Recert of Value after 3 months

[DKAYTES]

I completed an assignment just over 3 months ago and have been asked to do a 1004D to recertify the value. In examining the market and what has happened over the past 3 months, there were several sales which occurred. In analyzing the sales data of the 3 sales does not support the previous value. I have gone back and reviewed the previous workfile, and concur with my previous opinion of value I arrived to 3 months ago. ( Maybe I'm answering my question here) If I were to grid out the 3 sales, the value would be lower by about 2-3%. The market statistics indicate a 2% decline in the past 3 months compared to the previous 3 month period with the same search criteria. It is looking obvious there has been a slight decline. I have only been asked to do a recert of value 1 time in the past, and the value was still there. This appears different. My question besides indicating on the 1004D the subject's value has declined, do I provide a new grid of comps ( like in a review) indicating my new conclusions ? (Secondly, does this raise a flag of my original report ? This assignment is not a review of the previous report). This is why I hate doing recertification of value and only have only had to do it once in the past. Markets change.

 

[Randolph Kinney]

I completed an assignment just over 3 months ago and have been asked to do a 1004D to recertify the value. In examining the market and what has happened over the past 3 months, there were several sales which occurred. In analyzing the sales data of the 3 sales does not support the previous value. I have gone back and reviewed the previous workfile, and concur with my previous opinion of value I arrived to 3 months ago. ( Maybe I'm answering my question here) If I were to grid out the 3 sales, the value would be lower by about 2-3%. The market statistics indicate a 2% decline in the past 3 months compared to the previous 3 month period with the same search criteria. It is looking obvious there has been a slight decline. I have only been asked to do a recert of value 1 time in the past, and the value was still there. This appears different. My question besides indicating on the 1004D the subject's value has declined, do I provide a new grid of comps ( like in a review) indicating my new conclusions ? (Secondly, does this raise a flag of my original report ? This assignment is not a review of the previous report). This is why I hate doing recertification of value and only have only had to do it once in the past. Markets change.

If you read Fannie guide lines, if the value has decline, a new appraisal is required. In other words, you can't re-certify the value, it has declined.

The Fannie Mae Selling Guide of August 2010 states on page 438, Chapter 1, Appraisal Guidelines, Appraisal Document Standards, Report, and Property Inspections:

"If the appraiser indicates the property value has declined, then the lender must obtain a new appraisal for the property."

 

[Webbed Feet]

I completed an assignment just over 3 months ago and have been asked to do a 1004D to recertify the value.

There is no such thing as to "Recertify" a value. At best, such a misnomer would be a completion certificate, or bottom half only of the 1004d. The moment the top half of the 1004d is involved the new assignment is for a new real estate appraisal. As an appraiser you should know these things and post to other appraisers as if you understand them.

In examining the market and what has happened over the past 3 months, there were several sales which occurred. In analyzing the sales data of the 3 sales does not support the previous value.

What was your opinion of the market trend you opined in the original appraisal? If it was declining, is your above a surprise?

I have gone back and reviewed the previous workfile, and concur with my previous opinion of value I arrived to 3 months ago.

Gee, imagine if you didn't! :new_eggface:

( Maybe I'm answering my question here) If I were to grid out the 3 sales, the value would be lower by about 2-3%. The market statistics indicate a 2% decline in the past 3 months compared to the previous 3 month period with the same search criteria. It is looking obvious there has been a slight decline. I have only been asked to do a recert of value 1 time in the past, and the value was still there.

Asked to do a what? m2: Come on, get out your copy of the USPAP. It's called an "Update" in our lingo and USPAP says it is a new real estate appraisal and a new assignment! What do you know, even the form is labeled "Update."

This appears different. My question besides indicating on the 1004D the subject's value has declined, do I provide a new grid of comps ( like in a review) indicating my new conclusions ? (Secondly, does this raise a flag of my original report ? This assignment is not a review of the previous report). This is why I hate doing recertification of value and only have only had to do it once in the past. Markets change.

You are not doing a "recertification," ditch that wording once and for all. Partially, your misuse of the vernacular could be why you are confused. Your assignment is for a completely new real estate appraisal. So why would you give a flying rip what the results of a prior appraisal, that used a different SOW, was three months ago? Beyond using the prior value opinion as a benchmark for the SOW of the new assignment, there is no implication. Other than implications and some splaining to do if in the prior work you had stated the market was increasing and now just three months later it is declining, that might strike readers as a bit sudden or surely make your prior market condition statements doubtful as to if you are actually providing trend results or simply calling short term up and down spikes a trend.

Beyond the above, I hope you comprehend that the 1004d form without a bunch of supplements does NOT comply with the USPAP Standards Two for either reporting or the minimum certifications required for a real estate appraisal. The form is a piece of crap, many appraisers refuse to use it for reporting of such an assignment. The answer to your overall question is in asking yourself what does the USPAP require regarding minimum requirements for reporting a real estate appraisal? HINT: Incorporation does not represent meeting minimum requirements for a new appraisal for all of those items that the USPAP would demand be reported for that new assignment/appraisal. Right? For example, you can't claim you signed a set of certifications that meet the minimum required for the new assignment because you signed a set for some other old assignment that has portions of it being incorporated. Nor does simply concurring with past results specific to a past effective date mean that all of those results apply to the new current effective date. HINT: H&BU statement. If you don't comprehend these statements I just posted, do NOT ever use the 1004d for reporting a new real estate appraisal then.

