TAF and USPAP - great analysis

[Dublin ohio]

I think I decided 'paired sales' weren't all they were cracked up to be about 1993...
That's when I discovered MLR and Sensitivity Analysis. SA was quicker but sometimes complex items could be estimated using MLR.

Most of the time when appraising in "cookiecutterville". When you only have to account for 3-5 variables. Unless there is a dearth of sales. The paired analysis pretty much jumps out at you. YMMV

 

[Terrel L. Shields]

In 1993 you probably only had like 5% of the information we have about properties today and the information was not even easily searchable.

Well, we did have a quarterly sold book and our assessor's records were up to date, but we also stopped and called people and with a phone book you often could call the seller at least and talk on the land line. Most people were willing to talk some got upset but we did get info there...and the regulators and UWs were less aggressive. FNMA was not a big factor in our market in 1993. By 2001, they were much larger.

 

[Terrel L. Shields]

When you only have to account for 3-5 variables. Unless there is a dearth of sales. The paired analysis pretty much jumps out at you. YMMV

But sensitivity was equal to that task as well. Outbuildings and the like, depreciated cost or pairing worked.

 

[Fernando]

What is the "most similar"?

Real competent appraisers can seer "most similar" comps.
They can spot the bad comps chosen by incompetent appraisers.
When I'm driving by the comps, the really good comps stick in my head and I start seeing how my report looks with those comps.

 

[Fernando]

probably 5 or so year ago, Solidifi called me up and said if I lowered my fee $50 they'd send me so much work that they would be the only client I'd ever need. They liked the professional service I provided, but they wanted it cheaper. When I declined (not just for the obvious reason, but who only wants 1 client?), they sent me a couple more jobs and then nothing since.

That's a good summary of what the business has become.

Solidifi found another cheaper appraiser willing to do $50 less with promise of more work.
Hope your fee wasn't that low to begin with.

 

[RCA]

Please point out the post where I made any reference to paired sales (or any other specific technique).

When I look at reports performed near the same time but with a 50% difference in value conclusion for the same property (which I have done numerous times over the past 15 years), the most common finding is that one of the appraisers ignored the most similar comparables sales, choosing instead to use the sales that are very dissimilar and then failing to adjust for differences in location, quality, condition, etc. in an appropriate manner.

If one is appraising an older, non-renovated home, then it is easy to jack the value up by choosing nearby renovated homes and ignoring the fact that they need quality and condition adjustments. That is a problem in executing the methodology, not a fault of the methodology itself.

This is the problem Mr. Wiley: Your organization does not have a published standard for similiarity, - or even a useable definition. I am pretty sure that any definition of similarity you could come up with - I could find fault with on certain properties I have encountered in the SF Bay Area. If you think you can come up with some standard that would clearly define when 6 out of a 100 possible comps are the most similar to the subject, - please share it.

IMO, the GSEs do not have the organizational intelligence to develop any useful standard. They could obtain it through better leadership, i.e. firing and hiring the right people, promoting the right employees. Your own employees tell us the truth here through websites like Glassdoor.com: The GSEs are inefficient organizations built around politics, favor for favor decision making. They are corrupt and they don't serve the public well.

Just keep spouting this nonsense; change may happen sooner rather than later.

 

[Fernando]

I use the Fernando's standard by comparing subject's condition subjectively with each comp's condition. I look at the MLS photos and make custom adjustments regardless if I put C3 or C4. Can computers do that?

 

[George Hatch]

I've been saying for years that Fannie/Freddie should develop "sample" reports for different property types showing which addenda and order and level of detail they consider sufficient for their usage. Post the PDFs up on their website and invite appraisers to emulate. That's no different than when an appraiser calls the reviewers and asks how to approach a specific problem.

Boilerplate abuse will still occur but at least they'll be able to get more consistency in the report formats from the appraisers who are paying attention.

 

[Fernando]

I've been saying for years that Fannie/Freddie should develop "sample" reports for different property types showing which addenda and order and level of detail they consider sufficient for their usage. Post the PDFs up on their website and invite appraisers to emulate. That's no different than when an appraiser calls the reviewers and asks how to approach a specific problem.

Boilerplate abuse will still occur but at least they'll be able to get more consistency in the report formats from the appraisers who are paying attention.

Some appraisers unfortunately are not that competent. Licensing didn't help.
They need constant hand holding and a "sample" report will help them. Give more guidance for those who don't know how to appraise.
Just like worthy USPAP having one section for so and so type of appraisers and many examples in explaining their concepts
USPAP should have been simpler and shorter which competent appraisers would easily have understood.

 

[George Hatch]

Having some legitimate samples out there to emulate could prompt the underperformers to add more and ALSO clue the overperformers into where lies the point of diminishing returns. Save them time and effort without compromising the IRL utility of their workproduct within the context of the intended usage.

One reason some appraisers are paranoid about their quality is because nobody knows for certain what exactly passes for "adequate" in the eyes of the users.