Welcome to the new 1004

[Terrel L. Shields]

Adjustments are based on the effect on price, regardless of what is typical in an area.

Have I ever seen it not justify 'dollar for dollar'? I mean the asking price is raised just exactly the same amount as the concession.

 

[DWiley]

Have I ever seen it not justify 'dollar for dollar'? I mean the asking price is raised just exactly the same amount as the concession.

I have seen that often. I have also seen it have a different effect. I have posted examples before

As I have said before, about 45% to 50% use dollar for dollar. About 45% to 50% base it on what is common for the area. Some of the rest do it correctly. The written stuff on concessions is very clear, but is often ignored.

 

[sputnam]

I assume you’re able to leave a lot of the fields blank or just put n/an or unknown. I don’t think they seriously expect most of that information to be filled out. As appraisers, we do our appraisal inspections to determine the relevant characteristics of the property that pertain to value (I know I read that somewhere). That’s why the inspection is such a critical part of the appraisal process. And many of the items on that form do not pertain to value.

It's best to put something in every field of the form. Could just be 'Unknown to appraiser' or 'Not applicable'. There's no rule that you have to... but, if you don't... some readers will think you forgot.

 

[djd09]

Fannie's form; Fannie's interpretation thereof. They may require a bit more than the minimums in USPAP.

There is also a USPAP reference for normal course of business in SR1-5, the footnote for which goes to an Advisory Opinion #24. That AO cites the SOW acceptability test in the SOWR.

View attachment 91517

fannie forms jargon is not USPAP...but keep trying

 

[djd09]

cert 30....the appraiser better hit the dang number or they will be subject to blacklists, state board complaints, rov's, random accusations of being called a racist, if you are incapable of knowing the number to hit, the unethical stakeholders will lead you in the right direction. now batter up

 

[Terrel L. Shields]

The written stuff on concessions is very clear, but is often ignored.

Pray tell when the "market reaction" is exactly the same "in the market". I mean when do you even see the HUD statement or other real evidence to support your "judgment"? When i was doing FHA years ago (decades now) every FHA sale has $3,500 as a "concession". At least half of those showed the sale price to have been adjusted up above asking prices at $3,500. But what about the ones where the offer was less than the asking price, then bumped up during negotiation? So, listed for $110,000, negotiated down to $105,000 then $3,500 added to result in a sale price of $108,500. The net to the seller remained $105,000. I remember going through a bunch of cheap older house sales (90s) - Most selling for less than $70,000. The average of the HUD financed sales was roughly 10% higher than the ones that were financed by a local bank. At the time FNMA wasn't much of a player in this market here. We didn't see FNMA financing explode until the 2000s. It was mainly in new or nearly new construction.

the dollar amount of any adjustment should approximate the market’s reaction to the financing or concessions based on the​

appraiser’s judgment.​

Well, my judgment is "net to seller" means something and anything else is a false front. So? What is "common" in an area and how do you accurately measure that? Is the net the seller gets meaningless?

 

[Tiffany Gibbons]

100% not accurate.

Adjustments are based on the effect on price, regardless of what is typical in an area. FHA, VA and the GSEs all have the same guidance on this.

Are you a VA appraiser?

 

[Tiffany Gibbons]

Have I ever seen it not justify 'dollar for dollar'? I mean the asking price is raised just exactly the same amount as the concession.

Yes.

 

[Mike Ault]

Well, my judgment is "net to seller" means something and anything else is a false front. So? What is "common" in an area and how do you accurately measure that? Is the net the seller gets meaningless?

Do you subtract the realtor's commissions? If you don't, what does net to seller actually mean?

 

[Tiffany Gibbons]

Umm maybe review guidance on sales concessions again. And double check your data. You know, contact a party to the transaction like one of the realtors. I think if someone decided to review your work, "They all offer a percentage of the sales price." is not going to cut it. And "you only adjust what is typical". Be ready to have the source of this information available, cause that isn't necessarily true.

Are referring to residential appraisals? Cause if you are here is the key verbiage from FNMA "The need to make negative dollar adjustments for sales or financing concessions and the amount of the adjustments to the comparable sales is not based on how typical the concessions might be for a segment of the market area. "
https://selling-guide.fanniemae.com/sel/b4-1.3-09/adjustments-comparable-sales

If you are using a F/F form, part of your SOW is to follow their guidelines.

Over the amount that is typical, you read that incorrectly. We have an undersupply at present (the areas I work). I am using a Fannie Mae (or Freddie Mac) form, but I follow VA's instructions on concessions. I put lots of data about the market area, including statistics, charts, trends, etc. If I make an adjustment, I can back it up. Believe me, it has been different circumstances in every more rural county I do. I have to start from scratch every time to track market trends with these internet rates. It has been a roller coaster. I'm not doing the same house or market every assignment. You have to realize that if I have a question, I can ask VA, I don't have to ask some AMC person. Different RLC's are different. I still don't understand how AVMs will do this better than an appraiser.