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This needs to be seen by as many Realtors as Possible! Closings MAY be delayed if word does not get out!

By
Real Estate Appraiser with Lanier Appraisal Service CR004373

Pass this along to every Realtor you know. Re-blog this post, whatever you can do to get the word out!  

As of September 1, 2011 appraisals will change drastically. We now must complete appraisals in what is defined as UAD or Uniform Appraisal Dataset format. This is a GSE Fannie, Freddie requirement. 

What does this mean for you? The new reports will look foreign to you and your clients with all the codes we have to use in the reports, so you will have to be versed on what the codes mean. Instead of the old days where we described a property as being Good in condition or Good in Quality of Construction, we will now be using codes such as Q=3 and C-2, etc. It will be far less user friendly to read and more automated system friendly. Fannie and Freddie want consistency across the board for all appraisals nationwide and the codes are   the way they are trying to get this accomplished. They have clearly defined what Fair, Poor, Average, Good, Very Good and Excellent Quality and Condition should entail. No more leeway in how appraisers determine this on their own. Lenders are also gearing up for uniform delivery of their loan packages and the UAD is part of this whole process.

If you GOOGLE UAD or Uniform Appraisal Dataset you should find a wealth of information on this topic. Be prepared and prepare your clients! 

What do we as appraisers need from you? One of the big changes is we must know in what YEAR any renovations to the BATHS and KITCHENS were completed. In addition to the comments you already place in FMLS/MLS about renovations, we need the renovation year for the kitchens and baths. If the exact year is unknown then we need a specific range, ie: less than 1year ago, in the past 5 years, in the past 10 years or in the past 15 years. 

If we cannot get this information in FMLS/MLS for the SUBJECT we must contact the owner if available or the Realtor and get this information and this takes time and mayt also delay closings! For all the comparable sales and listings that we use in our reports, we of course cannot contact the owner, so we will be contacting you the Realtor unless you have this information in your comments and photos.  While we do NOT have to indicate year of renovations for the comparables, we really need this information in order to properly compare them to the SUBJECT. So any listing you have, please include as much detail about renovations as possible!

What else do we need from you? We need photos! Lots of them, more the better. Photos of the renovations and if you can add descriptions under your photos, please include the YEAR the renovations to kitchen and baths were completed or use the range noted above. Also needed is extent of renovation! Was it a REMODEL  or just an UPDATE. For appraisal purposes a Remodel means a significant change, Gutting of the bath or kitchen, all new fixtures, flooring, cabinetry, appliances, etc. VS. Updating which brings it to current market appeal and standards without a total REDO! New Paint, Some new fixtures, refacing of cabinets, etc.

We must have this information included in every appraisal report. So if all Realtors add this information in the comments or under your photos, life will be easier for all as the appraisal will be completed SOONER and the deals will closed faster. Win/Win for everyone! Not to mention, the homeowner needs to get full credit for renovations and when they were performed!

** FOR THOSE OF YOU WHO PROVIDE GREAT DETAIL AND PHOTOS IN YOUR REPORTS, APPRAISER'S AND OF COURSE THE SELLERS THANK YOU!

I hope this POST is featured as we have to get all Realtors on board with this ASAP! So please pass this along to your Brokers too and let me know if you have any questions.

In Future Posts I will define in more detail the codes (which will look foreign to everyone for awhile) and what they mean and how they are defined in our reports

 

Thanks guys! 

