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Reconsideration Of Value, How Do You Handle It?

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JoeB

Member
Joined
Jun 1, 2006
Professional Status
Certified Residential Appraiser
State
New York
After appraising a Real Estate agents home for a re finance, I received a note from the AMC that the lender asked me to review additional 4 comparables that were submitted. How do you handle this?

To curb this problem, I usually attach a cma type sheet included within the appraisal that lists all properties that were considered when selecting the best comparables to determine an accurate valuation. The submitted properties were so bad, they were not even considered!

What I did was listed all 4 additional comparables in a addendum and gave a brief reason why I did not use them. I also added a comment asking why the new comparables submitted were better than the ones used within the report?

This took an additional hour, and was payed nothing!

The file apparently has been closed because i never heard back from anyone. It was apparent the Real Estate agent was not looking for good comparables, but was shopping for a specific value.

How do you handle this type of request?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I don;t include a cma of properties properties considered, ...they stay in my work file, i write that I considered additional properties in my analysis as well as the comps on the grid.

This kind of request, a PITA, I address each idiot sale briefly and summarize and why it is not a good comp. I don't work for clients who send this kind of thing too often. Appraisers have to charge more upfront for this and the other nonsense that can come our way now after a report is finished.
 

JoeB

Member
Joined
Jun 1, 2006
Professional Status
Certified Residential Appraiser
State
New York
I guess where all obligated to address each comparable? It would be nice to charge additional fees, but i would think that the lender would probably exclude you from getting further assignments, asking for an additional fee. That is the sad reality of demanding additional fees for additional comps!
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Sad but true Joe. Therefore appraisers have to charge more upfront and be selective who they work for. I've dropped clients who send excessive ROV and my better clients send none or very few. Many engagement letters state appraiser will agree to consider additional sales as part of assignment so not possible to charge more.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Shouldn't take long to determine if the new "comps" are comparable. Dismiss each with a sentence.

ROV 1 was not considered because it was larger in GLA by more than 10%. ROV 2 was not considered because it is out of the neighborhood and market conditions there are different. ROV 3 was not considered because it is superior quality and more than 20 years newer. The comparables used are the most proximate, recent, and similar sales I found. None of the ROVs were remotely similar to my selected comparables.
Something along that line. And for Res, you should bid assuming you will have to address same if the value is below the contract or "target" price.
 

TRESinc

Elite Member
Joined
Dec 1, 2011
Professional Status
Licensed Appraiser
State
Ohio
After appraising a Real Estate agents home for a re finance, I received a note from the AMC that the lender asked me to review additional 4 comparables that were submitted. How do you handle this?

To curb this problem, I usually attach a cma type sheet included within the appraisal that lists all properties that were considered when selecting the best comparables to determine an accurate valuation. The submitted properties were so bad, they were not even considered!

What I did was listed all 4 additional comparables in a addendum and gave a brief reason why I did not use them. I also added a comment asking why the new comparables submitted were better than the ones used within the report?

i don't include all sales i researched in my report, there is no need to. i reviewed all sales and chose the most appropriate ones and used them in my report. i do the same steps only i don't add any comment asking why the additional sales were chosen. i already know why they were chosen - they sold for a higher price. i limit my ROV responses to 3 sales. if there are more than 3 sales i state there will be a $75 per address charge. there is no reason to submit more than 3 sales, it's just filibustering.
 

James Sturm

Member
Joined
Jan 4, 2005
Professional Status
Certified Residential Appraiser
State
Arizona
With each report, I supply the filters utilized for finding comparable properties. If the sales for reconsideration of value provided by the client are within the search filters, I will consider at no charge.
HOWEVER: If the sales are outside my search filters, I will question why I should consider sales (not comps) outside the search filters. Therefore at this time, I will require a fee to provide verbiage as to why I did not utilize the provided sales with the common response being the sale is a sale and outside the search filters and therefore, explaining why the sale was not considered comparable.

EXAMPLE:
Specified listings from the following search: Property type Residential; Inside the map search Rectangle
(-111975553,33043829,-111961777,33028827); Pool - Private of No Pool; Status of 'Active', 'Closed', 'Pending','CCBS (Contract Contingent on Buyer Sale)','UCB (Under Contract-Backups)'; Approx SQFT between 1300 and 1700; # of Interior Levels between 1 and 1; Year Built between 2003 and 2010; Close of Escrow Date between '08/05/2015' and '08/05/2016'.

THE FOLLOWING FANNIE MAE QUESTIONS ARE INCLUDED IN EVERY APPRAISAL PERFORMED.

PER FANNIE MAE GUIDELINES:
Q16. What type of properties are to be analyzed for the data reported in the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report form?
The data regarding trends to be reported in the One-Unit Housing Trends section "must be" reflective of those properties deemed to be competitive to the property being appraised. Additional commentary should be provided on the other segment(s) of the neighborhood when segmentation is present to aid in understanding the overall neighborhood dynamics.

Q17: Are the trends that are reported on the Market Conditions Addendum to the Appraisal report (Form 1004MC) the same trends that are to be reported in the One-Unit Housing Trends section of the appraisal report (Form 1004)?
Yes. The conclusions regarding trends that are obtained from the Form 1004MC "must be" the the same trends reported in the Neighborhood trends section of the Form 1004. The information reported on both forms "must" be consistent to provide the lender with a clear & accurate understanding of the market trends and conditions present in the subject neighborhood, based on properties that are considered competitive with the subject being appraised.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Are the clients paying these fees?
With TRID locking in fee paid to appraiser after 3 days on lending for FF products, how does an appraiser collect additional fees for the ROV?
 

BRCJR

Elite Member
Gold Supporting Member
Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
If the fee is paid the client/lender is paying it or the CD's must be redone and the clock starts again, if I am not mistaken.
 
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