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Reply to Underwritter

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Jeff Horton

Thread Starter
Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I got one of those comments that really doesn't sit right with me. Wondering if it is just me.

Home with an very nice detached 30 x 40 shop. In our market and especially this neighborhood it is an over-imporvement. I can't justify but a small amount for a detached shop. But what ticks me is the underwritters comments:

Appraiser to provide a comp with a detached shop or remove from value.


Well if there had a been a comp with a shop I would have used it. Anway I don't think I should just remove it. After all it is there. Granted I could "Assume" it is not but why should I. What reason do I have to remove it? BEcauset he UW says its not there?

What say ye?
 

bradellis

Member
Joined
Jan 16, 2002
Jeff,

Two things:

1. You said that you gave the shop a little value. Based upon what? Does this market pay extra for that amenity? If so, you have a basis for an adjustment; if not, perhaps you should reconsider. Not telling you how to do your job, but it cannot just be based upon what you believe to be common sense; it must be market derived. However, it need not be a "shop" per se. Pretty much any sort of reasonably similar accessory building might be usable, such as a detached home office or the like.

2. I have trained underwriters before on how to communicate with appraisers. You might want to consider that it could be a review appraiser asking this- via the underwriter- and not the underwriter himself/herself.

So, show them the error of their ways (if they ARE in error), or bite the proverbial bullet.

Brad Ellis, IFA, RAA
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
Jeff

When I have a physical chacteristic or amenity on a property that I cannot support an adjustment for, I tell them the following: "Property has a barn or shop which is not typical for the area. A closed sale with a similar characteristic or amenity could not be identified. As a result, no adjustment was made because it was not supportable." I believe we have a responsibility to tell the reader what is on the site, we don't necessarily have to give it any value.
 

George W Dodd

Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Also,

You can use older sales, listings, etc to show value of an amenity or unusual feature.
 
A

Anonymous

Guest
Every time I get a stupid question from an underwriter I ask if the underwriter has an appraisal license and if the underwriter is familiar with my market area. That shuts them up.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Jeff,

Evidently Brad Ellis didn't train enough underwriters properly-hey, Brad #1 you're falling down on the job :lol: :lol:

Let's see, we could tell them the workshop is an over-improvement but it still has some contributory value, say, roughly equal to that of a one or two car garage. They would understand that, well maybe, and wouldn't question that adjustment. But it's too late for that now.

Or what do you all think of this??? They said: Appraiser to provide a comp with a detached shop or remove from value. You said you couldn't find a comp with a workshop so why not use a hypo condition based on their underwriting guidelines and allow no value for the workshop? Anybody agree with that idea??? That's what they're telling you by the statement they made. Just state it/repeat their guideline clearly in the hypo condition. Look at your problem in the same manner as the mortgage morons who won't lend on anything over 5 acres and require that no value be assigned to the remainder of the site over 5 acres. That requires a hypo condition to appraise. So will yours.

I would say: Describe the workshop as it exists on the site and use the hypo condition to make them happy/go away. Remember, be clear in stating your hypo condition.

Hey, it's an idea.

Ben
 

xmrdfghap

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Florida
<span style='color:brown'>Jeff, when presented with a structure or condition where there is no comparable of any type anywhere around, I use the cost approach to value it. I can generally assume that if a person found value in something enough to have it built, then someone else will as well.

I recall a "derrick" structure built on a property behind a house in the country. It was about 20' tall, and had a 6' X 6' platform on it. It seemed structurally sound and in good repair. How do you value it? A former owner was a bird watcher and he used it with a spotting scope to count birds. A later owner used it for star watching.
</span>
 

airphoto

Senior Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Pennsylvania
'nuther thought ..

Put in the underwriter's gobbledygook about eliminating the value .. then report the highest of your indicated values and include the comment: "Highest indicated value reported to allow value for additional structure not valued at underwriter's request."
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Bill;

haven't been here in a while, you crafty ole goat - you do pick some of the neetest scenerio's.

Greg;
I will agree with you for the most part, in regards to the cost approach, but one thing I noted left to the imagination - is the structure fixed or is it moveable :?: this can also lead to how to respond to the UW question.


8)
 
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