 

Mary Thompson

Certified Appraiser

http://www.lakelanierappraiser.com

 

 

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Comments (161)

Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia
Violetta: I beg to differ with you on so many counts. If Agents who may stand to gain in the transaction one way or the other provides a value for the property this is a clear conflict of interest. But even if you have no vested interest ie: you get the listing, BPO's are not appraisals and Realtors are not appraisers. Yes you may know the area well but Realtors do not know what kind of adjustments to make for the differences in properties. I can't tell you how often agents call me to ask what a finished basement vs. an unfinished basement brings in the market or a 3 bed vs. a 4 bedroom etc. Also agents don't measure the home and many times tax data is way off in proper square footage. I also disagree that upgrades do not bring higher sales price. In most every market upgrades and renovations bring higher dollars. If not investors would not be wasting their time renovating homes. Plus countless sales prove your thinking wrong. Don't know where you are from but trust me you dont want to rely soley on BPO's as they are too general, they don't take into account many factors that are imperative for lenders to make sound lending decisions. They are not good when it comes to complex properties. Bottom line if BPO's were to replace appraisals God help the banking industry! Realtors are excellent for buyers and sellers and should not cross the line to try to be an appraiser. Same thing holds for appraisers. We need not try to be Realtors! We compliment each other and that is how it should remain.
Aug 14, 2011 09:44 AM
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

yes, this one is also getting a reblog! Thanks for getting this information out to all of us!

Aug 15, 2011 01:40 AM
Deepak Chauhan Asso-Broker, MLO
Versailles Property - Irvine, CA
Your Solution-Oriented Realtor

I am going to reblog this one, good info. Thanks

Aug 24, 2011 04:40 AM
Barb Van Stensel
Chicago, IL

Excellent post and love your comment at #144!  This actually doesn't scare me at all because most Realtors do not understand the appraisal process.  My background is in appraisal for some 20 years but jumped for sales as I so too like representation for the sellers and buyers. 

In Michigan, the appriasers have to get the facts and need to check with county records in order to gain more information and do check with the Realtors on the sold comparable properties. 

In Chicago, that just doesn't happen and while I reached out to Realtors for comp info refinancing and sales, most did not.  To read a comp that says high upgrades and then when I would check with a Realtor, yesterday, re showing a home, the "high upgrades" were new carpeting, instock HD kitchen oak cabinetry with laminate countertops when the market supports much higher.  That's updating and not rehab and that's where we have had some problems in financing.

I have always taken phtoos of my properties and made all my clients do the before, during and after especially video when they go to resale, just in case there are questions down the road. 

Reblogging!

 

Aug 24, 2011 05:14 AM
Karen Burket
Bank of Oregon a division of Willamette Valley Bank - Medford, OR
Valley Mortgage Grou, Conventional, FHA, VA, mortgages

Great information!  A reblogging we will go!  :)  Thanks Mary for taking the time to provide such detailed information.  Enjoy the day! 

Aug 24, 2011 07:06 AM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Karen

 

Thanks I will be writing another blog, now that I have produced a few UAD compliant reports. Some issues here that people need to be aware of. More importantly the underwriters reviewing these reports.

Have a good one!

Aug 24, 2011 07:54 AM
Nick T Pappas
Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Mary, I'm here via Karen's reblog of this post.  I also used to be an appraiser in Illinois so I get much of this info emailed to me.  I was talking to an appraiser in my office building today about much of what you discussed in your comment #144.  Just curious...will any of this affect the costs of appraisals?

Aug 24, 2011 12:25 PM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia
Hey Nick I am from Chicago originally! As for costs of appraisals. Probably not. Lenders not too open to higher appraisal fees after they went up due to HVCC. Time will tell!
Aug 24, 2011 12:47 PM
Donna Paul
Keller Williams Realty Gold Coast - Dix Hills, NY
Long Island Home Specialist,All About Real Estate

thanks Mary, for going above and beyond getting us this information. I will make sure to re-blog it and pass the infomation around.

Aug 24, 2011 01:32 PM
Reba Haas
Team Reba of RE/MAX Metro Eastside www.TeamReba.com - Bellevue, WA
Team Reba, CDPE

I can see a major benefit of this new set of rules and that is in our discussions with sellers who are considering putting their home on the market, we'll have a new tool to give a "reality check" to those folks who think their home is as valuable as the one down the street that had a complete remodel and their's hasn't since it was built in 1961.  We talk often in today's market about how sellers often overprice because they're still stuck in 2006 or 2007.... "my house USED to be worth this much!". Well, it's not worth that much today, and it's worth even less if you haven't updated or maintained it.

