REO Appraisal HELP

[Lukasz123us]

I might be doing an REO appraisal and would like to see one before i accept. The lender wants :"No adverse factor summary. Please provide a current As-is fair market value for the subject REO property based on the subjects present corresponding condition, given 30-60 day marketing times for the area. No risk ratings, please. Interior inspection required. PLEASE PROVIDE PVO OR SUPPLEMENTAL REAL ESTATE OWNED ADDENDUM WITH APPRAISAL REPORT PROVIDING 30 DAY AND 60 DAY VALUES. THIS IS AN REO PROPERTY." If some one could email me a sample appraisal or give me some pointers that would be very much appreciated. Which form is the REO in Nova Day One? Thanks in advance

 

[RSW]

Look at the definition of market value provided by Fannie Mae in the URAR:

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a
reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.



The section marked in red above is just what your client wants. You are to do an appraisal as if it were on the market like any other property. Now, what comps do you use? If the market is mostly made up of REO sales, then use them. If the maket is not made up of REO sales, then use market sales. You are not to take into consideration the fact that the subject is a REO property. Only take into consideration its condition. The lender is going to want an AS IS appraisal on the URAR and then four values on the REO addendum. An AS IS value, an AS Repaired value, a 60 day AS Is value, and a 60 day AS Repaired Value. You will need to list any repairs on the REO addendum as well as supply three active listings. Some lenders also want the three active listings gridded out on the URAR as comps 4-6 or higher.

Hope this helps.

 

[Esox]

The lender is going to want an AS IS appraisal on the URAR and then four values on the REO addendum. An AS IS value, an AS Repaired value, a 60 day AS Is value, and a 60 day AS Repaired Value. You will need to list any repairs on the REO addendum as well as supply three active listings. Some lenders also want the three active listings gridded out on the URAR as comps 4-6 or higher.

Hope this helps.

Since they want four different values, does the appraiser get to quadruple his fee?

Kevin

 

[RSW]

That would be up to the appraiser and to the client. You need to have the proper documention in your workfile to support the other values given in the appraisal report.

 

[BNICK]

if there are repairs needed , where are you going to get your data for the repair work, do you know how to add/subtract entrapnuerial profit to the report, luk, this and other issues you raise in your request ,may reveal that you are not qualified to do the SOW required, just looking at another REO URAR is not a smart way to do these reports, it is your call.If you want to do these reports I suggest continuing ED or do several with a mentor ,good luck .

 

[VegasWayne]

The market here is dominated by REO sales. If no repairs are needed and the comps and listing have short market exposure all four values can be equal. The REO addendum asks for competitive listings. These are generally REO and short sale listings in similar condition to the subject (unless your market has only a few REO and short sales available). My clients like to have the type of sale for the comparables and the days on market reported on the grid.

 

[Tim The Enchanter]

PLEASE PROVIDE PVO

Prospective Value Opinion?
Is the order from Wachovia by chance?
The acronym is familiar.

 

[RSW]

if there are repairs needed , where are you going to get your data for the repair work, do you know how to add/subtract entrapnuerial profit to the report, luk, this and other issues you raise in your request ,may reveal that you are not qualified to do the SOW required, just looking at another REO URAR is not a smart way to do these reports, it is your call.If you want to do these reports I suggest continuing ED or do several with a mentor ,good luck .

A good source would be the M&S Home Repair & Remodel Cost Guide. There are also other sources available as well. You could also try talking to local contractors about how much it costs to do the repair work.

As to the entrapnuerial profit thing. Where is that coming from? Market value should have the entrapnuerial profit built in to it. There really is not much difference in a REO appraisal other than the REO addendum.

 

[BNICK]

Scott, REO's I do here want the cost and what the probable total will be , no contractor will show and do work at his cost per sq. ft .per hour etc., there is a profit that the agency that requests the REO wants to see, the more work, the more entrapnurial profit , less work less profit, because it affects what the final value is based upon the market times in the SOW .Again these are items provided in the SOW when sent to me to provide and comment on.

 

[Lukasz123us]

Yes the order is from Wachovia.