Where Do Appraisers Come Up With Stuff Like This?

[timd354]

Here is a narrative comment from a mortgage lending related appraisal report that I just reviewed:

"there were 22 sales in the subject's immediate development over the past year; however, all of these sales appear to have been under construction at the time they were contracted for sale and, therefore, are not considered to be normal market transactions. Therefore, in order to provide sales that meet the definition of market value, it was necessary to utilize sales from outside of the subject property's subdivision"

 

[Meandering]

Pre-sales,

Pre-printed certification #8 on the URAR.

What's your question?

 

[gregb]

Here is a narrative comment from a mortgage lending related appraisal report that I just reviewed:

"there were 22 sales in the subject's immediate development over the past year; however, all of these sales appear to have been under construction at the time they were contracted for sale and, therefore, are not considered to be normal market transactions. Therefore, in order to provide sales that meet the definition of market value, it was necessary to utilize sales from outside of the subject property's subdivision"

Most sales in nearby new tracts receive offers and are under contract during construction, so this is not a land sale plus a contract to build scenario. Crazy that reason for excluding the 22 sales in the tract. Is the appraiser confused? Fannie Cert# 8 does not apply.

 

[J Grant]

Why is an AMC or lender engaging this appraiser? Low fee perhaps? Supposedly there is an over supply out there this is the person they chose...

 

[timd354]

Pre-sales,

Pre-printed certification #8 on the URAR.

What's your question?

This situation has has nothing to do with Cert. #22, the subject property is in a new subdivision being built by a national builder and none of the sales were the result of combining a land sale with a purchase contract for a house that has been been built or to be built. The appraiser in this case is an idiot, plain and simple.

 

[timd354]

Why is an AMC or lender engaging this appraiser? Low fee perhaps? Supposedly there is an over supply out there this is the person they chose...

This appraiser in this case was getting paid $450 (invoice was attached to the appraisal and the appraiser's fee was disclosed in the addendum) to appraise what should have been an easy cookie cutter in a subdivision with 22 recent similar sales and a couple of other sales of similar properties in a nearby competing subdivision. The lender is a regional lender with its own AMC, but with that type of fee, the fee likely had nothing to do with selecting someone without a clue.

 

[J Grant]

Does all the heat come down on the appraiser for being an idiot, or for the client lack of due diligence for choosing them?

 

[timd354]

Most sales in nearby new tracts receive offers and are under contract during construction, so this is not a land sale plus a contract to build scenario. Crazy that reason for excluding the 22 sales in the tract. Is the appraiser confused? Fannie Cert# 8 does not apply.

You are correct, this is a typical subdivision with homes being built by a large national builder and there are no land sales plus contracts to build involved in this subdivision. The appraiser is certainly confused and is an appraiser that I have already been tracking due to past issues.

 

[J Grant]

good to know an appraiser is getting that fee, but it still begs the question why the lender is using someone who can't understand a land plus spec home sale or a builder sale.

 

[Meandering]

Oh my bad,

I thought I read that I read in the original post that;

all of these sales appear to have been under construction at the time they were contracted for sale

Therefore on the day of the agreement of sale, no completed house existed, so the buyer was purchasing land and the contract to complete the construction.

I'm just a blond.

I believe this says number 8

8. I have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built on the land.

.