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What is "Time Aspected Appraisal"?

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msdmckee

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Wyoming
We've been holding off on a house purchase, even though we are in what appears to be the last state to be hit (Wyoming).......however, in getting all our finanacing in order the mortgage lady mentioned that the local appraisers were NO LONGER doing time aspected appraisals........what does that mean???
 

leelansford

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Mar 29, 2002
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Certified Residential Appraiser
State
Illinois
We've been holding off on a house purchase, even though we are in what appears to be the last state to be hit (Wyoming).......however, in getting all our finanacing in order the mortgage lady mentioned that the local appraisers were NO LONGER doing time aspected appraisals........what does that mean???

I've been appraising since 1983 and I have never heard the words "time aspected appraisals" used together.
 

Mike Kennedy

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Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
The Time Value of Money .....

Markets appreciate, stabilize, or decline.
Residential Property Values reflect market trends demonstrated by the actions (confirmed sale prices actually paid) of Buyers in specific LOCAL geographical neighborhoods.

Appraisals for residential mortgage lending purposes render Opinions of Value typically based on Market Value absent specific, possibly atypical, discounting, concessions, personal property, cash or items in lieu of cash inducements offered by a particular local seller to a particular buyer. The Opinion of Value is fixed and valid as of a specified Date in Time.

Increasing, Declining, or Stabilizing local property values at the behest of Lenders' instructions, requests, or demands which result in opinions of value which do NOT reflect ACTUAL current value trends for similar properties in a specific LOCAL market has substantially contributed to mortgage fraud during the past 10 years. When done by a Licensed Real Estate Appraiser, such an action represents serious violations of U.S. Federal Laws and State Law in those states which adopted the Uniform Standards of Professional Appraisal Practice contained in Title XI, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

Apparently the "mortgage lady" spoke from her experience with the local appraisers her firm uses.

Recommendation: regardless of which mortgage company or Bank Lender you decide to do business with - hire an Independent Certified or Licensed Residential Appraiser FIRST. When Hundreds of Thousands or your Hard-earned dollars are at stake - the several hundred dollars one spends, in advance to a professional who does NOT have a vested income on how much the property MAY be worth - i.e. loan origination commission or sales commission tied to loan amount or sale price is the best investment one can make. Your investment team should consist of an experienced independent Real Estate Attorney, a CPA, Insurance Broker, Buyers Real Estate Broker/Agent acting on YOUR behalf, and an Independent, Objective, Experienced Appraiser ..............IN the neighborhood.
 
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msdmckee

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Wyoming
Thank you. It will take time to fully digest all of your post. I will work that out. No buyers agents here. A full blown boom the past two years (no affordable housing) which appears to have peaked/past peaked this summer. I can get an appraiser (I hope a good one) when we get serious about a property. Have made a couple of offers, got cold feet and backed out. Have been trying to do most of this on my own and am feeling overwhelmed. WY lags behind the nation in a number of ways and I have been through enough BOOM and BUST to make me wary of 25% to 30% 1 year increase in house prices. They are still figuring out how many more houses the want to build here.......being that WY is a nondisclosure state, are there other ways to figure out market trend? Oh, yeah, have also noticed a few listings with an almost immediate 72 hr first right of refusal on them and on one specific one discovered the listing agent had signed as buyer........listing is still there after almost a month. Does this smell to you?
 

Mike Kennedy

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Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Does this smell to you?


Would seek $$ greener pastures.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
readers digest version:

mortgage lady says appraisers they use (paraphrased)....are NOT delivering "time aspected" i.e. reports indicating increasing OR declining value trends

ie typical "code words" for "our appraisers" are currently indicating STABLE value trends to make their reports more "palatable" to underwriters by not raising "red flags".

note: "our appraisers", "MY appraiser" = "good team player providing good customer service"

possessive terminology typically implies they dont rock the boat nor bite the hands that feed them.

CAVEAT (and borrower) BEWARE!
 
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Marcia Langley

Senior Member
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Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
msd,

I'm leaning towards Mike K's interpretation of what that agent meant. "Time aspect appraisals" has no meaning for me as an appraiser so one must second guess what a sales agent may mean by that.

It sounds like "her appraisers" are unethically failing to take the declining market into consideration in their appraisals. That is very bad news for the buyer (you) and you should find an agent that takes your best interest to heart.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
We've been holding off on a house purchase, even though we are in what appears to be the last state to be hit (Wyoming).......however, in getting all our finanacing in order the mortgage lady mentioned that the local appraisers were NO LONGER doing time aspected appraisals........what does that mean???

Ms. McKee,

During 2005 appraisers worth their salt were using positive time adjustments with the comparable in the Sales Comparable Approach. So if the appraiser deemed the market was going up 22% annually, the appraiser may have reduced this to 1.8333% per month (to keep the math simple.) Hence, a comparable sale PENDING three months prior to the appraisal effective date, and selling for $100,000, per that three month old contract for sale, may have a postitive adjustment applied to it of $1,833 x 3 = $5,500. This would increase the indicated value of this comparable for the subject being appraised to $105,500 baring any other factor.

So I am assuming your conversation with the loan officer included your concerns of the market changing, and how will you be protected from that, or will some unfounded high value be reflected by the appraiser from using old comps? All valid concerns given what is going on.

Well the loan officer made a statement that the local appraisers are not adjusting for time. If I get what was said correctly. So currently they are saying the market is "Stable," versus increasing or decreasing. Here is the hazard Mr. Kennedy and Ms. Langely are pointing out. There is EXTREME pressure placed on appraisers to NOT ever say a market is "Declining." Many lenders will not loan the moment they hear that. So what is going on is many mortgage brokers and loan officer type people are intentionally migrating to appraisers that will not properly analyze the market and say declining when it is in fact declining. Just as in the 2005 market those appraisers should have been making a positive time adjustment in an increasing market, in a declining market they should be making negative time adjustments. But the **** hits the fan if they do it. Many appraisers do not have the stones to do what is right no matter how it affects their business. Sad, but true.

Webbed.
 
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msdmckee

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Nov 4, 2007
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State
Wyoming
Thank you all for your candid responses.

I do feel a bit like I am swimming with sharks after being dipped in chum.

The housing market is one big mess, no matter where you are in this world.

How is it that the one big necessity in our lives, the need for shelter, has attracted such reckless speculation and triggered unmitigated greed?

Are we gonna call this the HGTV mirage?
 

msdmckee

Thread Starter
Freshman Member
Joined
Nov 4, 2007
Professional Status
General Public
State
Wyoming
CLARIFICATION!!!! The swimming with sharks crack was meant in context of trying to buy a house and deal with real estate agents et al........got to thinking, second guessing my last post and wanted to CLARIFY!!!

You all have been most helpful!
 
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