Verifying Sales

[DMZwerg]

Well my mom and dad got their RE licenses in '67, dad got his broker license in '70 or there abouts. I had an RE license for a couple of years, my brother for 15 years. Dad, my brother and I are appraisers, dad since the '70's.

Talking to Realtors® is almost never a waste of time and sometimes it's probably career saving.

Don't know what your problem is but I don't want to insult you again so I won't.

His "problem" is that he is seeking a way to defend his position that it is unnecessary to verify sales by contacting the listing & selling agents because if that is what his peers do it would changes his average hours per appraisal from 6 to over 8 per appraisal and thus instead of averaging 8 per week he would be down to 6 per week, a 25% cut in pay.

Before anyone says it does not take 2 hrs to verify comps, consider that the time lost is not just on the phone but in handling interruptions and loss in place from call backs (as you move on to other reports while waiting for the phone) as well as less ability to dedicate "days" to inspections & driving comps. Given he works in a 15-20 mile radius his average appraisal is located 10 miles from him and each drive is 30+ miles, less if you can "stack" inspections in similar areas on the same day. Why do I know this? Because before I got my license I was trained by an appraiser who averaged 10-15 appraisals per week and I know how he maximized his productivity.

Oh, and I am also a RE broker

 

[residentialguy]

Hey DMZ...burnin the midnight oil, huh! Good to see you, bud.

 

[DMZwerg]

If an appraiser feels the absolute need to call agents on every comp employed in the report:

Wouldn't calling the agents before pre-selecting sales to photograph be more beneficial than calling after?

Well, if GLA is an issue then wouldn't you need to call all the agents before doing the MLS search?
Or before pairing things down after selecting all SFRs? :laugh:

Obviously being sarcastic there.

What takes more time and what gives more "accurate" info?
Appraisers search then select comparable sales of comparable properties.
If I do an initial search based on proximity, style & size I have just eliminated a bunch of properties, which is why I often do proximity first, select a few to consider in immediate area, then reduce selections by size & style. Now I have a list of 15+ potentials (sometimes 40+) which I print a list of and mark each one how comparable or not comparable based on relative factors (loc, dos, GLA, year built, site size, type of sale (REO, estate, etc, if listed), and so forth) ... why call before now as I am still paring down? Finally I have a list of the 6-15 most comparable and, from an efficiency standpoint, if a call takes "15 minutes" (some are actually under 5 min, some are well over 15min) and while out inspecting the subject each comp adds less than 5 min time, when would you think it would be more efficient to call, before or after paring the comps down even further?

So, you get back and start typing them in and finish your desktop research on each comp, entering them into the matrix before making your calls. Why?

Well, why VERIFY when you don't know what to ask?
If you don't know #6 seems low, # 8 seems high, and # 4 may or may not have a roof issue and #2 indicates a seller paid how do you know what to ask?

To me calling is usually what I do after doing my initial pass entering all the data and starting to analyze generally and before doing the main write-up of the report, aka the point where you stop, set it aside, and ponder while you do other things (like get started on the next report). Adds 2-3 days to the process, but that can not be helped when doing due diligence & verifying data. (and that is why so many of the CGs and other appraisers m2: in regards to 48hr turn times)

 

[DMZwerg]

That is NEW information, not verification of anything.

I would certainly not verify a potential tenant's application by calling them would I?

No, you are VERIFYING that the pictures in MLS are or are not an accurate representation of the condition & quality of the property, just like you would if a property had NO internal pictures and you were basing everything on the exterior only (or even "group of trees" you saw) during the inspection from the street.

You can verify an "assumptions" as well as just hard "facts".

 

[DMZwerg]

Your point is a good one. Its the "odd" sale that prompts a phone call.

No, I call at least one of the two agents on comps I include in a finished report, the difference being with many I am verifying a rote scripted list of standard things (often half already on the MLS sheet but critical enough that they must be asked, such as "were their any seller paids?" if nothing is listed and verifying amount and when agreed upon if seller paids are listed) including a couple of "fishing" questions on buyer & seller motivations as well as asking selling agent if they were in any of my other comps when showing the buyer properties.
For that "odd" sale I ask odd questions (many pointed, others fishing).
If I have something I feel needs an adjustment and which I either had not encountered before (and thus did a recent analysis for adjustment) or to which due to market or dating I think the adjustment may be different I may do an impromptu poll of ALL agents I call for that report. An example may be septic versus mound system for vacant parcels of 5-10 acres.

I analyze data and do odd reports therefore my calls are likely more "interesting" than other appraisers. When the verification requirement changed I took it upon myself to educate the local realtors and thus mentioned why they were suddenly getting a lot more calls from appraisers ... many commented they had noticed they were getting more appraiser calls than client calls and appreciated the info. That alone raised my response & call back percentage from under 50% to well over 80% in a few short weeks as word got around.

 

[DMZwerg]

Hey DMZ...burnin the midnight oil, huh! Good to see you, bud.

