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Those Underwriters

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Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
<_< I have 2 people on vacation <_< so I thought I would go ahead and try a secondary market residential report, been awhile. So I took a hard one from the list. 40 acres + newly remodeled house. Adjustments are 60%, 75% or so :unsure: because there were no similar houses on such a large tract. So I call lender saying, run this past the UW's and see if they will accept it. The adjustments for everything but the land are quite small and 2 of the comps were within 1/2 mi. (quite a feat for a rural property). NO WAY, sez the UW :angry: . He suggests A- go further afield -i.e.- to the far reaches of the county but NOT into Oklahoma which is a couple mile away. or 2) reduce the value of the land until the adjustments come in line. :eek: Uh, you know, lie about it......can you imagine the cheek of such a guy? Of course, you can. You deal with those kind every day :( .

ter
happy to not dabble in the secondary mkt except occasionally :usa:
 

Wally Jones

Senior Member
Joined
Jan 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
"Reduce the value of the land"..................why didn't I think of that?!?!

Have one now that is on 10 acres, 8 of which are income producing citrus grove. The underwriter's suggestion: "Let's just ignore those 8 acres." I missed that principle of appraising..........ignore what you don't want to deal with. Hey, sounds like our UW's attended the same school! :blink:
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Terrell, you UW is being quite unreasonable...... but then again, that is not a job requirement. <_<
On those cases, I use all the single family comps I can find, and let the adjustment fall where they are. Sure they will be high, but it is what it is.
Then I add land sales as comps 7-9. That shows support from my land value adjustments.

With some statements that the adjustments are higher than the "desired" <_< percentage ranges, they are the best available as the subject is unique. Some land sales are included to show justification and support.

Have not had any problems with this method, even from the most hard nozed UW. ;)
 

EDWARD BERRY

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arkansas
TERREL,

You might try to put the surplus acreage down on the bottom line so they can half way understand.

Then throw in a couple of vac land sales.

That at least puts the ball in their court and keeps in compliance will usekrap.

been there-ed
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Dear Mr/Mrs/Ms Underwriter...."Read my lips.....I am the appraiser, I am the one who is licensed/certified/registered. I make the decisions on how to do the appraisal report based on the Uniform Standards of Professional Appraisal Practice (USPAP), laws of the state in which I am licensed, supplemental guidelines and standards as imposed by the various regulatory agencies and corporations who buy loans secured by properties of which I have appraised. I cannot and will not jeopardize my license, livelihood, and freedom to do something as asinine and stupid as you just suggested!".
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
If the report does not fit inside the "box" UWs try to make it fit by "conditioning" it. Hence the "one more comp from anywhere", the "don't appraise anything over 5 acres", etc. You can "'splain" 'till your blue in the face......but if the property doesn't fit their profile, they won't accept it as collateral.
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
Terrel I suppose I have you to thank or blame for my last underwriter battle. I used these comments you posted previously.
--------------------------------------------
This comp is submitted at the request of an underwriter. I give it no
weight and in fact, it may be misleading for the reader unless I disclose
that I ignored the comparable with reason in my original report and
added it only under a request for a "fourth comp" from the lender.
------------------------------------------

From the reaction I received, one would have thought I phoned in a bomb threat to their office......the head honcho in UW called me very upset and considered the comments disrespectful.....it did have a happy ending.....they didn't call me back anymore and the loan closed. thanks :)
 

EDWARD BERRY

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arkansas
What is so sad is that these homeowners need a loan just like other owners.

Talk about discrimination.

Someone in NW Arkansas with 40 acres and any kind of a house has better value that some of the crap in urban areas.

Terrel, the Fed, Land Bank at the last home show SAID they were making this type loan(Yes and I am the queen of England)

Cut 30 acres off to the present owners(by doc not survet and it might work)

Hopefully-ed
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
ED
the Fed, Land Bank at the last home show SAID they were making this type loan(Yes and I am the queen of England)

I hear this too from my subcontractors....I have painted them into a box by teaching them right. I have seen a number of such appraisals. One comp was a large tract and the acreage calculated to $400 an acre in an area where few large tracts bring less than $1,200/ac. The house was in fact a wreck, contributed nothing to the sale, but is was the right price when you figured the land at $400.

The only way to make these work is to jury rig the land value.

Bobby, glad I could help!!!

ter
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Ter,

Don't do it. I may be a stubborn little cuss, and someday it may be the death of me, but I won't bend my facts to suit their silliness. I run into this nonsense fairly often on larger equestrian properties as well. I've run them through with adjustments as bad as 90% at times. What can you do? It is what it is. I spend hours at times writing addendums about the history of my home county and why land values are ranging from $15,000 to as much as $60,000 per acre blah, blah, blah. I've got 'em all stored and paste and copy. When a place sits on x acres of land and comp is x-10, you have a big adjustment. So be it. They're both affected by similar access to whatever support facilities and employment and probably in the same school district. That's comparable. A comp 20+ miles away may not be.

Had an underwriter pitching fits over the net adjustments being over 10% once. Gave her 6 comps and booku addenda. The closing paragraph was something to the effect of '...the imposed guidelines are more stringent than those of typical secondary market financing sources and appear to be designed for urban areas. While this may work well in an urban setting with minimal lots and value variations, these guidelines do not often transfer well into the suburban/rural market setting where wide variances in acreage can be common. In these non-urban settings, it is not uncommon to exceed such parameters, in fact, one must often remember that they are simply guidelines and at times it is necessary to stray from such in order to produce honest and credible appraisal reports. Every effort is made to remain as close to typical lending guidelines as possible without comprimising the integrity and results of this report. The comparables offered represent the best data available to the appraiser at the time of the report.'

No more fussing, value was reinstated and the loan closed.

Just might work??
 
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