Drive By Upgrade
How many times have you received a drive-by assignment only to come across a view from your car like the image below?
This was my view back in the summer of 2004. I notified my client that they needed to upgrade to a full interior/exterior inspection appraisal.
The loan officer had a fit.
“The house is over 4,000 square feet. They just put $100,000 into a new addition and installed a massive new deck!” barked the loan officer.
“Then I definitely need to get inside,” I said.
She cancelled the order.
When they took back the house in 2008, none of those improvements were true. The loan officer had already left the business in 2005.
What if the client (lender or AMC) refuses to upgrade?
Then walk away.
If you’re not working off of a reliable prior report or you can’t see what you need to see to make a reasonable judgment; upgrade or walk away.
What does Fannie Mae say to lenders about assignments like this?
Lenders must upgrade to an interior and exterior appraisal inspection if an exterior only inspection does not provide sufficient information about the property to perform the inspection.
For example, if the following conditions exist, the appraisal must be upgraded:
- the appraiser cannot adequately view the property from the street,
- apparent adverse physical deficiencies or environmental conditions are observed,
- the appraiser needs additional information about the physical conditions of the property.
Google Earth won’t save you. Your liability for a bad guess is no different than if you strolled on through the house with a blindfold on.
The profession of appraising is as much about self-preservation as it is about generating a book of business.
Somebody did that drive-by back in 2004. Not me. I ate a trip fee that day.
It was the best money I never made.
By Lee Lansford – Illinois Appraiser Newsletters – Volume 4, Issue 7