USPAP violations? neighborhood boundaries

[Don Clark]

Don,
I am sure that if you filed a complaint, it must have been warranted. The issue of neighborhood boundaries does seem a bit grey to me and can be a matter of opinion.

I say the neighborhood extends to 58th St E and you say it only extends to 50th St E.

In many of the areas that I work, the neighborhood boundries are very clear. Many are not. I assume that the complaint that you filed was a neighborhood with very defined boundaries?

I agree. If it had just been the neighborhood boundaries I would not have filed a complaint. For the record, TAF changed USPAP in 1996 and removed "Neighborhood" in favor of market area. i do appraisals in many neighborhoods that if you described only the neighborhood you would be left with no sales, and a false impression of the subjects market. When I do a report, if the subjects market area is larger than a neighborhood I use the boundaries of the market area, state that in the description of the boundaries, and several other places throughout the report so that the report is not misleading, and that there is a clear description of the subjects market area, a term found in USPAP whereas neighborhood is not. Hell, in 2 counties in North Carolina where I do appraisals, in many cases there is no neighborhood and the entire county is the market area. Maybe one day the secondary market will mature enough to recognize that.

 

[Mike Garrett RAA]

Stuggled with that for years...Neighborhood, Subdivision, Market Area. Here is a tip. My brother likes to use Grade School as a search criteria as it seems to be more representative of a neighborhood. Works well on my MLS, especially when there might be numerous subdivisions within a one mile grid.

 

[Craig Farr]

Cloning is like welding on a gas tank. Either be VERY careful or don't do it.

Asking for your workfile is standard practice for a board when a complaint is filed against you. If your workfile is what it should be, you are home free. No board has time to diddle with you over incorrect neighborhood boundaries.

But your workfile may be your noose. It had better contain DATED evidence of comp search, land value search, transfer history search, data, documentation, and information necessary for your development and conclusion of a market value estimate, as well as a complete and signed copy of the appraisal report. Packing your workfile with print-outs dated long after the effective date of the appraisal will not be looked upon warmly.

 

[BRCJR]

Cloning is like welding on a gas tank. Either be VERY careful or don't do it.

Asking for your workfile is standard practice for a board when a complaint is filed against you. If your workfile is what it should be, you are home free. No board has time to diddle with you over incorrect neighborhood boundaries.

But your workfile may be your noose. It had better contain DATED evidence of comp search, land value search, transfer history search, data, documentation, and information necessary for your development and conclusion of a market value estimate, as well as a complete and signed copy of the appraisal report. Packing your workfile with print-outs dated long after the effective date of the appraisal will not be looked upon warmly.

I can save my MLS searches within the MLS software program. I do not need to print for a workfile, although I do in case their server was to crash. That being said, when I do print, say after the effective date, it places the date I retrieve and print on the MLS printout. I say a board cannot justify, although I am sure they think they are doing so, having a problem with printed out materials that show a "print" date later than the effective date. They cannot prove when I did my search. I may keep my records in any media I choose, so long as I can reproduce that data if need be.

I think boards that sanction an appraiser over the date shown on the material in question my be behind the curve as to the utilizing of technology.

They may not look at it warmly, but I believe they would lose if that made it to a state court of appeals.

Just my opinion

 

[DWiley]

I have encountered many appraisres who are not keeping copies of data from MLS and/or online sources for public records. I strongly advise against that practice - MLS listings and tax records can be changed.

Just a few months ago I printed an MLS sheet for a home that sold for over $9 million. After it sold the listing was modified. The square footage was changed. The room count was changed. etc. etc. Only the copy in my workfile documnets what I looked at.

Also, one of our major providers of online records is well-known for errors. When these are corrected there is no way to verify what was changed and when.

I am all for using technology to its fullest - but we must also recognize limitations in technology.

 

[Hamlet]

I have encountered many appraisres who are not keeping copies of data from MLS and/or online sources for public records. I strongly advise against that practice - MLS listings and tax records can be changed.

