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USPAP 3 Year Sales History

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wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Thought this might be soemwhat intersting to discuss about the three year sales history of the subject and/or comparables utilized in the report.

SR 1-5

(a) analyze all agreements of sale, options, or listings of the subject property current as of the effective date of the appraisal; and

(B) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.

SR 1-5 a states current options or listings of the subject. IMHO I include cancelled or expired ones of the subject in the past 3 years. But in reading this one can read into this if it was cancelled or expired the day, month, or a year before you inspecte the subject you do not have to disclose that because USPAP states "current of the the effective date of the appraisal". What are your takes on this. My personal opinion as stated above is that even if they are expired or cancelled they should be disclosed to the client.

Ryan
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
Most secondary market clients want to know if the property has been listed within the last year when the loan is a re-fi; they want to be sure the borrower is not trying to sell them a house that they were unable to sell on the market. As a practical matter, I give them this information as far back as I can find it.

There is USPAP and then there is what the market wants. If you're going to be the best you can be you have to consider both.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Ditto Steve's comments

I will add this: scope and due dilligence can to some extent be dependant on specifics... I did a review of a high end property that had been marketed nearly continiously for over 7 years prior to that 12 months...
Yup it had been just over a year since the last listing originated....
(or was it under :confused:- can't now recall :redface: )

ANYWAY:
In a review of such a property my review report went way beyond USPAP and the 12 months prior as a supplimental requirment of the client...

But I sort of thought it relevent in making my case why the subject should not on a refinance transaction be valued at significantly above what they had been attempting to unload it for for nearly a decade

Had it been a sales transaction (where at least ONE person thought it was worth that much) it would have been one thing but on a refi?!?!?

Scope may also be internally generated (the step above the competition) OR called for by the nature of the assignment! :ph34r: Slueths R US
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
2003 USPAP
Advisory Opinion 1
pages 124 to 126

Advisory Opinion 22
page 214, lines 202 to 213

The first is to ensure that the appraiser makes the effort to obtain relevant information about current and recent market activity involving the subject property (Standards Rule 1-5(a) and (B). This due diligence effort is consistend with the requirement stated in Standards Rule 1-1(B). "not commit a substantial error of omission or commission that significantly affects an appraisal;"
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Accidently typed capital Bs and got smiley faces--the smiley faces are supposed to be a small letter "b".
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I don't know, folks, but unless I think something fishy is going on, current listings mean current listings & thats all they get. However, if they request further investigation, I'll do it.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
With the new Field Review form 2000, if the reviewer disagrees with the original report, the reviewer is required to provide a three year market activity for the subject and all comparables, if it is available in the normal course of business. So if the reviewer can locate the information, that will be one more strike against the original appraiser in the review. So the simplest thing is to just report the market activity for everything for the past three years and be done. You might learn something very usefull in the process. For example a home that has been marketed for months with an asking price of $105,000. Appraiser doesn't search out the market activity and appraises the property for $115,000. If that reports get reviewed--the original appraiser will have some extensive explaining to do, maybe to the lender and maybe to the state board, and that won't be any fun.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Pam said,

Make it easy on yourself. Report everything you find.
Isn't it amazing how so many appraiser's and lenders try to find loop holes in the appraisal process. If you disclose everything you find, nothing can come back to haunt you. Ex. A common practice here is for a consumer to list their home, not be able to sell it, then decide to do a "cash out" refi. So they take it off the market. I find it quite humorous that they could not sell their home for six months at $130,000, but under re-fi conditions it is somehow worth $$150,000. Now, many appraisers (and loan officers will chime in on this too) will state they don't have to mention the previous listing because it is not current. I, on the other hand, believe that the previous listing has everything to do with current market value. Under review, I have a field day pointing out that the home was listed for $130,000 for six months, but is actually worth $150,000? And no takers? And no offers? It is better to report a previous listing just on these grounds alone. Unless of course, you are a crook and don't care about the true worth of the property. Then you are easy game for me, "the hunter". :sniper: :D :angry:
 
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