Tagged: comparables

Rules Check Software 6

Rules Check Software

If the ‘story’ can be told using 3 comps, why are 4 or more really necessary? Folks, As you are probably aware, all of our appraisal reports receive an initial examination electronically. There are a number of businesses which have written and provide to the industry various types of ‘rules check software.’ This actually began in the early 1980’s by the appraisal computer software pioneers who wrote programs to ‘check’ reports for inconsistencies. I just learned about one such ‘rules check’ company, and the results they’ve seen using their software – below. They even admit to users that the users can ‘mine’ reports...

Contract Price vs Failed Appraisal...The Blame Game Just Won't Quit 34

Shame on Us – Appraisal FAILS Replace LOW Appraisal

Appraisal under contract price… Appraisers, The blame game just won’t quit. Now instead of dealing with a ‘low appraisal’, it’s now a “FAILED appraisal.” It’s always “our” fault properties don’t sell – when the contract sale price is higher than the appraised value. It’s never the fact that the home may have been over-priced, the buyer was desperate or over-emotionally involved, or the seller super greedy. The latest example highlighting “our” deficiencies: Excerpts from the Mortgage News Daily article: “…collateral problems are consistently the third most frequent cause of loan denials.” “…appraisals coming in below the contract selling price is...

Line Item Adjustments for Every Little Difference? 8

Bugged About Adjustments

Illogical line item adjustments… Appraisers, I’ve recently ‘come in contact with’, in a semi-official capacity, a recently completed appraisal report. In looking at the adjustment grid pages for 5 comps, items jumped out at me. These do not appear logical. All comps, except one, have sale or list prices at even thousand dollar figures = $XXX,000. The one is $XXX,950. These are pretty typical in our market. Very seldom do we see these in odd numbers, unless the listing agent is trying to be cute, and buyers accept the oddity. For line item adjustments in the report, the appraiser has...

They are mad! Have You Got the Integrity to Be an Appraiser? 11

Have You Got the Integrity to Be an Appraiser?

We’re talking about downright mad… Appraising real estate is a tough job, even under the best of circumstances. There are too many occasions where every person involved in the transaction is upset and all eyes are focused on you. Even if you’ve done the best appraisal of your career, had perfect comps, and though you did a great job that no one could argue with; argue they do and at the end of the day, you are the only person screwing up the deal for everyone involved. And, we’re not talking about being a little upset. We’re talking about downright...

GLA Adjustment & Pizza Slices – They Do correlate! 15

GLA Adjustments & Pizza Slices – They Do Correlate!

Determining the GLA Adjustment in Appraisal Reports I promised in a previous post I’d send out my method for determining the GLA adjustment in appraisal reports. Goodness! Appraisers actually found that statement buried in the prior post, and have ‘rung my chimes’ requesting this info! OK, but first, the pizza analogy. I often tell clients and other appraisers that appraising (residential) real estate is far more complex than grabbing a store-bought pre-boxed pizza (that has exactly the same ingredients from box to box no matter which store you shop in) at a grocery and then applying 425 degrees of love...

When Residential Appraisers Fail to Bracket 5

There Go My Brackets

When appraisers fail to bracket… Forget college hoops and all of the upsets. This is about the upsets that occur when residential appraisers fail to bracket. Say that your subject property has a contract for $102,900. Ideally your three sales should surround the contract price like a cozy, warm blanket. Comp #1 might end up, after adjustments, at $100,000. Comp #2 might reach $102,500 and Comp #3 might conclude at $104,000. Yay! All you need is a pretty bow and you can deliver a lovely report to your client. But…it really doesn’t work that way on most days. Does it?...

Incorrect 1004MC Form Trend Reporting 22

Incorrect 1004MC Form Trend Reporting

Appraisers, I have ‘come in contact with’ an appraisal report, produced by a Certified appraiser and its Licensed Trainee – working in the area near my office. It’s clear to me that these two appraisers do not understand trend reporting that this form indicates. By the way, I’m no great fan of the MC form. However, since we are required to use it, we better darn well learn to use it properly. Report what the trends on it show and not something obtained from elsewhere, sometimes called “PFA.” If we don’t, or choose to ignore what the form shows, then the ENTIRE...

Dreaded Fannie Mae Certified Letter Regarding Condition Ratings - Imagecredit Flickr - Mehta12 17

Dreaded FNMA Letter RE Condition Ratings

Certified Letter From Fannie Mae Regarding Condition Ratings And then it happens, the moment we all know is coming – the dreaded certified letter from Fannie Mae. My door bell rings and the mailman is standing on my porch with pen in hand.  Now don’t get me wrong, we have all been warned. They have the super computer comparing all of us and if you are the outlier you’re getting notified!  If a majority of Appraisers give a specific house a certain rating and you disagree, you must be wrong – BOOM – letter.  I assume this is the case as I...

The "Property Prices Reach All Time High" Hype - Imagecredit Flickr - FaceMePLS 2

The “Property Prices Reach All Time High” Hype

“Property Prices Reach an All-Time High” Oh really? The subject line is a press release headline put out by a national sales organization. Do you buy into the hype, or do you actually do local comparable property market research to verify trends? I just completed an appraisal on a property I appraised 2 years ago. I did a 5 year market study on comparables then, and found the market for that type of property had been DECLINING at that time. I did another 5 year market study on this same property this time around. And guess what? The property values for this type...

What is Gross Living Area and What Does it Include 5

What is Gross Living Area (GLA)?

What is Gross Living Area and What Does it Include? Appraisers, There are certain properties where aspects of Gross Living Area (GLA) might not be obvious. It’s more confusing when the selling real estate agents lump all “living space” together, because that’s what they are selling, or when the county assessor includes basements with upper level areas. These include homes with a detached ADU, additional rec room or sleeping space above a garage, additional living space with roof attached to the primary dwelling via covered breezeway, basement living spaces with separate entry, etc. Fannie Mae has a giant book called...

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