Recovering.
I had taken the holidays off for the most part (really slow around here) then when orders started picking up I hurt myself doing some lifting, so I started using a cane, then a week later slipped a few times on ice pulling a number of muscles in my leg. It was so bad I went offline for better than a week trying to recover (too much pain to sit, stand, or lie down) and passed my orders off to my mentor (couldn't concentrate). Better now, but still carrying the cane just in case. Went back online for 1st time 3 days ago.

As for the "midnight oil", nope, just stuck on a weird sleep schedule I developed while only able to sleep 2 hours at a time, then having to get up, walk a bit, sit, then try to sleep again when tired enough again so I wouldn't screw up my shoulder as well.

This topic grabbing me a bit as I was not seeing many people mentioning WHY verification is important. I still think the best example of why verification (as well as using multiple sources of information) was a SUBJECT property where the appraiser missed that the salvage yard on the other side of the fence was part of the subject property.
I was a trainee back then and when my mentor showed me the report he was reviewing and asked what was wrong with it I jumped on GIS and asked "you mean the salvage yard on the back half of the property?" within a minute or two of him handing it to me (report was on a FNMA form 1004). :new_snipersmilie:

 

[DMZwerg]

I don't know how it is in Wisconsin but here in MA you have options to help verify physical characteristics. You can go to the town assessor's office and look at their field cards and if the town is a bit progressive you can go online and check the field cards. Sometimes agents include finished basement area in the total GLA section and then in remarks section they indicate the GLA includes finished basement. So you check assessor data including the sketches. Here in MA most appraisers don't just use the GLA found on the listing sheet. We check it against the assessor records.

Most MLS sheets here state "county records" as source for GLA info, so that does not help.
Most muni records around here only mention GLA; Milwakee divided by floor but at one time 90% of 2nd floors (for Milwaukee Bungalows) were "100sf" no matter what reality was.
Kenosha County gives ALL heated area as GLA, but then also gives floor-by-floor including basement so you can pull info on everything including finished basement area for anything except some tri-levels (they seem to get confused as to what is basement and what is the 1st floor at times). Except for Pleasant Prairie (up until recently they refused to give Kenosha County ANY GLA info so that was a total blank.

Everywhere else around here you are on your own as to whether GLA includes basement, attic, or 2nd building.


But that is assessor record data and is NOT verified by a party to the transaction (and can be badly dated, especially in some areas). So yeah, one of my rote questions is whether GLA includes finished basement area ... and how they respond sometimes tells me even more about that area (like if ALL properties include it, not just those with walk-out basements as is typical around here).

 

[residentialguy]

I don't know how it is in Wisconsin but here in MA you have options to help verify physical characteristics. You can go to the town assessor's office and look at their field cards and if the town is a bit progressive you can go online and check the field cards. Sometimes agents include finished basement area in the total GLA section and then in remarks section they indicate the GLA includes finished basement. So you check assessor data including the sketches. Here in MA most appraisers don't just use the GLA found on the listing sheet. We check it against the assessor records.

m2:
That is NOT Verification source, that's a data source. Same with MLS listings. Again, you need to pay attention to Fannie's rules.

I'll post this FNMA requirement again.


Sources of Comparable Market Data

Examples of Data sources include:
a multiple listing service, deed records, tax records, realtors, builders, appraisers, appraiser’s files, and the Internet.

Examples of Verification sources include:
the buyer, seller, listing agent, selling agent (and closing documents in certain situations).

There must be sufficient data to understand:
- the conditions of sale
- the existence of financing concessions
- the physical characteristics of the subject property,
- and whether it was an arms-length transaction.



You are required to verify. Please re-read the verification sources above as many times as it takes, until it sinks in.

Are we clear now, skip?

Now, go make some phone calls to the listing/selling agents, buyers and sellers! Pack a lunch...you're on the road to reporting a supported report and it'll take longer than 3 hours. Quality is not about filling in the blanks with the correct format, even though that's what your AMCs would have you believe.

 

[Delta85]

Why would an off the record short conversation with agent verify or trump what is in the written for posterity listing?

What exactly are you verifying? If they were lying in the listing or lying in the phone conversation.

IMO, it verifies nothing really.

I think you are right especially when it comes to condition and amenities. It's doubtful the realtor is gonna get on the phone and say "yeah that MLS listing was way off base the place was a total outhouse."

My main goal when contacting an agent is to try and get concession and any seller motivation details and to get the agents opinion on if this property sold at, below, or higher than what they feel was market value. I also ask about condition and other details but take what they say with a large grain of salt.

 

[residentialguy]

RE: lying in the phone conversation.
I think you are right especially when it comes to condition and amenities. It's doubtful the realtor is gonna get on the phone and say "yeah that MLS listing was way off base the place was a total outhouse."

What are you talking about? They do too. Why wouldn't the selling agent tell me what was wrong with the house??? Even the listing agent will tell me if some work was needed. The house is sold...they have no more skin in the game. They want good appraisals...falsely glorifying comps would only hurt them. I can't believe how biased some of you are against realtors. And no, I'm not a realtor...never have been.