I can imagine an underwater taking one look at an entire addendum page with no paragraph breaks, and thinking to himself "screw it..... appraiser to provide explanation of location adjustment for comparable number 3". They don't have time to search through all that nonsense.....
Real world takes that make the most sense.
I had a client ( a large nation wide bank) review my report and state that my adjustments were unsupported. I use Synapse by spark which runs multiple analysis and then i attached their results to my report as support. I also outlined throughout the addendum each adjustment that was applied and referenced which analysis was weighted most. So I am confused, what more is the underwriter looking for?
Well that's your problem, lol. Skip the technical stuff, select recent and local comps, stop confusing the easily confused.
I don't put the raw data into my report for 2 reasons.
1. There is too much temptation to think, "here is the data, you figure it out", rather than taking the time to explain how you arrived at the adjustments.
2. As I have said here many times before, "people have just enough information to be dangerous". Putting raw data into reports...and doing a poor or incomplete explanation of what it means...... results in the reader making their own conclusions of what it means. If you just say, " Spark/Synapse was used to estimate the adjustments", the reader can say, "well I see the data and I say it means something different".
Especially when the program is mimicking mass appraisal methods from an entirely too large too broadly captured data set. Bedazzling charts just don't carry that same air of credibility when there is only a dozen or two dots on the board. Yet, that's a more honest and more true expression of the local market in most cases.
People. Keep it simple. Avoid the stips and extra cost in the first place. Talking about increasing productivity. Takes an hour or two to run a comprehensive workfile, narrow down data, and then when comps are closer matches, you need fewer adjustments in the first place and reports fly right through underwriting.
Perhaps remind the client that 'showing the math' was not part of the original scope of work. And while you would be happy to do that there will be an additional fee of $xx and it will be considered a new assignment
That's why I like to wing it whenever possible with simple rounded adjustments and estimates. Daddy no good at math, unless it's simple and easy. Just like 99% of everyone else whom also is dealing with mortgage lending departments, including the underwriters.
It requires 2 years of data for it to start to calculate. / But you can go 5 years back in time which is beneficial.
Different tools, different results.
Appraising Real Estate isn't an exact science. As I garnered more experience in doing this... I thought that the appraisal should be concluded with a tight range, not an "exact" number. That way, the lender has some wiggle room instead of being handcuffed to a single, solitary, number. I mean....that's what they're doing now with waivers.
Now you stopped making as much sense. Two years? Print out all the broker one pages from a local one year set, flip through and check the days on market trends. This ain't rocket science. Unless the program is incorporating relative value in relation to changing lending rates, total volume of sales turnover in relation to listing quantity, and considering relative impact of a changing concessions landscape... Different tools. Different results. Indeed.
Before you use any method to arrive at an adjustment, you need to understand the methodology. Standard 1 says in part that you must understand and correctly employ recognized methods and techniques. If you don't know how adjustments are derived, perhaps you shouldn't use that method.
Keeps getting better and better all the time. Estimates. Best of ability developmental methods. Multiple available methods and each situation is different. Disclosure of a constant effort for time consuming manual research of extensive MLS data and comprehensive filtering down of data for most narrowly tailored local results. Only one single page of pre written data.
That's how you avoid stips and liability, not buying into fancy unnecessary mass data aggregate focused software. It's just not sexy enough to sell to the masses, which is why so few appraisers talk this way anymore. But such an approach truly captures the core principals of valuation analysis service. 'If you can't do the job with a piece of paper and a pencil, you don't know what you're doing.' Good advice for young and old appraisers alike. If you have a good knowledge of the market, you can type that narrative into reports. And you can express the complex principals in their more simple form, for laymen understanding.
What's really going on here? The CU system is not even close to reliable. Because fast and loose outsourcing focused appraisers and their AMC masters have been polluting the data pool for almost a decade and a half, dropping the 85% majority of all appraisal data into that system, as that is the ratio of lenders whom use AMC's. Appraisers are copying other appraisers shared comps, and the data was filled out by remote typing services and automated programs using unreliable MLS import the entire time anyways. The system was never reliable in the first place. Oh but there is a lot of data, it must have some value, somehow, somewhere, to someone. Don't believe the hype. The housing price data for the entire country is completely polluted with data cancer now. The only way to fix it is to eliminate waivers, hybrids, pdc's entirely and drop the demins back to a dollar.
Sparks. Ha! Quit joking around with the superfluous tech references. Where is this flyer, I know I still have it. Ah yes; TrueTracts; 'Somewhere an appraiser is wasting their life on another avoidable revision. new gse requirements starting feb 4th. ALL APPRAISERS must support market trends and time adjustments with clear and documented analysis. Don't worry we have your back.' And an ensuing data chart example below with two thousand or more tiny dots. Oh yeah because that will help. I'll look at the entire darn area with co mingled bodies of completely unrelated housing which is subject to entirely different market forces to 'come up with a provable trend.'
You know what else is also a workable solution to the new standard? Don't apply any time adjustments. I'm not spending one more gd dollar in this industry than absolutely necessary. Been that way for two decades and never dealt with hardly any of the issues I read about online. Good times. Good times.
I've assembled a few photos of the only tools a competent appraiser really needs. Attached. Listed in prioritized order (to the best of my ability)
