Verifying Sales

[ucbruin]

So now we're comparing what some may be forced to do because of a lack of response to justify what appears to be others' routine practice?

Under no circumstance should("what some may be forced to do because of a lack of response...") anyone be coerced, pushed, bullied, threatened, cajoled, bribed, etc. to complete a report that is not to his/her personal standards and ethics. No one is forced to use a comp that they did not fully "verify". So should I take away, from your use of the word "forced", that there may have been times that you employed a comp that you were unable to "verify" with the agents? Or maybe hold on to the report for a couple of extra days until the agents get back to you. That's always an option to being forced to employ a comp in your report that you didn't "verify".

 

[residentialguy]

ResGuy,

FNMA requirements have provided all appraisers with a very narrow definition of "verification sources". Can we at least agree that when it come to buyer/seller as a source this is next to impossible? Not impossible but more than likely in the real world, next to impossible. So that basically leaves just the agents. When you are completing a report and you haven't been able to get a response from the agent, for whatever reason, do you refuse to submit the report as complete or do you remove that sale as a comp and employ another sale in its place? And what do you do if the agents for your "best" comp doesn't get back to you? Do you refuse to employ any sale in your report if you haven't heard back from an agent?

You don't always get in touch with the agents...aren't you glad you have 8 comps to cover something like that.

If you need it, at that point you need to look at the comp and make a decision. If it is a middle of the road sale and nothing looks suspect, I'd probably use it.

However, if there's something fishy about it, you'd be better off not using it. (and by fishy, I mean it sold high or low...the concessions don't make sense...the listing doesn't match the descriptions...doesn't match co data, etc.) If you really need it and it looks suspect, then give it a couple more days to try to contact both agents by phone, text and e-mail, or stop in at the house and talk to the home owner. Due diligence is key.

 

[Delta85]

If I have a really good comp and my phone call and e-mail to the agent are not returned I may still use it in my report with a comment in the report that an EA is used in this kind of scenario that the description and data on the MLS listing are accurate and true. Cross referenced with assessor records of course.

But like Res Guy said if it looks fishy or I have a specific question and I can't get an answer then I might pass on it and move on to the next one.

With a 50-60% call back ratio from agents there is no way I could skip every comp I get ignored on otherwise I'd have nothing left but second and third rate comps in my reports. And that's not an accurate reading and analysis of the market area when your first choices have to be benched routinely.

 

[ucbruin]

If I have a really good comp and my phone call and e-mail to the agent are not returned I may still use it in my report with a comment in the report that an EA is used in this kind of scenario that the description and data on the MLS listing are accurate and true. Cross referenced with assessor records of course.

But like Res Guy said if it looks fishy or I have a specific question and I can't get an answer then I might pass on it and move on to the next one.

With a 50-60% call back ratio from agents there is no way I could skip every comp I get ignored on otherwise I'd have nothing left but second and third rate comps in my reports. And that's not an accurate reading and analysis of the market area when your first choices have to be benched routinely.

Delta,

IMO, you have just described the real world of appraising. I'd like to believe that the scenario you provided above, is more the norm than not. Thank you

 

[ucbruin]

You don't always get in touch with the agents...aren't you glad you have 8 comps to cover something like that.

If you need it, at that point you need to look at the comp and make a decision. If it is a middle of the road sale and nothing looks suspect, I'd probably use it.

However, if there's something fishy about it, you'd be better off not using it. (and by fishy, I mean it sold high or low...the concessions don't make sense...the listing doesn't match the descriptions...doesn't match co data, etc.) If you really need it and it looks suspect, then give it a couple more days to try to contact both agents by phone, text and e-mail, or stop in at the house and talk to the home owner. Due diligence is key.

RG,

It seems that we have somehow started to reach some common ground regarding this issue. In several of your past comments directed to me, it appeared that you appraised in a Black and White only world. No "gray" areas. But a few of your more recent comments give me reason to believe that not only do you acknowledge that "gray" areas exists but that you sometimes go there.

Again, I applaud you for calling agents, but can we now agree that some of the comps employed in your reports have not been fully "verified" under the standards and ethics that you have been pushing me on?

 

[residentialguy]

RG,

It seems that we have somehow started to reach some common ground regarding this issue. In several of your past comments directed to me, it appeared that you appraised in a Black and White only world. No "gray" areas. But a few of your more recent comments give me reason to believe that not only do you acknowledge that "gray" areas exists but that you sometimes go there.

Again, I applaud you for calling agents, but can we now agree that some of the comps employed in your reports have not been fully "verified" under the requirements that FNMA and USPAP standards and ethics pushes on us?

There, I fixed it for you. I hope you understand that the difference between reporting the verification results of your efforts and factoring them in reconciliation (what I and many of us do here) vs not trying (what you and many do it quick appraisers do) is due diligence. Again, it has nothing to do with me or my standards. This is FNMA requirements that we all agree to abide to when we accepted the job...which then throws us under USPAP standards and ethics.

 

[ucbruin]

There, I fixed it for you. I hope you understand that the difference between reporting the verification results of your efforts and factoring them in reconciliation (what I and many of us do here) vs not trying (what you and many do it quick appraisers do) is due diligence. Again, it has nothing to do with me or my standards. This is FNMA requirements that we all agree to abide to when we accepted the job...which then throws us under USPAP standards and ethics.

