Great news for appraisers!

By
Real Estate Appraiser with Appraisal House Texas

I am very excited today because I found out that we NO LONGER NEED TO FIND AND USE THE "BEST" COMPS IN OUR REPORTS!  Nope, it looks like that old, outdated method of choosing the most comparable sales is going the way of the wooly mammoth.  From now on, the only important attribute of a comparable is that it MUST HAVE SOLD IN THE PAST THREE MONTHS.

Think of how much easier our life is going to be now!  We don't have to worry about stupid little things like proximity, or similarity of quality, age, condition, lot size, age, or even size.  So feel free to go off the charts with your adjustments, because that is okay now!  As long as they sold in the past three months, they are automatically now your best comps.

Of course you are thinking, "Mike, you're losing it.  The most recent sales are not automatically the best sales.  That's crazy talk!  Often sales that are older are much more similar and much better indicators of value.  Who would think that a 3,000sf house built last year is the best comp for a 60 year old 1,900sf home just because it was a recent sale?  You just need to make sure that the area has not experienced a decline in values, or is experiencing extended marketing times which may adversely affect the Subject as compared to those older sales."   

That, unfortunately, is 2008 thinking.  You need to bring yourselves up to date!  There is a new paradigm now!  At least according to the underwriters I have been dealing with lately, who refuse to accept an appraisal with 2 recent sales and three over 6 months (but less than 9 months) that were the EXACT SAME FLOORPLAN, and after I had provided extensive data that sales were increasing, sale prices were stable, average cost/sf was stable, etc.  (I've now had this discussion about 4 different appraisal reports with 3 different lenders.)  There I was, stuck in my old ways of picking the most similar comps and providing statistical analysis to show why they should be given most consideration.  All I had to do was stick in 2 more sales that sold in the past 3 months, regardless of size and age differences, and everything was fine and the file was through underwriting!

Fortunately, I am now enlightened to the new ways, and am looking forward to just searching an ever-expanding search area without regard to similarity until I can capture 3 or 4 sales that occurred within the past 3 months.  It will be so much easier, I now look forward to each new day with such enthusiasm I can hardly stay in bed!  No more dreary old research and analysis for me!  Join the wave!!!!

 

PS - For those of you unable to recognize rampant sarcasm when you read it, I am just kidding.  There is no new method, no new paradigm, just me venting a little.  Sorry to have gotten your hopes up... 

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Groups:
Appraisers
Tags:
appraisal
appraiser
underwriting
underwriter
comparable

Comments 34 New Comment

Anonymous #31
Anonymous
Tim in Indy

Outstanding Form! 
Probably require us to pay $100 for another 4 hrs of CE to be able to use it though.

January 28, 2009 08:49 PM
Rainmaker
326,847
Andrew Monaghan
CRS, GRI, EPro Associate Broker
Your Phoenix Home Source

Isnt that how FHA appraisers ahve always worked...

January 30, 2009 08:36 PM
Rainer
3,001
Michael Regan
Deerfield Beach Appraisers

So appraisers should no longer hold back the best comps until the lender calls asking for better comparables than the ones used in the appraisal reports?

February 04, 2009 10:33 PM
Rainer
20,992
Mike Lay
Appraisal House Texas

Michael Regan, that is LOL hilarious!!!!!  So I'm not the only busting my butt to find, analyze, and explain the best comps, only to get a request to "add two more from the immediate subdivision that are more similar in size/age/condition/quality that sold in the past month" than what I already have in there?  Wish I had thought of that to begin with, Mr. Underwriter!! 

February 04, 2009 10:41 PM
Anonymous #35
Anonymous
Lorie Clift

I can so relate to all 37 responses.  I think all people who handle real estate transactions (Realtors, Brokers, Lenders, Underwriters, etc) should be made to take a USPAP class - yearly and test them too.  Perhaps then, they would allow the Appraiser to do the job of appraising the property and selecting the best comparables, rather than coming up with absolute nonsense.  Personally, I will not provide additional information if it leads to a misleading report - I'm sure the same applies to all of you, hence you would not be involved in the writing.

I don't know about all of you, but I got out of the corporate world because I worked for idiots, how the heck did it spill over into the Independent Appraiser world?

I'd like to know who is actually coming up with the underwriting guidelines.  I'd like to see them post the appraisal guidelines on the inter-net for us all to read through - before we begin to work for them.  Let's face it, with the changes our industry is undergoing, many people will be leaving this field of work.  While AVMs might be a useful tool (ha) there is no substitution for an interior appraisal of either type property (residential, commercial).  Eventually, (statistic say) our numbers are purported to dwindle down to less than half of the current appraisers.  Wonder how long some of the lenders would stay in business if they couldn't have our help in the process, if WE decided to have forums of who didn't pay, who attempted to force value opinions, who ask for irrelevant/non-appraisal types of information .  You get the picture. 

While the battles rage on, if the day is slow, don't forget about your liability insurance, they can be a great help with giving good argumental information for these types of problems.  We pay a lot of money to the groups we belong to in yearly dues/fees, get them to help.

Best of luck to you all, keeping up the GREAT work we all do.

 

March 16, 2009 09:39 AM
Rainer
20,992

Mike Lay

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