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Review Question

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Roger

Junior Member
Joined
Jan 24, 2002
Professional Status
Certified General Appraiser
State
Missouri
Completed a Form 2006 Desktop review for a property about 15 blocks from my personal residence. I am familiar with the neighborhood, and have several years of review work experience.

Original report looked fine, all comps within subject subdvn. or adjacent, similar design, etc.

The only problem I found was that the original appraiser did not disclose the listing data of the subject. Subject was listed for about 8% less than appraised value. Original report was for a sale, but original appraiser did not get a contract. This was all noted in my review.

Now the lender wants ME to supply the listing data, and explain why appraised value was higher than the listing price.

I say no. The lender should go back to the original appraiser, and have them correct the deficiency in the original report.

Is my thinking wrong here? Just looking for another viewpoint.

Thanks in advance for any input.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Roger:

Was the property a FSBO or a professionally listed offering?

If FSBO then the lack of disclosure is not good but possibly understandable (may not have been disclosed to the appraiser!)

IF professionally listed and 'made available to the general public, with normal exposure' and normally avaiable to appraisers...(seems to have been, YOU foound it)... I would disclose the asking price and the Days on the MArket as of the effective date of the appraisal, and comment "The typical buyer is unlikely (except in very 'hot' markets) to offer more than the published asking price for a property".

I mean it is not your job to explain WHY/HOW the original appraiser went so far above the asking price! Tell them your X-ray secret reviewer decoder is broken this week...

Somehow I envision a Sherlock Holmes deer-staker hatted guy with a magnifying glass sneaking up on the unwary 'original appraiser' and pulling back the top of his head and peering in to make some discovery...

naaah.

However, disclosing the list price and making a statement about typical buyer should fall within your scope as a reviewer... in my opinion...
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
You can supply the listing data, no problem. An explanation of why the appraised value is higher than the listed price is up to the original appraiser, I would think.... unless you do have a good explanation, I wouldn't venture into that. If you do agree with the appraised value, then maybe the listed price was actually low? What was the DOM? Is the DOM in line with your market or was it sold pretty fast? I have written replies to questions like this that I simply don't know what the motivations of the seller, Realtor, or buyers were/are and an explanation directly from those people involved in this transaction would likely provide the best answers to their questions. I write it up real nice if they are nice.... sarcastically if they are not 'nice'. :oops: :p

Hope this helps.
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Next time in your final comments note the the appraiser did not explain....and kick it back to them to provide the info. On this one did if you did agree with the higher value then yes you need to explain why. I have been using the 2002 form lately that has alot more review questions and is less concerned the math and ratio stuff. With this form there is more room to comment what you did or did not like about each section of the report.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I always use the field review form even if doing a desk review because it is more USPAP compliant and has more room for comments. Would also agree with "let the original appraiser state why he/she did not include listing information".
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
:oops: I did not mean to imply that it was impossible to agree with a value conclusion in excess of the offered price :oops:

But I do maintain that disclosure of listings DOM sales etc should fall within the normal scope of a review. Should the reviewer find and appraised value in excess of the listed price, an explanation of the reviewer's logic is appropriate...

Second guessing the original appraiser is beyond the reasonable scope of the assignment.

~~~~~~~~
:evil:
I have done too many reviews where an out of town individual comes in and blasts a value well in excess of recent offered prices on a subject property.... I get a little irritated when a house has been listed for YEARS at price X with no sales, and some make-the-number appraiser calls it $100,000K more than the last listed price, with no splainin'... 8O
 

yvonne dill

Sophomore Member
Joined
Jan 21, 2003
I've just got to add a little story. Did a Review on a REO house on a hillside with a god awfull multilevel decking to the front entry. Our realtor provided us with MLS sheets where this property had been listed over a year for ####.

The appraiser for this REO, did not research or mention this list history. She did not adjust for the functional monstrosity of the front entry. Her appraisal came in ####++. She used homes with far superior access.

When I contacted her with the list history, her reply was "So?"

God, I love this job.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Sometimes functional obsolescence is not as obvious as your story shows. I did a REO on a custom home in a gated community. The home had a view of the golf club and the golf course, had been listed but couldn't sell. At first blush, the home looked like the value asked was reasonable. While there, the neighbor came out to talk. Turns out that the age of the typical buyer was older and the master was upstairs. This had turned off numerous buyers. So, functional obsolescence that might not exist in some areas may well exist in others depending on the type of buyer. Fung Shei anyone?

Roger
 

Randy Beigh

Senior Member
Joined
Jan 16, 2002
Roger

In 1970, I was working for a real estate sales company that had exclusive listings on a builder's homes. He built them by the boatload. There was this one floor plan that sold well, but we had one house that had never been sold. When we went to look at the house, we knew what the problem was. Even though the floor plan was popular, black carpets and black/white vinyl floors didn't cut it.

The builder had to replace the carpeting and vinyl. then it sold.

The point is, you are correct, you can't always tell the functional from photos that are in an appraisal.
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
I agree with you. Your job is finished. My contention, is over the past few years, the review process has been utilitized by the lending community to satisfy the requirement of a "second appraisal"---this is obviously an economically viable vehicle for most appraisers "believe" they can perform a review for a fee less than an appraisal fee.

Let the first appraiser clean up his/her work themselves. Your finished with your scope.

I see this oversight here often--generally through the less scrupulous lenders-and we know who they are.
 
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