 

[Webbed Feet]

If you read Fannie guide lines, if the value has decline, a new appraisal is required. In other words, you can't re-certify the value, it has declined.

The Fannie Mae Selling Guide of August 2010 states on page 438, Chapter 1, Appraisal Guidelines, Appraisal Document Standards, Report, and Property Inspections:

"If the appraiser indicates the property value has declined, then the lender must obtain a new appraisal for the property."

Fannie and her very stupid missives once again! Publishing something like that while failing to acknowledge that the reporting involved with the 1004d top half is a new appraisal regardless of what the results are! So thank you Fannie staff for being completely mindless regarding SOW matters, what the definition of an appraisal is, and adding to all the confusion instead of reducing it by clearly stating a third new appraisal would be required. Or some language to communicate that the 1004d reported results, and top half of that form, were and are in fact a real estate appraisal.

 

[Randolph Kinney]

Fannie and her very stupid missives once again! Publishing something like that while failing to acknowledge that the reporting involved with the 1004d top half is a new appraisal regardless of what the results are! So thank you Fannie staff for being completely mindless regarding SOW matters, what the definition of an appraisal is, and adding to all the confusion instead of reducing it.

I don't believe form 1004D is acceptable as the intended appraisal update as stated on the form.

You know that the SOW requires the same as the regular form 1004 with the 1004MC. Reporting those results are best done on those forms or (may not be acceptable to client) use the 1004D and state see attached addendum and write a summary narrative report.

 

[Webbed Feet]

I don't believe form 1004D is acceptable as the intended appraisal update as stated on the form.
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[DKAYTES]

You are not doing a "recertification," ( My bold) agreed, my verbage was not 100% in explaining this. The top portion of the 1004D is used as a low end valuation tool to re-analyize the market and recent sales. ditch that wording once and for all. Partially, your misuse of the vernacular could be why you are confused. Your assignment is for a completely new real estate appraisal. So why would you give a flying rip what the results of a prior appraisal, that used a different SOW, was three months ago? Beyond using the prior value opinion as a benchmark - that is all I'm doing for the SOW of the new assignment, there is no implication.

Other than implications and some splaining to do if in the prior work you had stated the market was increasing and now just three months later it is declining, that might strike readers as a bit sudden or surely make your prior market condition statements doubtful as to if you are actually providing trend results or simply calling short term up and down spikes a trend.

I will not have any type of explaining to do in the scenaro you described. there are always fluctutations in the market and in the past 90 days the market stats indicate a 2-3% decline, the most recent comps adjusted, support that conclusion. IF we now have a new effective date ( Effective date of appraisal update) it is only appropriate to use the most recent and relavant comps, then make the necessary adjustments. BUT - the 1004D does not allow for a actual opinion of value, only a yes / no, based on recent comps and an overall market analysis of the neighborhood with market statistics if the value has or has not declined.

Beyond the above, I hope you comprehend that the 1004d form without a bunch of supplements does NOT comply with the USPAP Standards Two for either reporting or the minimum certifications required for a real estate appraisal. The form is a piece of crap - agreed, many appraisers refuse to use it for reporting of such an assignment. The answer to your overall question is in asking yourself what does the USPAP require regarding minimum requirements for reporting a real estate appraisal? a In a complete 1004 report you're providing an actual value - but not on the 1004D form. Yet a full analysis needs to be done. which I have done, but not providing a new opinion of value. Different SOW.

I don't believe form 1004D is acceptable as the intended appraisal update as stated on the form.

You know that the SOW requires the same as the regular form 1004 with the 1004MC. Reporting those results are best done on those forms or (may not be acceptable to client) use the 1004D and state see attached addendum and write a summary narrative report.

Randolph, I agree with you. I am including a paragraph on the top of the form and do a simplistic narrative summary discussing the newer comps, but not arriving to a new opinion of value in the narrrative. Only using that narrative summary to support what I am saying on the front of the form and include a new 1004MC, but not a gird of new comps. I have already spoken to the realtors about those comps and will discuss that, again to support my conclusion on the top of the form. I could grid the new comps out for my own workfile and take it out before sending the report.

 

[Randolph Kinney]

Randolph, I agree with you. I am including a paragraph on the top of the form and do a simplistic narrative summary discussing the newer comps, but not arriving to a new opinion of value in the narrrative. Only using that narrative summary to support what I am saying on the front of the form and include a new 1004MC, but not a gird of new comps. I have already spoken to the realtors about those comps and will discuss that, again to support my conclusion on the top of the form. I could grid the new comps out for my own workfile and take it out before sending the report.

Like I said, the 1004D appraisal update is an appraisal and you are opining an opinion of value - the value has declined from the prior value as reported.

Your work file should be every bit as much and complete SOW as the original appraisal to opine a change in value or no change in value.

 

[DKAYTES]

Like I said, the 1004D appraisal update is an appraisal and you are opining an opinion of value - the value has declined from the prior value as reported.

Your work file should be every bit as much and complete SOW as the original appraisal to opine a change in value or no change in value.

I'm actually working on it now ( what else is there to do on a Friday night?? m2: ), building my workfile like any other report. Again, formulating my opinion if there is a decline or not ( because I'm stating that on the top of the form) but not providing an actual value. Not in the SOW.

 

[Mr Rex]

Workfile is nice, but make sure you cover the reporting requirements of Std 2 :icon_idea: