, 2003
Tony,

I understand.

If I put in an explanation, is it customary to include that in the "additional comments" section of the report ?

Thanks.

Paul
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Where ever it will fit. The 2055 gives sooo much room for comments, you may have to reduce the fonts, or add it on an addendum. Either way is fine.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
It is impossible for every home we appraise to be in the predominant value. There always has to be a smallest home or a largest home. Sooner or later, something will be outside the predominant range if reported correctly. However, it should fall within the immediate area market range and you should only have to explain that fact. It seems that you have a range of sales for town homes. You could specify your predominant range is for the townhome market which is lower than the condo and SFR market, but it is a different market. Note: I never put one dollar amount as the predominant range. I give a range based on the sales from the addition or immediate market area. When I see a single dollar amount on the predominant range of appraisals I review, it tickles me that it always seems to match the appraised value. How convenient!
 

rtubbs

Junior Member
Joined
Jan 15, 2002
Just had the UW send me this note today on an appraisal reported on a 2055:

"Appraiser to address the effect on marketability due to adjusted value being greater than predominant."

I always comment on that on a 1004 because I have it in my standard comments. Just haven't taken the time to put the same comments in my 2055 skeleton; but, will take the time now.
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
I comment on the predominate price under or over the subject both on the 2055 and the 1004. Takes little time and no call backs. I place this in my sales comparison comments in the addendum. I don't know how you have your report set up. But all my comments are in the addendum. I have been called a wind bag before by other appraisers that I have dealt with. Since I spell everything out for the reader.

Ryan
 
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