1st, I'd appreciate it if you would restrain yourself from editing my comments; especially to suit your position; not cool.

2nd, I don't recall "EFFORTS" as being YOUR main issue during our back and forth comments. I seem to recall your position being black and white (no gray area); to strictly and rigidly adhere to FNMA's "verification" requirements. To me it was obvious that your position was based on both FNMA requirements and what appears to be the moral high ground; the greater appraisal standards that you've set for yourself (and is some ways for all appraisers); and a sense of superior ethical character.

3rd, and yet, when push comes to shove you, you enter the "gray" world (that you chide others for doing) and then rationalize it by chanting to yourself that you made the effort. And justify it in your report by saying "I called the agents but the agents didn't get back to me, so I employed a sale as a comp that I didn't verify as per FNMA guidelines". From where I sit and after having read your comments, it seems to me that when you're in a pinch, and it suits your purpose and/or benefits you, you appear to be willing to violate the very FNMA guidelines that you so eagerly point out to others and your own personal appraisal standards/ethics. You can't hold the moral high ground because you only occasionally violate FNMA guidelines, even if you made the effort and justify them in your report.

 

[DTB]

A better prepared opposing attorney should have objected to the portion of your testimony regarding contacting "at least 1 participant" as hearsay. Unless of course each of the participants you spoke with were also witnesses who would "verify" your testimony. Or at the very least you had in your work files a notarized statement from the participants dated prior to you submitting the report. . Seriously, in court its about providing evidence to support a witness' testimony and if you couldn't provide any regarding your "participant" statement other than your memory or hand written notes in your file a good attorney should have been all over you.

If you say so.
The judge apparently disagrees with you. And he isn't the first (judge) to find in my favor, with one of the reasons being the level of detail and (...dare I say it...) verification.
Or, perhaps each time I've been on a witness stand, I've been fortunate and faced a "bad" attorney, and they never thought to press your point?

It seems like some (and you) are going to great lengths to try to discount the added quality to the overall report that can be obtained by speaking with market participants and parties to the transactions.

It works very well for me.
I'll let you know if it doesn't work well if I ever have to face a "good" attorney.

The easiest way, IMO, to discredit a report regarding the verification of items would be to put the report down and ask the appraiser what his understanding of the term verification, is.

After it's been established that the appraiser has not actually verified anything, the next step is to attack the statistics. Demonstrate the insignificance of the small amount of data points used if the appraiser references any statistics and the rest of the appraiser's testimony is not deemed credible, without another report even being presented.

I am NOT saying to stop talking to agents, they are a great source of information. Just realize it is information, not verififcation. Fannie speak notwithstanding

 

[ockyappraiser]

Lots of good points here. I have always wondered why some appraisers put a phone call to an agent as the gold standard for verification sources. Many MLS sytems have seller concessions. They have the attached seller disclosures. They have the interior pictures, listing history, tax and deed info. What is gained in talking to the agent? Honestly, can any of us remember what house we appraised last month. . .much less 6 months ago. . or anything about it? When I have called agents the typical response I get is "whatever it says in the MLS". . .did the sale have any concessions? "I don't really remember. . .I'll have to get back to you".

 

[residentialguy]

1st, I'd appreciate it if you would restrain yourself from editing my comments; especially to suit your position; not cool.

Calm down....If I had done this in a sneaky way, I could see issue. But this was upfront - it was the same as saying, no I didn't do that, this is what really went down.

But I apologize anyway...I didn't mean to offend you. I will refrain from communicating that way.

2nd, I don't recall "EFFORTS" as being YOUR main issue during our back and forth comments. I seem to recall your position being black and white (no gray area); to strictly and rigidly adhere to FNMA's "verification" requirements. To me it was obvious that your position was based on both FNMA requirements and what appears to be the moral high ground; the greater appraisal standards that you've set for yourself (and is some ways for all appraisers); and a sense of superior ethical character.

I was stating FMNA guidelines. Dennis then showed the grey area, to which I agreed with. Then clarified it again as to how I address that issue.

3rd, and yet, when push comes to shove you, you enter the "gray" world (that you chide others for doing) and then rationalize it by chanting to yourself that you made the effort. And justify it in your report by saying "I called the agents but the agents didn't get back to me, so I employed a sale as a comp that I didn't verify as per FNMA guidelines". From where I sit and after having read your comments, it seems to me that when you're in a pinch, and it suits your purpose and/or benefits you, you appear to be willing to violate the very FNMA guidelines that you so eagerly point out to others and your own personal appraisal standards/ethics. You can't hold the moral high ground because you only occasionally violate FNMA guidelines, even if you made the effort and justify them in your report.

You don't seem to get it...you need to tear yourself away from gray area. You don't even have a gray area to fall into. You are trying to justify your means by a weakness that might happen to doing the requirements. These are requirements that you need to competent in and need to attempt to fulfill. Sometimes requirements can't be met....when that happens, you disclose that you've tried but were unable, therefore this is what I have and this is how I, as the professional appraiser, handled reconciled it. Now it's in their hands as to whether it is adequate for their use. Everything is spelled out and nothing is misleading. Again, it helps when you have backup comps so you're not placed in that situation.