Haleem's Blog

Samer,

I believe what he is trying that you do, it is that you probe yourself that you are right, I have learned a lot of new stuff about underwriters and appraisals and believe me many of them they are very strict,   if you are in a SubUran Area, Urban area, now they are taking a lot of new rules for appraisals, maybe that's why,  ask him why he wants that you do that and listen what hey will tell you. 

good luck and let me know

Samer,

I am a Certified Relocation Professional (CRP) who is often asked to do relocation evaluations for corporate relocations.  These are called BPO's or Broker Price Opinions.  The format includes closed sales but emphasizes current active listings that are competition.  The idea is to try to predict where the market is going in the next 2-6 months.  Are the current listings priced higher or lower than the closed sales? Are there foreclosures or new homes in the area that might have an impact on values? Maybe the lender that contacted you is mirroring the relocation model rather than just a historical closed sales model.  We are in a changing environment and I suspect that the lenders are reviewing their models for determining value...especially on high loan to value loans.

Please keep me posted...and I will keep you posted on what I'm seeing in the market in Southern California.

Maxine

Hi Samer -

I have had to explain to underwriters that anyone can list their house for $1mil... it doesn't mean anything until it's sold - It is also quite relevant for them to see pictures and descriptions of each property as well as the DOM -

Personally, I like to try to just direct them to realtor.com until they give a more in depth reason for what they are looking for and why....

And hello Maxine -

I have received a condition for actives on an ERC appraisal in the past and I understand that is part of the assignment.  I have had to add a statement below (Underwriter is Q / I am A):

At the bottom of page 4 of the ERC form you note the subject's competitive list price range is $260,000 - $390,000. Did you mean $290,000 instead of $390,000? Please advise.

No, I meant $260,000 to $390,000- The listing prices of similar houses in the subject neighborhood do run between $260,000 and $390,000. Competitive pricing would be a range between $260,000 and $290,000 however the range of competing houses are between $260,000 and $390,000 (competing, yet not competitive).

I read the statement to mean 'what are the list prices for similar houses in the neighborhood?' rather than 'what should be list prices for similar houses in the neighborhood?'. If the statement means, 'what is a competitive listing price?' rather than 'what are competitive homes in the neighborhood being listed for?' then $260,000 to $290,000 would be accurate.

Hi Samer,

In a decling market, like here in Florida, it is very difficult to appraise!  :)--like you didn't know that!

I believe that as appraisers, we should analyze the current market trends, as well as historical trends.  Current market would including active, pendings and contingents.  This information does help to determine where the market is going and would justify the weight placed on individual comparables in SCA.   Sort of like analyzing vacancy trends in commercial properties, via IA.

That being said, it still isn't easy to pinpoint a value, especially due to the fact that we don't have a CRYSTAL BALL!  I have included a pending listing as a 4th  or 5th comparable, after getting the information out of the sales agent regarding the contract price.  I basically tell them that any information they provide, helps us in establishing fair market values--in light of the depressed market.  Typically, when they believe their clients may benefit (indirectly); then they are willing to share the info.  (not all, but most)!

THESE ARE NOT THE EASIEST OF TIMES !

 Look forward to other comments/ideas???