Just a few months ago I printed an MLS sheet for a home that sold for over $9 million. After it sold the listing was modified. The square footage was changed. The room count was changed. etc. etc. Only the copy in my workfile documnets what I looked at.

Also, one of our major providers of online records is well-known for errors. When these are corrected there is no way to verify what was changed and when.

I am all for using technology to its fullest - but we must also recognize limitations in technology.

This is good advice. I have run across changed MLS listings also.

 

[Metamorphic]

Cloning is like welding on a gas tank. Either be VERY careful or don't do it.

Asking for your workfile is standard practice for a board when a complaint is filed against you. If your workfile is what it should be, you are home free. No board has time to diddle with you over incorrect neighborhood boundaries.

But your workfile may be your noose. It had better contain DATED evidence of comp search, land value search, transfer history search, data, documentation, and information necessary for your development and conclusion of a market value estimate, as well as a complete and signed copy of the appraisal report. Packing your workfile with print-outs dated long after the effective date of the appraisal will not be looked upon warmly.

I just print everything to PDF. Makes life easier. HDD space is cheep and carbonite back up is unlimited.

 

[stangtime]

Something I've done for the past couple of decades that has helped me catch a lot of typos and errors. Print the report on paper and then go through it with a red marker. It is amazing how much stuff I will catch that way rather than just reading it on the screen. Whenever I have been rushed or have skipped the print, review with marker step, I've found something down the line that I missed. And, yes, DON"T CLONE. Never liked that "feature."

 

[Don Clark]

Back to the original theme

I am doing an appraisal tomorrow of a property in a neighborhood in a market area area of well over 3,000 homes, with at least 11 seperate named neighborhoods. No one, not even the people that live there know where one neighborhood begins and ends. The only way one knows what neighborhood they are in is to look at the legal description. I defy anyone to provide the exact boundaries of any one neighborhood. Streets by name run through several contigious neighborhoods. Fannie Mae's exhortations to not expand the area of the neighborhood to the area from which comparables are selected is all wet. To do so, in my not so humble opinion, would be misleading. The subject competes with the entire market of 11 contigious neighborhoods. From that market one can extract market data and form an opinion of market value. For those who would keep referring to the definition of Market Value in the 1004.....The definition is for "Market Value", not neighborhood value. I fully intend to identify the boundaries of the Market Area, with full explaination.

 

[Webbed Feet]

I am doing an appraisal tomorrow of a property in a neighborhood in a market area area of well over 3,000 homes, with at least 11 seperate named neighborhoods. No one, not even the people that live there know where one neighborhood begins and ends. The only way one knows what neighborhood they are in is to look at the legal description. I defy anyone to provide the exact boundaries of any one neighborhood. Streets by name run through several contigious neighborhoods. Fannie Mae's exhortations to not expand the area of the neighborhood to the area from which comparables are selected is all wet. To do so, in my not so humble opinion, would be misleading. The subject competes with the entire market of 11 contigious neighborhoods. From that market one can extract market data and form an opinion of market value. For those who would keep referring to the definition of Market Value in the 1004.....The definition is for "Market Value", not neighborhood value. I fully intend to identify the boundaries of the Market Area, with full explaination.

Typically, I agree with your posts. But I think this time you've exampled an issue that is out of context with the intention of what was meant by that instruction out of Fannie Mae. First, regarding your example, I might argue that those are not neighborhoods, they are subdivision names. The reason not even the property owners can recognize the dividing lines is due to that. Most neighborhoods are made up of many subdivisions. However, regardless of that, Fannie meant appraisers that do something like take an urban area and try to define a ten by ten mile area of it as one single "Neighborhood" for no other reason than many of these appraisers doing that think if they do that then they do not have to explain why they went into competitive neighborhoods for comps. Nor do they then have to explain the lack of location adjustments.

So the issue(s) Fannie was attempting to address was using "expanded" neighborhood descriptions as a B.S. method of trying to get out from under the appropriate Standard Two reporting that has to be done, and Standard One work as well.