What Do You Consider To Be Data Sources And Verification Sources?

[Terrel L. Shields]

Terrell said, So you pull them out of the air?

I asked a realtor how many phone calls she got from appraisers in the last six month, verifying sales. She said, "one." She said a few years ago appraisers use to verify concessions and call, but not anymore. The realtors nixed revealing concessions in Oregon ("Its confidential."). I don't think AVMs are calling to verify either.

Our MLS ditto. Mortgage tells me most of what I need to know and most agents won't tell you squat unless they know you. GLB allows fiduciaries (which is what we are according to GLB Privacy Act) to exchange info unless the client prohibits it.

 

[reviewbe]

Scope of work issue. Also, take a look at S.R. 1-4; "In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results." If you can do a credible job using whatever data sources, then you are probably ok. If you don't verify properly, and thereby use bad info to arrive at a result that isn't credible, you have a problem.

And, just because other appraisers are doing it, doesn't mean it's ok. Definition of 'appraiser's peers' is; 'other appraisers who have expertise and competency in a similar type of assignment". If others are doing a job incompetently, doesn't mean you can too.

 

[Elliott]

reviewbe,
So if my peers aren't calling realtors, sellers, or buyers and accepting the information posted from MLS, which is very complete, begin date, contract date, sold date, sales price, financing, (and the information is consistent with public records) and the MLS has no record of funny business, then is that credible or not credible?

 

[NachoPerito]

Technically, via The Appraisal of Real Estate 13th Edition

"Referencing public records and data services does not verify a sales transaction"

"To verify sales data, the appraiser confirms statements of fact with the principals of a transaction"

I understand the vast majority of appraisers do not verify sales by the book's definition, but that is how it is defined in the big book.

And Fannnie Mae's comment on the issue:

Examples of verification sources include, but are not limited to, the buyer, seller, listing agent, selling agent, and closing documents in certain situations. Regardless of the source(s) used, there must be sufficient data to understand the conditions of sale, existence of financing concessions, physical characteristics of the subject property, and whether it was an arms-length transaction.
​

In my market we have an MLS that gives the concessions from the seller as reported by the selling agent. There is little more to be found out on a majority of the sales.

 

[residentialguy]

FNMA makes it very clear, as does AI in Nacho's post above

Data sources are public sources, ie assessor, MLS, Realist, county docs, etc.

Verification sources are people that are part of the transaction that can answer the whys and the formation of the sale conditions....which would be the buyer, seller, listing agent, and selling agent. (their bank on some items, as well). They answer the questions of whether or not something affected the sale price...motivations, undue stimulus, concessions, gifts, financing, etc. Data sources don't have that information.

 

[residentialguy]

reviewbe,
So if my peers aren't calling realtors, sellers, or buyers and accepting the information posted from MLS, which is very complete, begin date, contract date, sold date, sales price, financing, (and the information is consistent with public records) and the MLS has no record of funny business, then is that credible or not credible?

If they are all bloating values, are they all credible because they are all doing it? I think not. What my peers are doing only goes so far. We are required to verify. Requirements are not optional just because your peers don't do them.

Scope of work issue. Also, take a look at S.R. 1-4; "In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results." If you can do a credible job using whatever data sources, then you are probably ok. If you don't verify properly, and thereby use bad info to arrive at a result that isn't credible, you have a problem.

And, just because other appraisers are doing it, doesn't mean it's ok. Definition of 'appraiser's peers' is; 'other appraisers who have expertise and competency in a similar type of assignment". If others are doing a job incompetently, doesn't mean you can too.

 

[reviewbe]

reviewbe,
So if my peers aren't calling realtors, sellers, or buyers and accepting the information posted from MLS, which is very complete, begin date, contract date, sold date, sales price, financing, (and the information is consistent with public records) and the MLS has no record of funny business, then is that credible or not credible?

I'm saying that appraisers should be careful in using the 'peers' defense.

We are probably all guilty of short-cutting verification on occasion. But, frankly, I don't see how an appraiser can be competent or credible if they never talk to anybody. If an appraiser is happy working for AMC's, they can probably get by with the public and published data you suggest. Doesn't mean it is good practice.

 

[Mr Rex]

 

[Michigan CG]

Technically, via The Appraisal of Real Estate 13th Edition

"Referencing public records and data services does not verify a sales transaction"

"To verify sales data, the appraiser confirms statements of fact with the principals of a transaction"

I understand the vast majority of appraisers do not verify sales by the book's definition, but that is how it is defined in the big book..........

The above is what I was taught and have always done. I was taught that information sources were MLS and assessor records while verification was talking to someone.

........................

And Fannnie Mae's comment on the issue:

Examples of verification sources include, but are not limited to, the buyer, seller, listing agent, selling agent, and closing documents in certain situations. Regardless of the source(s) used, there must be sufficient data to understand the conditions of sale, existence of financing concessions, physical characteristics of the subject property, and whether it was an arms-length transaction.
​

In my market we have an MLS that gives the concessions from the seller as reported by the selling agent. There is little more to be found out on a majority of the sales.

I have done reviews over the years and did quite a few lately and it seems in the residential world no one ever notes talking to a person and the assessor records are what residential people call verification. I don't agree with it, but that seems to be the case about 95% of the time.

I have seen justification that all Realtors lie, no one ever calls back, not my job, the MLS photos tell you all you need to know.........

 

[ucbruin]

Verification of which....

Subject....
Or
Sales and listing/pending comps????