That's it, three comps is all they get from now on

[Tim Hicks (Texas)]

I have always had the impression that you must dilligently perform an appraisal and use however many comps necessary to avoid underwriter requests. However, underwriters have proven they will always ask for more. So, just send them three, and have the other two ready for their call. Otherwise if you give them five they will ask for two more making it seven and very unreasonable.

I have done 6 duplex appraisals on one street. One investor is buying them all. The first two were hard because there were no sales and the MLS sales I utilized were the only sales available in this small city. The next two duplex sales were simple because I had the closing statements for the the first two and I used the most recent sale from the few MLS sales in that city. Wrong, they asked for two additional sales not owned by the borrower. Fine, I added the two other sales from the first appraisal. Two months later, he is refinancing two other duplexes on this street that he purchased two years ago. Fine, easy assignment. Two duplexes he purchased, one new sale from the MLS and two other sales already utilized before in the other reports to avoid the "please give us two sales not owned by the borrower". Wrong, now this different lender wants two additional sales not owned by the borrower in addition to the five I provided to avoid this request.

They are not getting two more comps. First, I don't have them. Second, it is a frivilous request since I already provided three non-borrower owned sales. Third, they are getting another one of my harsh letters asking for the request from the underwriter on their company letterhead asking why they need additional comps over the five I provided when only three are necessary for my file.

I truly believe that some underwriter requests are stall tactics to delay loan closings. Just ask for two more comps and you get another week. I am trying to find the humor in this situation, but it wll take some fishing.

 

[Soar Ohio]

I know what you mean. I do alot of rural areas and I'm getting sick of request for comps within 8 miles and 200sq ft. They claim that they got these limits from Fannie Mae. The last time I got this request I sent them a copy of the Fannie Mae guide lines (all 40 some pages) and an addendum stating how may report met all the the guide lines. Told the LO that I would not be sending the additional comps and that they were no longer on my approved client list. That was monday and I just got an order from them today.

 

[George W Dodd]

Someone will always ask for the extreme..

Remain calm, take a deep breath, ask them to put the request in writing and if its a investor requirement or a secondary market requirement.

Explain that this unusal request will require additional work not disclosed when the assignment was accepted. The charge will be $XX for this work.

Hey, it's a business. If you were any other professional it is highly unlikely that this additional service is free!

 

[jtrotta]

George

good answer and I like your tone & train of thought - we're on the same track 8O

8)

 

[bradellis]

Tom Titus,

Interesting that you actually admit that you work in rural areas. I thought there were NO rural areas in America.

I say that because I have seen so many reports that are clearly in rural areas but are marked "suburban". It's truly crazy. Had one where the closest comp was 15 miles away. Called the appraiser and asked why he considered this suburban. His response- well you can get to the Walmart in only 1.5 hours.

We have a rule at the bank. If it is suburban- 2 of the comps must be within a mile. Use as many as you like, but give me 2 within a mile.

Sometimes we actually get a report that is marked "rural". As soon as I see it, I know all bets are off as to distance from the subject. Do I ask for more comps? Not if I got some land sales included that support those wild lot size adjustments- don't need them gridded either.

If you take the street scene for a property in a county with a total polulation of less than 15,000 and you cannot even see another structure way off in the distance, would you really expect me to accept that it is suburban?

Had one this week where the nearest comps for this subject on 25 acres were over 50 miles away. What did the appraiser mark for the neighborhood? Suburban.

If it is rural, just say so. Fannie buys them so long as the comps are on similar acreage.

Folks, just paint the picture for the client. If 3 comps do it- no need for more. If there are 12 other sales that are not comparable- just say so. ANY good reviewer will know what you are up to. Now as for reviewers who are not good- well that is another story entirely.

Brad Ellis, IFA, RAA

 

[graindart]

Part of the problem with rural / sub / urban is that it differs from place to place depending on your state's population. I appraise in Montana. If someone from New York or LA were to look at our largest city here, they'd consider it suburban, with 99.9% of Montana being rural. I'll use comps within 10 miles of the subject and still identify it as suburban at times. (usually located on the outskirts of a large town, within 5 miles) And to be honest, I'll rarely find 2 comps that have sold within the past year that are within 1 mile of the subject. Rural areas tend to be greater than 10 miles from a town/city, and usually have larger than average distances and adjustments. Even after spelling everything out, I can't count the number of times I've gotten a request that my comps need to be within 1 mile and sold within the past 6 months. It's a little irritating to have to respond with an addenda sheet that basically says the same exact things I already wrote in the report.

 

[Jo Ann Meyer Stratton]

Graindart:
Agree!! My main county has a populated area in the shape of a T, the leg is 2 miles wide and 10 miles long, the cross bar is 2 miles wide and 35 miles wide. My other county has a populated area 2 miles wide and 35 miles long. Near the down town areas of three towns I mark the subject as urban, everything else is suburban. In some of my reports marked urban the comparables could be anywhere from next door to 35 miles away; which also applies for a subject in the suburbs. All residential properties in both counties are bedroom communities for the copper mine in the smallest county. The residential areas in both counties exist to provide housing for that mine, there are no other industries or commercial acitivity or employment centers so all areas are residential in nature. Agricultural land in the area consists of ranches on thousands of acres of land leased from the federal or state government. Cultivated fields are along the river with irrigation rights. Workers and owners of the ranch and farm ground live in the the populated residential areas, not on the land. Cows graze on the lawn of city hall, parking lots for stores in the down town area are ajacent to a pasture for horses. Walmart, which draws customers from a 150 mile radius, including another state, is in the middle of a cotton field. So no, I did not mark rural on about 99.999% of my reports. My main county (30,000 population) has less than 350 residential sales per year for the entire county. The other county (9,000 population) has 20 or less residential sales per year. So due to the limited number of sales, the comparables will not only be described in milage not blocks, they will be dated and have large adjustments. And all that is described in my addendums. Marking the down town area as "rural" due it is cow and horse would not explain the situation. The reviewer and underwriter needs (HAS TO) to actually read the report and attached addendums and not just use checklists or think in terms of their neighborhood!!

 

[Frederick R. Ruffell]

Tim,
Maybe it is just my clients, or my market (there is alot of data for the most part) but I have filled in the SRIP with only one listing comparable and made a comment that "there were no other relevant comparables". I have also used this for requests of asdditional sales comparables. Rentals never seem to be a problem as I base my rental research more on bedroom count rather than on unit count or property type.

P.S. Have also done this on field reviews that have had additional comp requests.