Verifying Sales

[OSU Beavers]

Did NLCApprMgr ever disclose which AMC his bank uses so we can tell him if they are Good, Bad or Ugly?

 

[ucbruin]

- Is MLS error free?
- Does your MLS tell the motivations of the buyer and seller?
- Does your MLS tell why the concessions were involved?

If you answered no to any of those, you have your answer.

1. The only people who truly and accurately know the motivations of the buyer/seller would be the buyer/seller themselves. But I'll humor you by allowing that agents can tell you what the motivations were. I would think what the agents tell you is data/information, therefore it would be your responsibility to obtain "verification" from the buyer/seller. Otherwise, what the agents tell you is only data/information, not "verification".

 

[residentialguy]

The intent of verification is the so that the appraiser uses sufficient care to avoid errors that would significantly affect his or her opinions and conclusions. This supports Standards 1-1. Diligence is required to identify and analyze the factors, conditions, data, and other information that would have a significant effect on the credibility of the assignment results.

and as commented in Standards 1-1
Perfection is impossible to attain, and competence does not require perfection. However, an appraiser must not render appraisal services in a careless or negligent manner. This Standards Rule requires an appraiser to use due diligence and due care.

FNMA has set what due diligence is expected. Your report must clearly communicate your SOW so that it is not misleading.

When FNMA has expectations, you might not be able to met them fully, but you can't just neglect them. That is an appraisal done in a neglect manner which is a black and white USPAP violation.

 

[Lee Lansford]

...ask the appraiser what his understanding of the term verification, is.

After it's been established that the appraiser has not actually verified anything...

One verification source (i.e.) is the County Recorder or other identified source of such information.

Much more frequently than not in the appraisal reports (for use in residential lending) that I come in contact with, few--and I mean FEW--of the appraisers have even a glimmer of understanding what "verification" is.

 

[ucbruin]

You would be surprised at how good their memory is. If you're doubtful, go a step further and verify from the other agent. But you can't throw it away.

As far as concessions go, you need more than the amount. You need to find out how much it affected the sale price. Typically it affects it dollar for dollar on adjustments, but not always. It may be not have any affect...it may have much more affect.


Here's a concession I just ran across the other day. You still want to stand behind MLS? Are you going to adjust $181k on a $184k sale ...or say that's typical for the market area

So what did the agent tell you?

 

[residentialguy]

It was a MLS mistake. (duh) He gave me the correct amount paid and how it affected the price.

 

[ucbruin]

It was a MLS mistake. (duh) He gave me the correct amount paid

RG,

So in your heart of hearts, do you think I would have employed this comp in my report without 1st calling the agent to question the amount?

 

[ucbruin]

The intent of verification is the so that the appraiser uses sufficient care to avoid errors that would significantly affect his or her opinions and conclusions. This supports Standards 1-1. Diligence is required to identify and analyze the factors, conditions, data, and other information that would have a significant effect on the credibility of the assignment results.

and as commented in Standards 1-1
Perfection is impossible to attain, and competence does not require perfection. However, an appraiser must not render appraisal services in a careless or negligent manner. This Standards Rule requires an appraiser to use due diligence and due care.

FNMA has set what due diligence is expected. Your report must clearly communicate your SOW so that it is not misleading.

When FNMA has expectations, you might not be able to met them fully, but you can't just neglect them. That is an appraisal done in a neglect manner which is a black and white USPAP violation.

RG,

I'm posing a sincere question to you so please don't think I'm not. If we were to compare our appraisal process and the only difference between them was that I only call the agents on the odd sales that I may consider employing, would you consider my appraisal services to have been carried out in a careless and negligent manner?

I'm not trying to create an issue here, just asking for your opinion.

Thanks

 

[residentialguy]

RG,

So in your heart of hearts, do you think I would have employed this comp in my report without 1st calling the agent to question the amount?

Of course not. My posting was to illustrate that MLS needs to be verified. The mistakes are not always this blatant...but goes to show that if mistakes this obvious are missed, the less obvious mistakes are surely missed.

 

[residentialguy]

RG,

I'm posing a sincere question to you so please don't think I'm not. If we were to compare our appraisal process and the only difference between them was that I only call the agents on the odd sales that I may consider employing, would you consider my appraisal services to have been carried out in a careless and negligent manner?

I'm not trying to create an issue here, just asking for your opinion.

Thanks

I don't think you are trying to be neglect. But how would the eyes of the court see it? Client required verification. You neglected that order and gave them results without verification (and without explanation) that could have an affect on the appraisal results. Did you perform the appraisal in a negligent manner? My opinion is not the one you need to worry about.