Author: IDFPR Board

Condo Density Primer 1

Condo Density Primer

Many appraisers still seem confused as to what the form means by density. In the project section of Fannie Mae form 1073 the first line addresses topography, size, density and view. Many appraisers still seem confused as to what the form means by density. Appraisers enter and AMCs approve phrases like: average or typical or even a calculation such as 50 units / 12,975 square feet. Appendix D regarding UAD reporting offers no guidance. What are they asking for and what does it mean? Fannie is looking to see if the existing density can be rebuilt following a catastrophic loss....

Unpermitted additions assignment condition 1

Unpermitted Additions “Zombie” Assignment Condition

Unpermitted Additions This is a “zombie” assignment condition that seems to never die. Let’s agree that unpermitted means something was constructed without a required written permit. There are plenty of jurisdictions that don’t issue permits because the permit process doesn’t exist. The assignment condition goes something like this: The appraiser is not to include any GLA from any unpermitted additions unless they use comparables that have similar unpermitted additions. Here’s what Fannie Mae stated in their September 2014 FAQs: If the subject property features an unpermitted addition, can the square footage of the unpermitted addition be included in the total gross living area reported on the appraisal report? If the appraiser has identified an addition(s) that does...

Geographic Competency and Uniform Standards of Professional Appraisal Practice (USPAP) - Imagecredit Flickr - Corey Leopold 2

Going the Distance in USPAP

When I was in private practice, much of my litigation work took me to Somonauck, Sandwich and Plano, Illinois. That’s about 45 miles west of where I live. Still, I had so much work in those areas, you’d think I had an office there. However, if I were working for many AMCs, I’d have been considered too far out of my area for the assignment. Some AMCs, under the guise of authenticating geo-competency, restrict assignments to Illinois certified appraisers based upon arbitrary distance limitations. Most typically seen are 15 miles for urban/suburban locations and 25 miles for rural. Then there...

Appraisal Management Companies (AMCs) renewal 0

AMCs Renewal: Two Years Later

AMCs procrastinated or missed the renewal period We started registering AMCs about this time back in 2013. It was a slow roll from the nascent 9 applications received in March of 2013 to a peak of 42 applications received in August 2013 just ahead of the deadline to register. Since that time the number of AMCs in Illinois has ebbed and flowed. At one point we had 192. As of this writing, we stand at 155. Nationwide there are less than 700 AMC entities. The universe is small. We’ve already completed our first renewal that ended on December 31, 2014. Like...

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CU and Appraiser Regulation

Whether you believe Fannie Mae’s comprehensive rollout of Collateral Underwriter will finally weed out the lazy form-fillers or it will end up euthanizing the aging residential leg of the profession once and for all, is not the subject of this article. There are plenty of blogs, articles, and seminars that are wrestling with the efficacy of CU and its long-term impact. To be sure, the profession has entered the new age of big data. Residential appraisers will need to navigate regression analysis, heat maps, trend lines, oblique aerial images, and especially how to tie it all together into something meaningful. From...

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I Can’t Talk About This Appraisal Even if They Waterboard Me!

Anyone who appraises real property long enough stands a decent chance of being swept up in a divorce. Someone else’s. There you are, minding your own business…opening the snail mail in hopes that your clients have finally sent those checks when… A subpoena pops out accompanied by a check for some chump-change amount. What you discover is a subpoena originating from a law firm you never heard of…about a couple getting divorced whose name is unfamiliar…but the property address looks vaguely familiar. Of course! You appraised this house in 2012…for a refi. But now some strange lawyer wants you to bring this dusty refi report to court with you…next Tuesday! Upon receiving a subpoena the natural first reaction for many...

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Do Associates Need to Be Licensed to Take Comp Photos?

Do Associates Need to Be Licensed to Take Photos for a Property Inspection? I received a great question in my email the other day: I am writing on behalf of one of our appraisal managers who is a certified in Illinois. He wants to send one of his associates only to take the photos for a property inspection, but the associate is unlicensed. Is he authorized to do so, or would the associate need a temporary license of some kind? In some states this is considered clerical work, and some states are considered volunteer states, so a license is not required as long as the certified appraiser clarifies in the report who took the...

Personal Property, permits...rules of engagement 6

Rules of Engagement

Recently a particular engagement letter format has been circulating amongst residential appraisers from several nationally chartered banks. Aside from the usual intended use and exposure time boilerplate requirements there are several new problematic inclusions. Personal Property All personal property transferring in a purchase transaction must be described in the appraisal whether or not it was listed in the sales contract. Any client is free to ask for a shopping list of tchotchkes, but if an appraiser is appraising an abandoned residence with piles of junk laying everywhere…they couldn’t afford my time to sift through it all like in an episode...

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Contract Analysis Paralysis

The most critical failure found in appraisal reports that come before the Board, whether residential, commercial, or agricultural, is a lack of analysis.  Appraisers seem to think that citing or reporting is synonymous with analysis. Analysis – to study (something) closely and carefully: to learn the nature and relationship of the parts of (something) by a close and careful examination. The URAR asks: I did or did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed. Yet many will write:...

Sales ratio 2

Sales Ratio & Adjustments

Three sales, if you chose wisely, bracketed your subject neatly. There was a time when appraisers popped three sales onto a grid, made adjustments, concluded an opinion of value then moved on to the next assignment. Today, appraisers routinely include five or six closed sales, plus a couple of listings or more. There was something to be said for the old Goldilocks approach. Three sales, if you chose wisely, bracketed your subject neatly. Even if you had six closed sales, you could still bracket pretty cleanly. But listings. What to do with them? Some appraisers will actually toss them on...

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