Thanks for the head's up - I'll be informing my entire team about this change....

Aug 25, 2011 04:54 AM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Reba

Absolutely Excellent points. For sure many are stuck back in the good old days. Narrowing down exactly when these updates were made will force us to look more closely at how the subject compares to others, ie: subject had recent renovations, comps had them but 10 years ago. Or as you state, subject has no renovations and comps do, which of course we always did make adjustments for in this case, however the time line is more precise now on renovations. The other thing is UPDATES vs. REMODEL or Renovations. There is a big difference.. Thanks for passing along, and don't forget those PICTURES... They really will be worth a thousand words!

 

 

Aug 25, 2011 05:33 AM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Hey it is now officially Sept. 1st, I am re-blogging it today to do my part, too.

Sep 01, 2011 03:53 PM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Michelle:

 

Great thanks keep it going. Another thing we will need is details on basement finish. They want not only beds and baths already in FMLS, we need to know the other rooms, ie: rec room, theater, family room, etc. So in your photos or in your comments, add what you can in this regard. It will reduce calls!

 

I am going to reblog about this over the weekend

 

Thanks!

Sep 02, 2011 12:33 AM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Mary,

i came from the reblog by Missy Caulk. Here is what I left in the comment "

Can't get rid of the feeling that there will be even more frustration. The system based on information to be provided by the Seller/Owner will start spinning the wheels the minute we deal with short sale, where the sellers do not want to remember, and people in foreclosure...

So. what are appraisers going to do when they can't get the answer? I think it is a stupid situation, when the job the appraiser is given depends on the information which they may not be able to get."

Sep 05, 2011 03:16 PM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Jon: I hear you, there will be many times when the information is hard to obtain. In that case we have to enter unknown and use our past experience to determine based upon our inspection if it appears that there has been any updates or remodeling. There are many times in an appraisal where assumptions have to be made.

 

I think where this whole requirement is coming from is to put even more onus on the appraiser to TELL the TRUTH about what has or has not been done on the inside of the home. Again, we have to rely on the homeowner or Realtor and we are not at the point of getting Receipts for the work, God Forbid! 

So as an appraiser, guess what? I am going to CYA myself on these reports and state that this information is deemed to be true based upon third party information but not guaranteed. Sound Familiar?: That is what Realtors include in their listings to CYA

 

But the good news is this: This will allow us to give more credit where credit is due. If we know that renovations were performed in the last year vs. 10 years and what they were, we are justified to give that  property more credit. 

So please add renovation/update information all your listings and if you don't have the information we will take it from there.


Sep 06, 2011 01:51 AM
Christine Selzler
Realty International LLC - Davenport, FL
Realtor, Davenport Florida Homes for Sale

This is important information to have. I am glad I found this post. Thank you for sharing it.

Sep 20, 2011 11:39 AM
Daniel H. Fisher
www.FisherHermanRealty.com (704) 617-3544 - Charlotte, NC
MCRP - Charlotte Real Estate, NC or SC

This is a good heads up for what is coming in the appraial world.  Asking sellers for renovation info/pics at the time of listing should not be that difficult.

Sep 20, 2011 01:01 PM
Sue Wettstein Brazzel & Dipper Wettstein
Howard County, MD - RE/MAX 100 - Columbia MD - Columbia, MD
"Fast, Efficient, Hassle-Free Service!"

Thank you!  I hope this means that homes with significant "remodeling" will get the value from them - that has NOT been the case in my area recently!

Oct 23, 2011 01:03 AM
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

Mary - Reblogging isn't available on your first post, but I'll reblog your second and third posts.  Thank you for taking the time to give us this information.

Oct 23, 2011 01:58 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Mary,

Excellent post and came from Gail's re-blogging this morning. Thanks for the vital information!!

Oct 23, 2011 02:26 AM