Reviewing appraisal

[Lee SW IL]

I was asked by a lender if I would look at a report and comment on an appraisal report, I said I do reviews and would gladly do a review of the property.

HHHAAAAA, of course this is not a typical property.

Subject property is a single family residence on a crawl space, with a laarge pole building behind the home and another on a lot next to the home.

There are many problems with the report. The report shows the parcel with only the pole building. Parcel with the house is not on the report. Report shows the property is zoned R3 SFR, it is actually zoned B3 Business Highway. Subject is located on a highway with a trucking company behind the property, home is compared to SFR's in a neighborhood setting. Im not sure that the Highest and best use of the property is a SFR.

I told the lender, verbally that the report is worthless. But, they would like me to put my comments on paper, and that I do not need to provide a new grid.

So far, I have put my comments on a review form.
Would you just write this as a narritive, or use the format of the review form?

 

[Pamela Crowley (Florida)]

I would do it as a narrative. This doesn't sound like one that could easily be completed on the form report.

 

[Jo Ann Meyer Stratton]

And don't forget to include the most important item--an invoice for your fee to do the review!!!

 

[David S. Roberson]

Lee;

I realize that this is not a typical review. But why write out a time consuming narrative review? Do it on the 2000 review form & add an addendum addressing the issues you brought up here. You can achieve the same results, and move on to another assignment.

 

[Tom Hildebrandt]

Lee

Sounds pretty simple all in all. You did a pretty concise job of explaining what factual descriptive errors were in the appraisal to the forum. The client does not apparently want your value opinion. Just explain it to the client.

I would write a letter, identifying all the items that are required by standards. I would say the client wished a review to determine if the appraisal was valid for the purpose ordered (loan risk analysis?) but that the scope of the review, the detail that the review was to cover, was left to the discretion of the reviewer. Then just explain that you first read the report, collected public data to verifiy the physical and legal characteristics of the property as set forth in the report. Then list the problems identified, attach the documents showing the basis for your conclusions (plat maps, zoning map, tax card, photos, etc. Then conclude that, given the number of significant errors in describing the physical and legal characteristics of the property that further analysis of the reports opinions and conclusions is not warranted and that in your opinion, the report is not appropriate for the intended use. Then sign a certification.

You have answered the question asked by your client and told them professionally this appraisal is a piece of junk and not to use it.

I like a narrative format for this kind of awkward review. You can be very precise about the scope, and get the message across very quickly. You do not have excess blanks and spaces that beg additional work that is not required.

Regards

Tom Hildebrandt GAA

 

[George Hatch]

Lee,

I mostly agree with Tom and Pamela on this one, but I can definitely see David's point of view here, too. Once a template is set up, its easier to write a tough one up well in a narrative format because it is infinitely flexible. Takes less time and reads a lot better. If I were in your situation, I'd write this one up on a narrative.

On the other hand, many appraisers have no experience writing appraisal or review work in a narrative format, and find it very intimidating. Some appraisers don't really even know how to use a word processing program and use appraisal report programs for their letters and addenda. Narrative reports formats can also lead to problems because, as a non-structured format, it's easy to leave out information or disclosures that would normally be included in a form format. If you don't have any experience writing narrative reports, it might be easier and faster for you to write up a review report on a form format and then augment it with the necessary written addenda. If this is the case and time is of the essence, then I have to agree with David's post above; go the form route. Just be aware that none of the review forms we use are completely USPAP compliant without some extra attention by the appraiser. Some are worse than others.


George Hatch

 

[Mike Garrett RAA]

I would do a Form 2000 review...be sure to include a review certification.