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Pulling Comps For The Appraiser On Condos

By Jean Hanley

Real Estate Agent with Coldwell Banker Kivett Teeters CA BRE# 00693015

September 01, 2010 12:11 PM

In speaking with my loan officer las week, she was telling me that there are so many condo/townhome sales in the current market. And, as we all know all too well, many of those condos and townhomes were purchased as investments, and therefore, are used as rentals.

So, the appraiser can often times have difficulty in bringing in enough comps to arrive at a price. The underwriters do not want to see a lot of non-owner occupied properties in a particular complex.

Well, according to my sources, the underwriters are now allowing REO listings and sales to be used for comps. Afterall, the bank IS the owner. I think this is great, because it's hard enough to get the appraisal we need sometimes.

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Vern Eaton

Askov, MN

Realtor 651-674-7449

Some areas have very few sales of any kind. Appraisers need all the help they can get.

Sep 01, 2010 12:16 PM

Rodney Mason - Sr Loan Officer

CrossCountry Mortgage NMLS# 3029 - Atlanta, GA

AL,AR,AZ,CA,CO,FL,GA,IN,MI,MS,NC,NV,SC,TN,TX,VA,WA

Jean, I am not sure what you mean regarding the fact that many condos are purchased as investment properties and how that relates to value. The occupancy status (Primary, Second Home, or Investment) of a closed comp has absolutely no bearing on that property being used as a comp in an appraisal. The comps selected by the appraiser should be the best and most similar to the subject property.

For FHA loans, HUD requires that at least 50%+ of the units be owner occupied. Fannie Mae does not have a minimum owner occupancy requirement when the loan will be for an owner occupied unit. An investment property would require 51% owner occupancy. This is the only time that occupancy will be factored in.

Closed REO's have long been acceptable as comps. In the old days (pre-2007), appraisers would generally exclude REO's, relo's, and properties sold as a result of divorce as comps. Those were considered to be distressed sales and therefore not true comparables.

Sep 01, 2010 12:53 PM

Jean Hanley

Coldwell Banker Kivett Teeters - Hemet, CA

Specializing in Folks Who Want To Buy/Sell Homes

Vern, I agree. I always meet my appraisers WITH comps in hand. They appreciate the help, and some local input is always helpful, when you have an out of area appraiser.

Yeah Vickie, is is great. We need to close those deals.

Rodney, what I suppose I am referring to mostly with the owner occupancy issue, is that it does tend to keep the underwriters happy. lol I have had a couple condo deals fall apart because the numbers were not there, and they would not count the bank owned properties. This was last year. It seems to be better now.

Sep 02, 2010 10:49 AM

Pulling Comps For The Appraiser On Condos

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Jean Hanley

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