ROV that results in a reduction in value

[CGinMN]

It’s rare but I’ve seen borrowers “strategically” outbid everyone thinking the appraisal will save them and they will renegotiate down, until the appraisal comes back at contract. Oops. That’s where I’ve seen borrower initiated ROVs to lower the value.

The certification states the appraiser selected and used comparable sales that are physically, functionally, and locationally the most similar. It doesn’t state anything about what you may have analyzed but didn’t use. Used = given weight to, in my opinion. I see no problem including ROV sales in narrative or a grid, even if they aren’t deemed among the most similar, so long as it’s explained and weighted accordingly.

 

[NC Appraising]

It’s rare but I’ve seen borrowers “strategically” outbid everyone thinking the appraisal will save them and they will renegotiate down, until the appraisal comes back at contract. Oops. That’s where I’ve seen borrower initiated ROVs to lower the value.

The certification states the appraiser selected and used comparable sales that are physically, functionally, and locationally the most similar. It doesn’t state anything about what you may have analyzed but didn’t use. Used = given weight to, in my opinion. I see no problem including ROV sales in narrative or a grid, even if they aren’t deemed among the most similar, so long as it’s explained and weighted accordingly.

Great post. 100% agree. Although in my market it happens more than one would realize. Just did one. 5 offers at or near 1.9 mill. The winning bid was 2.2 mill. I came in at 1.9 mill. One offer had a 1 mill dp.

I will use less comparable sales in my report just to avoid CU and ROV. Time is money. Add those additional sales to make your life easier

Avoids revision requests. Lender rejections and ROV will still ding your turn time and quality.

CU is getting crazy here lately. Complex properties are making the CU machine to question....other sales were noted in closer proximity...why did you exceed the one mile radius.