Reconsideration Of Value, How Do You Handle It?

[Eli]

After replying to the comparables submitted and maintaining my original position, yet another email has been sent to me asking for an adjustment to be made because of a superior school district. To me, this is fishing for value since i had already addressed the borrowers(real estate agents) previously submitted comparables. When does it stop? Have the appraisal reviewed. Let the reviewer use the hand picked comparables, not comparable with the subject, to make their desired value. How many times can they question my opinion of value?

Just comment on it. You either have comparable in the same district or you have taken it into consideration. If you have not then do so and reconcile. If it keeps going on? Contact the State appraisal board and whoever else you want to including the FBI and CFPB. FDIC, OCC, etc.

 

[J Grant]

Then repeat your objective findings...no adjustment found in property sales ....were any of the comps from same school district as subject ?

 

[Eli]

After replying to the comparables submitted and maintaining my original position, yet another email has been sent to me asking for an adjustment to be made because of a superior school district. To me, this is fishing for value since i had already addressed the borrowers(real estate agents) previously submitted comparables. When does it stop? Have the appraisal reviewed. Let the reviewer use the hand picked comparables, not comparable with the subject, to make their desired value. How many times can they question my opinion of value?

Just comment on it. You either have comparable in the same district or you have taken it into consideration. If you have not then do so and reconcile.

The underwriter i would suspect, relaying the information from the borrower. The school district has a national ranking and was mentioned in the report. This does not warrant an adjustment, This may offer additional appeal to a prospective buyer who has children who will attend school. This has no additional appeal for someone who does not have children school bound, There is no data expressing additional property value for a home within the school district. The appraiser has used better comparables than those submitted by the borrower, and has used the best comparables available as of the effective date of the appraisal. The appraiser is confident in his opinion of value. PERIOD

Does the appraiser need to say more?

Maybe. School districts do have impacts on value, regardless of whether a buyer has kids or not. It is just one influence on value. I hope you had one other comp in the same school district.

 

[DWiley]

Just comment on it. You either have comparable in the same district or you have taken it into consideration. If you have not then do so and reconcile.


Maybe. School districts do have impacts on value, regardless of whether a buyer has kids or not. It is just one influence on value. I hope you had one other comp in the same school district.

If one looks at listings in my area, one might conclude that if you don't live in Williamson County you don't love your children

To say that a person without kids would not consider the effect (if any) of a school district seems illogical to me. If I knew that being in a certain school district affected value, I would consider that, even if I did not have school age children, because one day I will likely sell the home.

The better way to address that is with raw data, not subjective speculation.

 

[JoeB]

i offered 2 comps in the same school district, and 2 comps in the same town as the subject.Why would i use comparables in a different town when i have comps in the subjects town that is in the same school district. I made no adjustment on the grid for location due to the school district..Why don't they comment on why my comparables are inferior to those submitted by the borrower? It should be a 2 way street! My mistake was to mention the school district to begin with! Violating the rule " give them only what they need! "

 

[Randolph Kinney]

Do you actually bill the client, and get paid for this? Just curious how it works out.

I have had one client pay of the additional comp. I have the rest say, "Never mind."

 

[DWiley]

i offered 2 comps in the same school district, and 2 comps in the same town as the subject....

Then I would base my response on that data.

The ROV process can be and is abused, in some cases. That is why some AMCs and lenders have ROV limits (e.g. one submission with no more than X sales to consider). The ROV process sis specifically allowed under DF, so it is hard for a lender to refuse an ROV request by an owner/agent/etc. However, that must also be balanced with the AIR requirements in that same law, IMO.

 

[Eli]

i offered 2 comps in the same school district, and 2 comps in the same town as the subject.Why would i use comparables in a different town when i have comps in the subjects town that is in the same school district. I made no adjustment on the grid for location due to the school district..Why don't they comment on why my comparables are inferior to those submitted by the borrower? It should be a 2 way street! My mistake was to mention the school district to begin with! Violating the rule " give them only what they need! "

If you believe school district has an impact on value then that is your call. Base it on factual data like Danny said. If you don't believe it has an impact on value with the comparables you used, then comment and disclose that.

I have no idea why the borrower thinks their comps are better. Do you? If you do then simply state that in your revised report.

 

[JoeB]

There is no data available suggesting an increased value solely because of the school district. I do agree that subjective speculation was not the best way to explain why the school district does not solely warrant an adjustment, but i did document that there was not justifiable data to make the adjustment too.
I probably could have expressed this better, but I did not.
The sorry fact is both the borrower and myself know she is fishing for an inflated value.

 

[Eli]

There is no data available suggesting an increased value solely because of the school district. I do agree that subjective speculation was not the best way to explain why the school district does not solely warrant an adjustment, but i did document that there was not justifiable data to make the adjustment too.
I probably could have expressed this better, but I did not.
The sorry fact is both the borrower and myself know she is fishing for an inflated value.

Why though? Is there gold buried there? That is where realtors can help you sometimes because they read atypical motivations. I'm pretty good at it. I would pick up the phone and call the borrower. In a heartbeat. I am not scared of any of them and I like to hear motivations. Motivations is just one element in the valuation process, but it can really help sometimes. If the borrower is upset, I would want to know why and would have no problem explaining why my comps are the best and I followed protocol. I never would mention value per se to them.

Talk to the lender or other middle person. They can tell you info. I don't know where you are at, but consider the info you have and comment on it. If they keep it up after that, then consider filing a complaint.

A complaint will get some serious attention.