ROV that results in a reduction in value

[alebrewer]

I've personally never seen an ROV provided in an attempt to lower a value, but I'm sure that could be a motivation, given the circumstances.

 

[DWiley]

I've personally never seen an ROV provided in an attempt to lower a value, but I'm sure that could be a motivation, given the circumstances.

I have seen lots of lender generated ROVs in situations where the lender thinks the appraiser has over stated the value.
It gets really fun when the lender thinks it is too high and the borrower thinks it is too low

 

[Trihard]

I have seen lots of lender generated ROVs in situations where the lender thinks the appraiser has over stated the value.
It gets really fun when the lender thinks it is too high and the borrower thinks it is too low

Another part of residential appraisals people don't think about. You are immediately as the appraiser thrust into drama bull**** between 2 third parties. I had a lender send me a refi ROV to lower my valuation of a house that was purchased with cash, a year prior. They were trying to get me to say that the borrower paid to much for it with cash. The amount of bull**** that a appraiser has to deal with is off the charts.

 

[NC Appraising]

Without saying or implying anything about the situation described in the OP, I will say that just because sales are provided as part of an ROV process that does not mean that those sales should automatically be added to a report. Remember that one of the certification items is an attestation that the sales used are the best available. Throwing dissimilar sales into a grid just because they were provided is contrary to the certification, and it is opening the door for a complaint based on a false certification.

View attachment 109281

100% agree.

I'll also add throwing in a non comparable sale for bracketing purposes or to include a non comparable sale just because it has a similar feature, amenity or location factor.

If I had a dollar for every time a AMC or a lender asks for me to expand the search or just to include a sale to show marketability. I guess the CU machine starts to smoke and over loads?

I should be in USPAP jail along with most other appraisers for doing the above.

 

[alebrewer]

I'll also add throwing in a non comparable sale for bracketing purposes or to include a non comparable sale just because it has a similar feature, amenity or location factor.

I don't disagree, but when elements of comparison are bracketed, it allows for really convenient analysis. When elements of comparison are not bracketed, the appraiser is forced to utilize alternate means for extracting contributory value for elements of comparison. Bracketing isn't a silver bullet - but it makes the analysis much easier (and most of the time, more supportable).

 

[NC Appraising]

I don't disagree, but when elements of comparison are bracketed, it allows for really convenient analysis. When elements of comparison are not bracketed, the appraiser is forced to utilize alternate means for extracting contributory value for elements of comparison. Bracketing isn't a silver bullet - but it makes the analysis much easier (and most of the time, more supportable).

I like bracketing. I do it all of the time. The sales should be somewhat comparable though.

I still feel going back in time and deriving the adjustments by pairing is the best method. Even if you have to make across the board adjustments.


***I have also noted that due to making across the board adjustments a no no, some appraisers simply leave out the negative feature/factor or does make make any adjustments at all. Or they will use that one non comparable sale with a similar feature.


There is to much of a stigma for making across the board adjustments. I'd rather make an across the board adjustment as compared to using a non comparable sales and having to make 3-6 additional adjustments.


What I find is that when an appraiser uses non comparable sales just to bracket something, it throws the entire report off.

Perfect example is that bias appraisal thread where they included a non comparable sale with a similar view factor. Did absolutely nothing for the credibility of the appraisal, but it made it through UW and probably the CU. They used that one sale with a similar feature....

 

[J Grant]

Absolutely zero idea what you mean by this. My post was made to point out that appraisers are human and can overlook/miss REALLY important data or incorrectly analyze a particular data set. When this happens (and it does happen - quite frequently I might add), then it is incumbent on the appraiser to recognize the error and correct it. This may result in a delta in the MV opinion, or it may not.

Zero idea? Read USPAP.
I agree with you about the above. I can not speak to how frequently -imo if an appraiser does thorough searches, they should not miss a good sale that often. But of course it can happen.
Which does not change the fact that nearly all the owner/RE agent/other vested party "comps" are garbage yet we have to spend a great deal of unpaid time addressing them. This ugly aspect of the field is one that I bet does not show up in PAREA.

 

[J Grant]

There are two different tier sets of sales (comps ) sent as a review or as an ROV -
1) the "comps" pulled by an upset homeowner, RE agent, or other party when the market value opinion is not high enough in a refinance or is below a sale price. These "comps" are often inane - very superior or dissimilar houses sent to hopefully get the value up.

2) the comps that CU might pull or a reviewer might pull. These comps are often not agenda-driven by price, and they might show lower price sales as comps - whether or not we should add them is a different matter.

It is stressful and time-consuming for the appraiser in either scenario. As soon as it happens, even with a decent fee, the appraiser starts losing money due to the exrta time spent ( and can lose a client as well )

 

[alebrewer]

Zero idea? Read USPAP.

Serious question - what is USPAP?

 

[shrubberyvaluation]

Wait - are you implying that appraisers are immune from failing to include the most comparable sales 100% of the time? And/or that an appraiser's analysis is above question?

Neither, we make mistakes, early on in my career I had missed some comps that were input into MLS incorrectly. I have safeguards for this now to decrease the amount of mistakes. Are the comps provided in the ROV actually better? I was just curious if they were actually better or if they were missed.