Baton Rouge Appraiser Frustration Computers Questioning My Judgment

By
Real Estate Appraiser with Accurate Valuations Group, LLC LA St Certified 851

Fannie Mae CU or Collateral Underwriter can be frustrating to Home Appraisers when their computer models try to second guess Appraiser's judgment. 

Now computer models tell Appraisers the comps they should use instead of Appraiser Judgment


For example, this past week, I performed a foreclosure purchase on a home obviously needing some repairs and on the market for a much longer than average 275 days in two (2) REO listings.  It sold between $25,000 to $30,000 below market...for a reason.  After submitting the report, I received the following revision request: "The appraiser-provided comparables are materially different than the model selected comparables."  What this means a computer selected the comparables sales I should have used not even understanding this is a foreclosure, the condition of the home nor the circumstances of how the market (buyers) reacted to this home. 


"The condition rating for comp #4 is different than what has been reported by other appraisers. Appraiser to confirm rating is accurately reported."


This is frustrating to me as I've only received 1 Lender FNMA CU question since CU implementation, and it was on this topic. "The condition rating for comp #4 is different than what has been reported by other appraisers. Appraiser to confirm rating is accurately reported."

Slab Granite
This is an example of slab granite from bigstockphoto.com (Yes, I purchased this photo)

Comp. #4 sold for $131/sf when other homes of similar size in same subdivision in 2015 sold for $111/sf, $110/sf, $111, $112 and $109/sf in C3 Good condition. So, Comp 4 sold for roughly $20/sf more than the average home in subdivision yet other Appraisers only called it C3 and I called it a C2 based on it selling for $20/sf more along with photos and comments of renovation, extensive new slab granite. Just because other Appraisers didn't take the time to study this sale and couldn't see the obvious differences doesn't mean I was wrong in my C2 rating (sold price per sq. ft, photos, mls remarks and mls history to know the 2015 difference). There's a reason the market pays $20 more per sq. ft. than others in same subdivision and that's generally condition. There were no major amenities to speak of other than an old liner pool not much of any value in a market where pools are rare.

AS NOTED IN THE ADDENDUM, MY UAD INTERPRETATION OF FANNIE MAE C's OR CONDITION RATINGS:

C1 = New Construction; Never before occupied and on a new foundation

C2 = Almost new condition (1 to 5 Years of Age), Or TOTALLY Renovated / Updated

C3 = Good

C4 = Average

C5 = Fair, Needs Repairs To Close Loan, Appraisal Subject To Repairs

C6 = Very Poor, Appraisal Subject To Repairs

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Louisiana East Baton Rouge Parish Baton Rouge
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Rainmaker
281,293
Nancy Robinson Ranked #6 in MI
Century 21 Town and Country - Royal Oak, MI
#10 Century21 Realtor in the US, #16 in the World

Can you over ride the computer?

Nov 28, 2015 09:21 AM #1
Ambassador
779,132
Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

Computers work cheaper than Appraisers, but at what cost?

Nov 29, 2015 09:40 PM #2
Rainmaker
537,933
Bill Cobb
Accurate Valuations Group, LLC - Baton Rouge, LA
Greater Baton Rouge's Home Appraiser

Hi Nancy, 
No, I can't over ride the computer but can offer a reply or rebuttal.  This was my reply to this statement by computer underwriting: 

"This is absolutely immaterial to me, the Appraiser on the ground who actually visited subject property understanding this transaction, understanding the market's reaction to this REO house. A Fannie Mae computer model, which never saw this home in its current 2015 REO condition and took 275 days on the market to sell in 2 REO Listings, has no understanding of the subject property AS AN REO other than when it was built and assumes homes is in good condition. Comps I chose are similar in age, design/appeal, quality, bracket sales price, bracket subject's living area size and bracket bedrooms and bathrooms.  Some are REOs and some are NON-REOs. As I stated on Page 1 of FNMA Form of subject's XYZ Subdivision, from 6/2014-2015 in XYZ Subdivision: 6 Sales $252,500 to $387,000, Median Price $318,500, Avg Sold Price $134/sf, Avg LP/SP Ratio 95%, Avg 48 Days On Market. So, the average home in XYZ sells for $134/sf and subject is selling for $111/sf, some $23/sf less, for a reason.  This is why in 2015 we still have Appraisers doing appraisals and not computers who never visit the actual house being appraised.  "Computer Models" also don't read appraisals to understand REO situations as evidenced by the statement / question, "The appraiser-provided comparables are materially different than the model-selected comparables.  Respectfully, Bill Cobb, Appraiser 

 

Nov 29, 2015 10:39 PM #3
Rainmaker
537,933
Bill Cobb
Accurate Valuations Group, LLC - Baton Rouge, LA
Greater Baton Rouge's Home Appraiser

Exactly, Doug!  


Thank you ALL so much for your time! 

Nov 29, 2015 10:39 PM #4
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Rainmaker
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Bill Cobb

Greater Baton Rouge's Home Appraiser
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