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Urban comp - over 1 mile?

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Ron in AR

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arkansas
I know this is a common problem with many appraisers, maybe someone here can help me.

There is a fellow appraiser in my community that will go over 1 mile out of the neighborhood to get comps to "make the deal work". This, of course, makes an honest appraiser look like they don't know what they're doing to everyone else involved.

Does anyone know where I can get documentation on the Urban/one mile rule?

Frustrated,

Ron in AR
 

Caterina Platt

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

The only 'documentation' I am aware of, would be the similar sales within 1 mile that he ignored. The 'guidelines' are not hard and fast rules and can be refuted. But one could not refute the blatant evidence of 3 or more similar or highly similar sales within the same neighborhood that were passed over to attain a higher appraised value. What I'm saying here is you will not be able to submit one document to cover all his transgressions. It would have to be proven on a case by case basis.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Catrina is right. You can have comps over mile in one subdivsion if the addition is big enough. The distance is irrelevant. The key is "did they pass over" more similar sales within closer proximity. I just did a 35 year old home that was guttted and remodeled completely. I had no sales in the addition that were "completely" remodeled, but I did have a sale that was in the next addition. It was 1.2 miles away. However, I did include three sales from the addition and the one from the competing addition to support my condition adjustment (I was still $40,000 below what they wanted and said they had invested). Sometimes you have the appraise the biggest house in the addition. Sometimes you have to appraise the nicest house in the addition. Sometimes the subject property does not fit into the typical market range or typical guidelines. Don't let the "distance: get in the way of objectivity. The question is "did they use the most similar sales from their addition or did they avoid the most similar sales?".
 

Stephen J. Vertin MAI

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Illinois
As with everyone else, I agree. Distance from the subject, isolated in and by itself, is meaningless. There is no distance rule within USPAP. However, if the comparables one mile away are in a superior location as compared to the subject and there was no adjustment for the factor, that is misleading. Or if the locational adjustments are light. That is misleading. What you have provided us with does not tell us much. Were there any other factors?

Steve Vertin
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
There is no distance "rule" in Fannie Mae or FHA guidelines. What every one else has said is very true. The most similar properties to the subject, appeal, location, construction materials, quality, etc are the important factors. That might be next door or 35 miles away in my area. I strongly agree with all the other posters, going out of the area for a property that is superior in every way just to reach the clients estimated value is very wrong.
 

Ron in AR

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arkansas
I was hired to do an FHA appraisal on a single family. The Realtor sold the house as 2100 sf for $101,500. My appraisal shows 1605 sf and came in at $96,000. The agent asked if I would use another comp 1.2 miles away. I had 5 comps to support my value, all within 2 blocks to .65 miles.

The mortgage company and the realtor got together and had the FHA case reassigned to another appraiser that had already agreed to use the comps they wanted him to use. By the way, the comp he was going to use, over a mile away, was one that he had appraised, 1700 sf for $118,000. Get the picture? He had inflated that one already.

He did the "new" appraisal. Deal closed. Everybody is happy and Ron apparently didn't know how to appraise.

I realize that distance is not that much of a factor but when you have 5 comps all in less that 2/3 of a mile supporting one value and one comp 1/2 miles away suporting 10%-15% higher, something is wrong.

It's very frustrating to have your reputation trashed when you've done the right thing.

Ron in AR
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Ron,

I have to ask this question? How did they reassign the appraisal when you had an FHA case number and delivered the report to the lender? If they did, the lender is in big trouble. Report them to HUD but wait until they pay you for your report which will be great evidence that they are playing games with more than one appraiser. You completed the report and one of the Intended Users was HUD as per 4150.2. Forward it to HUD.

If you did the appraisal without the case number, then you got burned by the "shop the deal" lender. Better luck next time.

Ben
 

Ron in AR

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arkansas
Ben, this was an FHA case. I did have an FHA case #. Interesting thing, I have inside information and know that the new appraiser received the same HUD assignment sheet that I did, with the same case # and it was noted as re-assigned to the new appraiser.

Here's something to think about: yes, I got paid for the appraisal, it was a check from the Realtor. They obviously trashed my appraisal and slipped in the new one. Bet the buyer doesn't know.

I was told that an FHA case number stays with the property for 6 months. It appears that the whole thing was manipulated to make it appear that my appraisal was never completed. My report was completed and delivered to the mortgage co.

Any advice anyone has is greatly appreciated.

Ron
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Call your local HUD and find out who to send it to the attention of, then SEND IT TO HUD WITH A TRACEABLE mailing, and letter of complaint, send a seperate cover to HUD directorship or REAC.,etc etc.

:twisted: get 'em :twisted:

Kind of makes you wish tehere was a knowlegable buyer and that you could slip them a (sigh - I know USPAP) copy of your appraisal...
 

TZitter

Sophomore Member
Joined
Mar 11, 2002
Ron,

When you do the right thing you usually get trashed, but you still must do the right thing!

Tim Zitter
 
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