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reviewing the review

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Renee Borne

Thread Starter
Junior Member
Joined
Jan 5, 2005
Professional Status
Licensed Appraiser
State
Arizona
just got a field review I have to rebut. First thing that jumped out at me it RA came up with a value with only 1 closed sale and 2 actives. So I had to go through his whole report and comment on all the mistakes and then question his value.

I do not do reviews that the lender wants a value if you do not agree with the value in OR. Isn't that an appraisal? That is what I have been taught. If I was to come up with a value I would sure have 3 closed sales.

Am I way off base? This is my first rebuttal and other appraisers I have spoken to don't rebut these things.

am I wrong about the 3 closed sales? I do not know how the RA came up with a value with a comp that was more than 2 miles away that was superior to the subject and used 2 listings to support the value. why not just use 2 closed comps I used and change the adjustments. May be because I was right!!!!

Thanks, just letting off some steam. One appraiser told me this happens when the lender might just not want to fund the loan.
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
am I wrong about the 3 closed sales?
You might be. Someone might be able to develop an opinion based on your research only, or your research supplemented by his or her own.

So you may be reviewing both, their review and their appraisal?

One thing you might try to find out is what instructions and requests the client gave the other appraiser. If I have to review work, it is likely that the first thing I would want to do is see if the appraiser correctly identified the scope-of-work necessary. I would not want to review something assuming what scope was required of the work.

That's not just a theory. It seems like a fools errand to do a line-by-line comparative analysis between two appraisals that had divergent scopes of work.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
Remember to review the 'review' not the appraiser! Don't let personal feelings get into the mix. Sure you may be upset by their actions, but take it the professional way, cut up and slice and dice the review, not the reviewer.
 

Sid Pachter

Sophomore Member
Joined
Feb 26, 2008
Professional Status
Banking/Mortgage Industry
State
Florida
As a reviewer for a due diligence company I cannot comment on the specifics of your dilema as I have not seen your report nor the review.

When lenders send an appraisal report for desk review it is due to issues with the report as noted by an underwriter or perhaps the market vlalue estimate is not within tolerance levels when compared to an AVM.

Generally the reviewer has three options, agree with the value conclusion and explain why and move on, disagree and explain why and if data sources are available to the reviewer the reviewer can provide an opinion of value with comps-both sold and actives, or order a BPO or another appraisal report-depending on the scope of work direction given by the client.

Maybe you should inquire as to why your report was selected for review?
 

Kevin Mc

Elite Member
Joined
Jun 7, 2004
Professional Status
Certified Residential Appraiser
State
New York
Thanks, just letting off some steam. One appraiser told me this happens when the lender might just not want to fund the loan.


That is sometimes true but my guess may be it has something to do with defining markets as stable or declining thus the use of current listings.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
First thing that jumped out at me it RA came up with a value with only 1 closed sale and 2 actives. So I had to go through his whole report and comment on all the mistakes and then question his value.

So you reviewed the review? I think a better proposition would have been to support your original value.

I do not do reviews that the lender wants a value if you do not agree with the value in OR. Isn't that an appraisal? That is what I have been taught. If I was to come up with a value I would sure have 3 closed sales.
You were taught correctly if the intention of the instruction was to teach what the minimum requirement is on a Fannie form.
However, outside of Fannie land, unless there is a specific client requirement, three closed sales (or any closed sales) are not necessarily required.


Thanks, just letting off some steam. One appraiser told me this happens when the lender might just not want to fund the loan.

Renee-
The lender might not want to fund the loan. That's their lending decision.

I'll accept that the review you received doesn't provide a credible value. The best thing you can do (IMO) is to re-emphasize why your value is credible and supported in the market place. Let the decision-maker (the lender) judge the strength/persuasion of your report vs. the review.

Steven hit the nail on the head regarding the review SOW. Without knowing what kind of work was required and completed in the review, it is hard to say if the review is poor quality or not. However, that doesn't mean your value isn't the more credible of the two- which brings me back to my point that the best rebuttals I've seen are those that persuasively argue their original value.

If the reviewer is incompetent or biased, it probably doesn't matter what you write, so nothing will change her/his mind*. But you want to make your argument to the lender. All the lender wants is comfort in the value you've opined and a reasonable assurance that it is credible. Use the strength of your original report to your advantage and build upon it to persuasively advocate your value.

Good luck.

(* If you think the reviewer is incompetent or biased, you may want to consider filing a complaint. Just keep in mind that the state will probably look at your original report as well as the review. :new_smile-l: ).
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Steven hit the nail on the head regarding the review SOW. Without knowing what kind of work was required and completed in the review, it is hard to say if the review is poor quality or not.
It's not often anyone agrees with that.

you may want to consider filing a complaint. Just keep in mind that the state will probably look at your original report as well as the review
That's more of the same kind of thinking.
 

toddmallard

Junior Member
Joined
Oct 4, 2007
Professional Status
Certified Residential Appraiser
State
Georgia
Many appraiser here will not take into considerstion the active or pending sales, cause "we're historic in nature", and that's wrong. the lender wants to know the current market. If all closed comps show $400,000 and all active are listed for $380,000 than the $400,000 estimated value you placed on the appraisal is in-correct.

Well thats my opinion.
 

Carl Reynolds

Freshman Member
Joined
Mar 23, 2008
Professional Status
Certified Residential Appraiser
State
New Mexico
Todd,

You are correct if there is a declining market. This was very true during the S & L crisis. Condos were an easy example. 4 models in a 132 unit complex in Phoenix at the time may have 60 of those units listed for sale. Original purchase prices for example may have been $100,000 to $125,000. Last sales available may have been $90,000. However, the model you are appraising as 20 units for sale with a range in price in MLS of $50,000 to $70,000. 16 are REO's. What is the value? Yep, its a fire sale! In this case the lender wants to know what, when, and were they can get rid of their property at the best price with the least amount of effort and time.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I did a field review on a property a few weeks ago which had a specific SOW. I completed the FR and several days later, the lender sent me the rebuttal from the original appraiser and wanted me to review the rebuttal. I told them that this was a new assignment and that the have changed the SOW and it would require an additional fee. The rebuttal was very long and did not make a whole lot of sence. The lender agreed to pay and I reviewed the rebuttal.
 
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