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I don't want to do your JOB..But Here are some comps for the appraisal

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Real Estate Appraiser with Lanier Appraisal Service CR004373

Lately, this is becoming more common. Homeowners and Realtors giving Appraisers COMPS to do their appraisal report. It usually starts like this...."I am in this business (either Realtor, Builder, Mortgage Lender, ETC) so I would like to give you some Comps to help you do your job". Some go so far as to say "I don't want to do your job for you....BUT here are some comps. 

Realtors and Homeowners, do yourself a favor, If you want to provide Appraisers with comps for review, no PROBLEM,  just put them in an envelope and hand it over or leave it on the kitchen counter with Appraiser-FYI on it and say NOTHING...... Appraisers are trained in this comp search game, they do it every single day, so when someone says, hey I don't want to do your job or Here are some comps to help you out....Guess what? we have the same data you do and chances are GREAT that we have already reviewed the comps that are being provided by the Realtor or Homeowner and if they are indeed comparable, they will be used.  

Here is the problem. About 90% of the time the comps provided are sales price or value driven in order to obtain the value they are seeking. Most of the time the "comps" are NOT comparable. 

Case in point this week. Had a 2 bed 1 bath home I was appraising and the owner gives me 3 comps. NONE had 2 beds and 1 bath. Lenders REQUIRE at least one comps to have the same bed and bath count as the subject. Secondly all the comps were several hundred feet larger in square footage. Again LENDERS do not want to see homes that are considerably smaller or larger than the subject. We cannot exceed certain aggregate adjustments and if we do, we better have a good reason for it or the lender will not approve the loan/appraisal. 

THE BEST THING AN OWNER AND/OR REALTOR CAN DO IS PROVIDE THE APPRAISER WITH A LIST OF ALL IMPROVEMENTS IN THE PAST 15 YEARS WITH COSTS FOR THESE IMPROVEMENTS. YOU WILL GET MUCH FURTHER IN YOUR QUEST FOR A FAIR APPRAISAL WITH THIS INFORMATION FOR THE APPRAISER. 

 

Thanks folks! 

 

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Comments (7)
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Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

Mary - great post.

Love the idea of providing the list of improvements with cost.

Oct 13, 2012 03:11 AM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Mary,  i'm finding that more appraisors are coming greater distances and therefore appreciate any help I can give them.

Oct 13, 2012 03:15 AM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Sarah: As part of the appraisal process, which is a fairly new change, we MUST provide data on upgrades to the home especially Kitchen and Baths in the past 15 years, so we need this information and if Cost is included, there is a better change more value will be placed on the home with actual costs to consider. Of course market value is not a Dollar for Dollar return, but knowing how much a renovation cost, is much better than having the appraiser guess at that cost. 

 

Bill: If they are coming from far away, and they don't have access or do not know enough about the area to find their own comps, that is a REAL problem. Appraisers MUST be competent in the areas they serve per Fannie Mae and USPAP and if they are relying on Realtors to do their job for them, they need not be doing that appraisal in that area. 

Oct 13, 2012 03:29 AM
Sharon Denning
Momentum Marketing - West Richland, WA
Marketing that gets it SOLD

It is a real problem that appraisers are coming from a distance and very very common. It is in fact the banks driving this problem

 

 

Oct 13, 2012 03:33 AM
Sara Goodwin
Ashcroft & Associates - Portland, OR
Portland, Oregon Appraiser

Hi Mary -

I invite Realtors to provide their CMA / comps - Most of the time at least half of the (closed) sales they offer are sales I have already found to be valid if my preliminary comp search.  The other sales I deem not similar enough to use, and the others are often active listings. 

When 'value driven' CMAs are provided, I will often comment why I didn't use suggested sales/listings so there is little room for rebuttle.

The reason for my invitation is that many of the selling agents are very familiar with that particular market (ie: they live in the neighborhood and/or go to all of the open houses in the area) and they can have very valid critisms regarding condition of specific properties.

I understand that Realtors are going to look at the active market to competively price the property, but if their active, I do not weigh them in the cost approach to value. 

I've not encountered that bed/bath rule from any of my lenders.  There are several reasons for a difference in bed/bath count in our area.  1) often there are bonus rooms that could legitimately be considered bedrooms with the addition of a closet 2) the immediate market does not show a preference for three verses four bedrooms (etc) or 3) one or more bedrooms (of the subject or comps) are in the basement and might otherwise be considered bonus rooms regardless of the egress status.

On a side note, I did have a lender last week conditioning a report asking why a comparable property had 4 bathrooms when the subject had 2.1 - I didn't know how to honestly answer other than with a 'snide' comment stating that apparently the original owner or builder preferred to have four bathrooms in the house but no one was available to comment on the matter.

Appraising is still fun, yeah?

 

Oct 14, 2012 02:50 PM
Mary Thompson
Lanier Appraisal Service - Flowery Branch, GA
Lake Lanier Appraiser in North Georgia

Hey Sara

 

I am really surprised your lenders are not asking for at least one comp that has the same bed and bath count, especially bath counts and especially when you are dealing with only 1 bath! I understand the 3 vs. 4 BEDROOM count, etc especially when usable area will allow for another bedroom, but when you are dealing with a 2 bedroom 1 bath home and using a 3 bedroom 2 bath or 3 bath count home, that will never cut it with an underwriter as there is a significant difference in value between the 2 homes, at least in our marketplace. 

I do have some crazy and I mean crazy requests from lenders, You just want to say are you KIDDING me!

I have no problems with Realtors providing comp data, especially on condition of interior that we may not know about or special circumstances of the sale (which we still must confirm) and I have always told Realtors that, but when I start to get comments like I want to provide you comps to "help" you do your job or "I don't want to do your job"....BUT here are some comps, 90% of the time in those cases, the sales price or the REFI value they are looking for is too high and they are pushing it with "their comps"

I just asked a Realtor the other day on that very example about the 2 bed 1 bath home if I am out of my mind on value since she is an EXPERT in that City. Without mentioning any kind of value and just asking her what value she would apply to this home and she supported my opinion. So when I am in doubt I will talk to the Realtors who work with buyers every day in a certain NBHD. But what cracks me up is when they think we do not have access to the same data they do and they say Hey, I can help you with these comps! I would much prefer detailed list of imrovements with costs. 

Apprasing is sort of still fun...The jury is out lately on this, but I do know there is no other occupation I could be involved with that allows me to be my own boss and pays me what I make today. 

 

Oct 14, 2012 10:42 PM
Sara Goodwin
Ashcroft & Associates - Portland, OR
Portland, Oregon Appraiser

It's rare to find under 2 or over 4 bedrooms in most of the Portland Metro area, so its likely that I never ran into that rule because I had always accidentally been following it.

Yep - Some days its worth the crazy conditions and bureaucracy ;-)

Oct 17, 2012 02:19 AM
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