USPAP Standard Rule 2-1

[App601]

?? Who is "right" ...why does there have to be a right person and a wrong person, a winner and loser in these threads? People offer their viewpoints and opinions .

I agree with your take on it that the wide range of values was dopey. I don't know if this was an invented example or not. There are appraisers (not me and not you ) but there are appraisers who let the software pick the value. I rarely run the software for that function, when I do I run it it is curiosity after I concluded my value- usually they are rather close.

I'm on board for giving most weight to one comp if it makes most sense to do so. Whatever methods an appraiser uses to arrive at their market value opinion is acceptable as long as it is credibly supported in the market and explained. The methods can vary even for one appraiser in different reports depending on the assignment and data.

It was an invented example

The reason that I thought it may be misleading can be explained in this example
An appraiser appraises my house and gives me a range lets say between $100k and #120K and says his opinion of value is $108K . And I may ask him "Why not $115k or $120k? How does this appraiser supports his opinion of value?

In my appraisals if the client asks me the same question my reply would be

Because it is the most similar
Or because it is the nearest

About winners or losers my point is that this is a professional forum and we are here to exchange points of view not to insult one another or question our professionalism. That is my humble opinion

 

[J Grant]

"About winners or losers my point is that this is a professional forum and we are here to exchange points of view not to insult one another or question our professionalism. That is my humble opinion"

This can be more like a "bully tin" board than a bulletin board- overall a good thread !

 

[Michigan CG]

How does this appraiser supports his opinion of value?

Three short paragraphs in the Reconciliation of value explaining the conclusion always works for me.

 

[Terrel L. Shields]

It's the appraiser's responsibility to use some due diligence in identifying the relevant assignment conditions.

Exactly, flawed letter of engagement or not

 

[Terrel L. Shields]

reason i get "stipped" often is because the report is a 2.5 CU score or higher.

That would be an interesting study. Compare the number of stips appraisers get when CU score is above v. below 2.5. If FNMA and FHA required lenders to report the number of ROV's and stips then they have all the data they need to see if pressure is being applied. I suspect Fannie doesn't want to know.

 

[George Hatch]

Given the large rural areas in the nation I would have thought they'd modifiy the application of their ratings in those situations.

 

[App601]

Three short paragraphs in the Reconciliation of value explaining the conclusion always works for me.

I normally do the explanation in the "Summary of Sales Comparison Approach

In the reconciliation I usually write something like this

The final value estimate was based on the Direct Sales Comparison Approach valuation method. It is well supported by the Cost Approach. The Income Approach method is inappropriate due to lack of rental data to obtain a GRM.

So far no lender nor client has objected it or raised any questions

 

[Mr Rex]

That would be an interesting study. Compare the number of stips appraisers get when CU score is above v. below 2.5. If FNMA and FHA required lenders to report the number of ROV's and stips then they have all the data they need to see if pressure is being applied. I suspect Fannie doesn't want to know.

I doubt many of my reports score below 4.0 due to the rural nature of the market and get very few stips because I try to explain and illustrate with the MC data etc. On the few occasions that I have seen the stips because of high CU scoring, its pretty much "Y'all ain't from around here is ya?" kinda response. Chicken salad..., is what it is...NMP etc etc.

 

[timd354]

Given the large rural areas in the nation I would have thought they'd modifiy the application of their ratings in those situations.

How do you know that they have not? I have seen many appraisals of rural properties with low CU scores (2.5 or less) including one in eastern Colorado where the comps were up to 25 miles away and I have seen many suburban appraisals with CU scores of 4 - 5.

 

[timd354]

That would be an interesting study. Compare the number of stips appraisers get when CU score is above v. below 2.5. If FNMA and FHA required lenders to report the number of ROV's and stips then they have all the data they need to see if pressure is being applied. I suspect Fannie doesn't want to know.

The purpose of CU scoring is to identify appraisals that present higher collateral risk. If higher CU scores do correlate with higher collateral risk, then one would expect to to see more stips on appraisals with high CU scores. FYI, we did a blind internal study in which we withheld the CU scores from our underwriters - the results of the study showed that appraisals with high CU scores were declined and stipped at a substantially higher rate than those with low scores (even though the UW did not know the score).