sqft in 2055 exterior only

[DWiley]

...in order to do a USPAP compliant exterior only 2055 appraisal report, the appraiser must either personally measure the subject property or disclose the use of the extraordinary assumption that he must have surely used that the GLA in the public records or some other data source is accurate. Failure to clearly and accurately disclose this assumption is a violation of Standards Rule 2-1(c).

The assumption in this case would be that the public records are correct. However, that is an assumption made in many assignments (see item 13 on Fannie Mae forms). Hence the assumption is not, "...directly related to a specific assignment.." and does not meet the definition of an Extraordinary Assumption.

 

[timd354]

The assumption in this case would be that the public records are correct. However, that is an assumption made in many assignments (see item 13 on Fannie Mae forms). Hence the assumption is not, "...directly related to a specific assignment.." and does not meet the definition of an Extraordinary Assumption.

So, if i have appraised 10,000 similar properties with a similar scope of work and have used the same assumption to perform the appraisals on 2 of the properties, but not the other 9,998 properties, then it is not an EA, since it would not be specific to either of the 2 properties where I used that assumption?....obviously that makes no sense.....but where does an assumption change form an EA to just an ordinary assumption...when it is used sometimes, or when it is used a significant amount of the time, the majority of the time, or virtually every time?

The definition makes no reference to whether as assumption is used in one assignment, some assignments, many assignements, or virtually all assignments. If I am appraising 123 Main Street and I use an assumption in order to develop and report an appraisal on that property, that assumption is directly related to my appraisal of 123 Main Street whether or not I have used that assumption in performing no other appraisals of similar properties, some other appraisals of similar properties, or virtually all other appraisals of similar properties.

I agree with you that USPAP should define the term "Extaordianry Assumption" specifically to mean what you contend it means, but, unfortunately that is not what the definition actually states. I would say that maybe this deifnition in USPAP was not drafted as carefully as perhaps it needed to be.

 

[Mike Kennedy]

http://commerce.appraisalfoundation.org/html/USPAP2008/FAQ/faq_108_.htm

Advisory Opinion 2, Inspection of the Subject Property advises that if adequate information about the relevant characteristics of the subject property, such as an interior inspection, is not possible by personal inspection or from sources the appraiser believes are reliable, an appraiser must withdraw from the assignment unless the appraiser can:

• [FONT=Arial, sans-serif]modify the assignment conditions to expand the scope of work to include gathering the necessary information; or[/FONT]
• [FONT=Arial, sans-serif]use an extraordinary assumption about such information, if credible assignment results can still be developed[/FONT]

I agree with Tim "extraordinary" not ordinary.

 

[DWiley]

if adequate information about the relevant characteristics of the subject property, such as an interior inspection, is not possible by personal inspection or from sources the appraiser believes are reliable,...

I agree with Tim "extraordinary" not ordinary.

Why? The quote you posted form AO-2 says an EA must be used IF info is not available from reliable sources.

 

[Mike Kennedy]

POST 97. Requires either declining the order - or EA.

EXTRAORDINARY ASSUMPTION: an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions.

Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

DW - ALSO MLS & assessment records typically do not address "legal" H&BU AND often double GLA by inclusion of finished basements..illegal additions, conversions etc.

 

[DWiley]

DW MLS & assessment records typically do not address "legal" H&BU AND often double GLA by inclusion of finished basements..illegal additions, conversions etc.

Of course MLS and public records contain errors. All databases contain errors. That does not stop them from being used as data sources.

Question - How is obtaining the GLA from public records any different than obtaining the site size from public records? Do you guys measure site size yourself, or do you use data obtained from some other source?

 

[timd354]

http://commerce.appraisalfoundation.org/html/USPAP2008/FAQ/faq_108_.htm

Advisory Opinion 2, Inspection of the Subject Property advises that if adequate information about the relevant characteristics of the subject property, such as an interior inspection, is not possible by personal inspection or from sources the appraiser believes are reliable, an appraiser must withdraw from the assignment unless the appraiser can:

• [FONT=Arial, sans-serif]modify the assignment conditions to expand the scope of work to include gathering the necessary information; or[/FONT]
• [FONT=Arial, sans-serif]use an extraordinary assumption about such information, if credible assignment results can still be developed[/FONT]

I agree with Tim "extraordinary" not ordinary.

Mike,

I am sure that Mr. Wiley would not dispute what is stated in AO-2 and I would certainly not dispute AO-2.

The difference in my opinion and Mr. Wiley's opininion does not center around a case when the data source relied upon is not believed to be reliable....our differening viewpoints comes up when the appraiser relies on a source of data that is believed to be reliable:


I believe that even if the source of the GLA used in an exterior 2055 is considered to be reliable (whether from the public records or some other source), I still think that the use of the GLA from that source in a exterior-only assignment requires the use of an EA as that term is defined by USPAP.

Mr. Wiley apparently does not share this view on the matter. Now, I do agree with Mr. Wiley to the extent that I concur that the term "EA" probably should be defined in such a way to mean what he says it means....but that is just not what the definition actually says IMHO.

 

[timd354]

1233456789010329132985312

 

[Mike Kennedy]

DWiley; "Of course MLS and public records contain errors. All databases contain errors. That does not stop them from being used as data sources."

Therein lies a HUGE part of the reason Values were artificially inflated as AVMS & BPOs achieved equal status as "non-appraisal" appraisals within the past 10 years (especially the past 8).

I suggest simply because they have been allowed to effectively replace 50%, or more, of traditional appraisals with interior inspection and hands-on measurement and ostensibly saved consumers and users $Billions became popular does not make their use in residential mortgage lending it reasonable, credible, nor right.

One example, of which there WILL be thousands more, is the concurrent thread by an Appraiser receiving a Demand for Payment from an attorney representing a consumer seeking damages for a Value Opinion based upon his 2055E utilizing MLS & assessment GLA of 3900sf v a prior appraisal citing approximately 500+/- lesser GLA based upon physical measurement. (true, all 3 MLS, assessment, and prior GLA estimates may all be incorrect). The only way to resolve that issue FROM THE OWNERS perspective is physical measurement by a competent Assessor, B&Z Inspector, or Appraiser. This case clearly demonstrates at least One Consumers' opinion of reliance upon "guestimates". We will see many more posts on this issue.

As noted above, MLS & assessment records routinely include, OR fail to note, finished basements and/or converted garages, enclosed porch conversions, &/or additions which may, or may not, be legally permissible uses.

I suggest that it is within the scope of appraisal license for an Appraiser to address these specific elements when either on-site, ""from the road", and during due diligence. Readily apparent variances between visual observation, MLS, assessment, prior appraisal GLA estimates should result in upgrading the assignment - or declining it.

In this thread, there are no readily available data sources per OP remarks. Upgrade or declination are the only credible options.

I suggest it is not within the scope of appraisal license for an Appraiser to be a Surveyor. It is Standard Appraisal Practice to rely upon either surveys, metes and bounds, and/or tax plat maps, and Topgraphy and Flood Maps etc. to estimate Lot Area, Utility, External Obsolescence and other factors. An Extraordinary Assumption applies to their estimated reliability.

 

[JSmith43]

Look, you can make this right for far less than $86,000. Given the desperate situation most builders find themselves in, I bet you could find one that would add 485 SF to the house for $50,000:icon_mrgreen: