Our Friends at Fannie and Freddie, have decided to change the way appraisers describe the quality and condition of homes we appraise and the comparables we use.
Since I started appraising in 1977 - we described properties as being: Good, Average, Fair or Poor - sometimes adding "very good" or "excellent" or fudging with "low-average" or "average-" - knowing if you determined the condition or quality of the home as fair or poor - you probably killed the deal. So many appraisers pre-set "average" in their appraisals for the subject & comps. Which I will admit is a problem.
On 9/1/2011 and beyond we will need to define condition on a C1 - to - C6 scale and quality on a Q1 to Q6 scale. 1 is considered the best - for condition a new or unlived in dwelling. A C6 condition is a property with substantial damage or defered maintenance.
For views we will need to use the following codes: A, B or N -- what do they mean: A = adverse (hurts value or marketability); B = Beneficial (that's good) and N = Neutral. and if it is a view lot - how about B;MTn;Wtr -- what? that is a beneficial view of mountains and water - not just for the subject, but also the comps get these codes and abbrevations. Are you confused yet?
Now if you have 2 and 1/2 baths the correct way to show the count will be 2.1 and if the house has 2 1/2 baths = 2.2
For Kitchens and baths we will need to report if they have been "updated" "not updated" or "remodeled" and if the work was done in less than 1-year; 1-5 years, 6-10 years, 11-15 years ago or unknown. An updated bath might have a new toilet, and remodeled bath an all new shower.
We will need the have a cheat sheet to fill out our appraisals (no pre-set - boiler plate will do), and provide definations for all the abbreviations. And will be clients be confused - yes, Sir!
This all is going to add to the write up time of appraisals, coming in on the heels of a majority of our work coming from low paying AMCs who want the appraisals back in 2-days time.
I understand the need for more specific information and by using numbers and not wiggle words like "average" will help in underwritting loans, but it will be a tough transition.
Appraisers are already upset with the reasonable and customary fee requirements that started April 1 - as the AMCs think they can continue paying 40% of the appraisal fee to their appraisers - and not bump up to what we were paid before HVCC. And there is still anger about the time needed to do the 1004MC report.
We have already lost about 1/3 of appraisers in California - who is going to do the valuation work. Yes, there are BPOs - but they are paying too low for an agent who has enough real work. And the AVMs never did address quality and condition - just did some kind of averaging.
Beverly A. Bayer, SRA