REO appraisal

[mellysmommy]

Please pardon my ignorance. I have never done an REO appraisal and have never been asked to do one until today. I do know what they are, I just don't know what is involved with one. Could some with experience just enlighten me as to what is involved? Thank you in advance!

 

[Restrain]

First, read your SOW from the client. You will have a client-imposed marketed time as well as a normal marketing time. You will need to do an estimate of repairs needed to restore the home to normal marketable condition. Be aware that you may have to call for repairs (electrical, plumbing, AC, etc). Watch for hidden conditions (water penetration, settlement).

You'll get push-back on this, but use at least 1 REO sale to demonstrate the value of the subject, as a REO, and what the market reaction is over and above actual cost to cure. You will find that this exists, and you should show this as a line item for homes sold not as a REO.

There is a REOAD form you will have to use, and show 3 listings.

Be sure to take a flashlight, preferably a 4 D-Cell Maglite (makes a great club as well as a light). You never know what you will run into. Take PLENTY of photos. Not only of subject but surrounding properties. Be sure to describe FULLY the immediate neighborhood (how many foreclosures, etc). Market trends, how many REOs on the market, Days on Market, etc.

Good luck

 

[thevaluator]

General procedures in the valuation of distressed homes most likely will require [repair estimates], estimated “cost to cure” analysis, “subject to completion” values, all needed to arrive at the estimated “AS-IS” values on the individual properties.
Some markets may have sufficient recent sales data possibly to perform a direct analysis; however remember analysis of these sales will also require the extent of repair needed to them.
You may find the "subject to completion" value less a "cost to cure" allowing for investor contingency to be the most defendable method.
Good Luck.

 

[CANative]

Keep in mind that they will be relying on your analysis to decide whether to sell the property in it's current condition in the normal amount of time it takes to sell a property in that condition; to invest the money (to make more money) and sell the house in the normal time it takes to sell houses in that condition; to sell the house in it's current condition in a SHORTER amount of time than it typically takes to sell in that condition; and investing more money for repairs and selling the house in a SHORTER amount of time than it typically takes to sell in that condition.

4 values under 4 scenarios. Two of the values involve forecasting. There's a lot of work and stress in accomplishing this without getting burned.

 

[NC Appraising]

Ashley,

Hi!!


I know you, but you don't know me. :laugh:We had the same agent recently. I realized this when I used your house as a comp and I verified it with our agent.


Take a online course from someone Tonight.
Mckissock
AI in class only
JVI REO has a class google it.
http://www.appraiserscoach.com/ contact this guy to see if he knows of any online CE that you can take.

Also use the search function on this forum, plenty of discussion. Google it too.

Do you work on your on or for someone? Can you get some help from them?

Since your in a time crunch, sign up with JVI REO and take their online course, and it counts toward your CE.

I have a AI REO book that I can let you borrower, contact me at your real estate appraiser charlotte north carolina

 

[Lee Lansford]

Please pardon my ignorance. I have never done an REO appraisal and have never been asked to do one until today. I do know what they are, I just don't know what is involved with one. Could some with experience just enlighten me as to what is involved? Thank you in advance!

1st, ASK your client for their specific requirements for the appraisal assignment.

2nd, BE CERTAIN that if the client is asking for MORE than one opinion of "value", that you and your client agree on the definitions of "value" that you will be working under.

 

[mellysmommy]

Thank you all for the information. I actually turned the order down because I didn't want to get in over my head! But I thought, maybe educating myself a little would prevent me from turning one down in the future. I think a class is an excellent idea!!!

 

[mellysmommy]

Hi

Your first sentence is kind of creepy until you read on. HAHA. Did you use the house we sold or the one we bought? The appraisal on the one we bought was just horrendous, but that discussion is for another day!!

Thanks for the advice. I think a class is exactly what I need to do. Of course, I hate turning down work, but I just didn't want to get in over my head.

I worked for a company out of Raleigh for the last 6 years. I have just partnered up with someone and we are out on our own now. Its a tough time, but we're hoping to make it through!

Ashley,

Hi!!


I know you, but you don't know me. We had the same agent recently. I realized this when I used your house as a comp and I verified it with our agent.


Take a online course from someone Tonight.
Mckissock
AI in class only
JVI REO has a class google it.
http://www.appraiserscoach.com/ contact this guy to see if he knows of any online CE that you can take.

Also use the search function on this forum, plenty of discussion. Google it too.

Do you work on your on or for someone? Can you get some help from them?

Since your in a time crunch, sign up with JVI REO and take their online course, and it counts toward your CE.

I have a AI REO book that I can let you borrower, contact me at your real estate appraiser charlotte north carolina

 

[Wolverinefan]

You really never know with REO's? Sometimes they are in decent condition and there isn't much more work aside from a typical appraisal. Other times and more than not they are trashed and a lot of work is involved with trying to figure out the cost of repairs.

Then you always have to be careful as not to over repair the home to where its now a new home!

Good luck!

 

[NC Appraising]

Your first sentence is kind of creepy until you read on. HAHA. Did you use the house we sold or the one we bought? The appraisal on the one we bought was just horrendous, but that discussion is for another day!!

Thanks for the advice. I think a class is exactly what I need to do. Of course, I hate turning down work, but I just didn't want to get in over my head.

I worked for a company out of Raleigh for the last 6 years. I have just partnered up with someone and we are out on our own now. Its a tough time, but we're hoping to make it through!

Sorry, I fixed my post, I was trying to be funny.

Kim is good friends of ours and our kids play together. She told me that she was helping out another appraiser in their home search, but she didn't tell me who it was.

Small world, but I just finished a home in Mint Hill, I used your home as a comp. See there, proof that I do verify me info!! I'll keep this post in case the State ever comes calling!!:laugh:

Good Luck!!

Your Charlotte NC Appraiser