Underwriter wants 2 year old condo sale on grid

[Green Hornet]

Fellow formites,

I completed an FHA condo appraisal a while back. I had to expand the search out to 7 miles to find comparables sales in similar locations and bracketed all of the significant features. I included an active, superior listing within 1.5 miles to show the upper end of the current market.

The most recent sale within the project was 5/06 whcih I mentioned in the report. The under writer now wants it gridded out with adjustments. Not a problem for the usual items, however, a time adjustment would need to be made.

He thinks that a two year old sale is more representative of the current market!

It is my thought that this request is outside of the SOW and that I would be happy to comply, however, it would be an additional fee since it is an expanded scope of work and would require additional market analysis.

Would you have included it in the original report? How would you handle the underwiters request? Do you typically provide two years of market data in the report?

Thanks for your input.

 

[Green Hornet]

I forgot to say that this is for a reverse mortgage.

 

[Mr Rex]

Out here in the sticks, sometimes 2 year old sales are the most recent. Whats a c-o-n-d-o? Something like a townhouse?

 

[Green Hornet]

Mr Rex,

Condominium...a form of ownership, not architecture. I am sure you already know that. The three sales I used are within 6 months. No need to go back 2 years to provide a credible opinion of market value.

Thanks for the input

 

[Mztk1]

I'm doing one now with the same problem. I am using the most recent sale from the project as comp #7 (it is 2 years old) and adding comps #8 and #9 which are 2 year old sales from the same projects as comps #1, #2 and #3. This shows the locational differences. Comps #4, #5 and #6 are active/pendings, with one active from my project.

I always feel it is necessary to "ground" the value for your project or neighborhood no matter what. But that is just me, I would not expect everyone to follow the same method.

 

[Mike Phillips]

Fellow formites,

I completed an FHA condo appraisal a while back. I had to expand the search out to 7 miles to find comparables sales in similar locations and bracketed all of the significant features. I included an active, superior listing within 1.5 miles to show the upper end of the current market.

The most recent sale within the project was 5/06 whcih I mentioned in the report. The under writer now wants it gridded out with adjustments. Not a problem for the usual items, however, a time adjustment would need to be made.

He thinks that a two year old sale is more representative of the current market!

It is my thought that this request is outside of the SOW and that I would be happy to comply, however, it would be an additional fee since it is an expanded scope of work and would require additional market analysis.

Would you have included it in the original report? How would you handle the underwiters request? Do you typically provide two years of market data in the report?

Thanks for your input.

I read your post twice - hope I didn't misread anything. Put the 5/06 sale in the grid as requested. Make appropriate adjustments. Place the appropriate weight on the 5/06 sale as you deem appropriate, or NO weight at all - that is your call.

RE: "He thinks that a two year old sale is more representative of the current market!"

Well...you had no problem going 7 miles from the subject development for comps, right? All you had from the subject deveopment was 1 current listing, right? No other comparable current listings located nearby available? Sounds like the 5/06 sale is your best and only in-development comp.

Just do it and get it over with. FYI, I recently reviewed a report done 3/08 where the appraiser included sold comps from '03 and '04, I think, maybe '05 and the appraiser made -0- time adjustments. I think the appraiser's rationale is that the market went up after 2003 and now it has come down and the older sales reflect current market conditions. The subject was a typical residential property. Neither old sale stuck out in the grid indicating that time (or any other) adjustments were required.

 

[Deleted member 77547]

I too would include it. Lately, due to lack of relevant sales, I have included a two year old sale as a fifth or sixth comp, just to show that there are similar homes nearby, just none that have recently sold. Never been questioned or asked to remove it.

 

[Green Hornet]

Jim, Mike and Judy

Thank you for the input. It is most helpful.

 

[Mike Kennedy]

Worth Mentioning as a "dated" comparable .

........then worth gridding first go round.


"Would you have included it in the original report?

Given its' proximity, Yes.

Do you typically provide two years of market data in the report?

Given the "herd" mentality and wide generalizations of OVERALL conditions.....

2005, 2006, 2007, & 2008 data fully supports Market Conditions Assertions in a report. Yes.

Defensive Appraising:icon_idea:

Front load RELEVANT - HIGHLY SPECIFIC, LOCAL, data analysis in anticipation of UW &/or Review comparison with largely erroneous AVM data and close the door behind you.

 

[Ruben Ramon]

Is griding an extra comp worth your client?