Original Comparable Photos
I recently received an AMC update and reminder about the need for and why actual comparable photos are necessary.
My reply:
Original Comparable Photographs: Scope of Work Point 3: Inspection of the comparable sales from at least the street. This requirement does not tie the appraiser to a specific time for that inspection. Geographical competence would have the appraiser in the area of the comparables many times, and depending on the appraiser’s experience, for many years. Taking a comparable photo a month, six months, a year or more after the sale, does not represent the sale’s condition at the time of the listing/sale. If the assignment is done in February in our Michigan area, what good are comparable photos when there is two feet of snow covering the house and site? This archaic lender requirement should be brought to the technological times of today.
Point 2: Inspect the Neighborhood. Are we to photograph the entire neighborhood? If you have to in #3 why not in #2? The reason being we can get aerial photos from the internet. But wait, can’t we get comparable comp photos from the same place? The difference being???
You signed the report saying that you did do something. Enough said period!. How can the lender assume that we didn’t?
“Photos taken by the appraiser are considered evidence of compliance with the Scope of Work”.
Should we bring a certified note “as evidence” from a disinterested source, attesting that we verified all information in the report that was provided by parties who have a financial interest in the sale or financing of the subject property (Appraiser’s Certification #10)? There is a slew of other certifications that are assumed because we said we did. We say we did but we don’t supply evidence to prove it. We said we inspected the comps from the street….the difference being? The use of MLS or online photos of the comparables does not mean that the comparables were not observed from the street.
Come on! Lets beat this dead horse some more. Give me a logical reason why current photos of historical comps need to be used for a current appraisal. The lender wants me to prove that I actually drove by the comps? Why don’t they believe me when I certify that I did, yet they believe my opinion of value, reasons and explanations in the appraisal? Something is very, very wrong here. Logic or lack thereof, appears void in this one sided requirement.
With CU and “Big Data” the supplying of “actual comparable photos” appears to be a redundancy. The verification that the correct comparable photo was utilized in an appraisal should be easily completed much like verifying a comparable’s view and location rating (external obsolescence). The main reason for driving by the comparable sales is to see if any adverse neighborhood conditions exist. This would be appropriate for a newbie or anyone who lacks geographical competence or access to a website like Google Maps or Bing.
The AMC letter states
“When appraisers sign a certification that they inspected each comparable sale when, in truth, the appraiser did not, that deception short-changes their client, adds unnecessary risk to the loan underwriting, and undermines the integrity of appraisal process. The lender and secondary market investors need to know that the appraiser has complied with the stated scope of work.”
“When in truth, the appraiser did not” is an assumption that should be treated as any condition that is unknown. Why can’t the client make the extraordinary assumption that we did inspect the comparables from the street instead of assuming that we didn’t? “Short changes their client” of what? Photos of comparable homes that may not be indicative of the home at the time of sale? “Unnecessary risk” of what? Missing an external obsolescence factor which is part of the geographical competence of the appraiser? “Undermines the integrity of the appraisal process”? Wow! Those original comparable photos hold a lot more weight than my 38 years of appraising?
To verify the condition and features of a historical comparable from the road for a current assignment may conclude that an addition, a structural change or a possible garage or an out building were added or removed. Now the appraiser has to discuss the changes that appear in the photo and verify the change, details and facts. What bearing do changes to a comparable after purchase have on the Subject? It doesn’t! However, it could add considerable time and effort to the assignment, which of course doesn’t matter to the client. Should we place a caveat in our report that the condition and features seen in the photos may vary from the actual condition and features present at the time of sale?
If the appraiser has geographical competence, which is needed to accept an assignment, any concern about comparables’ location and features is settled and will be properly addressed in the appraisal. The proper use of CU and Big Data should eliminate any purported risk and report integrity. As for short changing the client….what do they say about pay backs?
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Geographical competence says it all! Come to central Illinois – in any given winter months we may or MAY NOT have snow on the ground from one day to the next. Personally, I just love those reviewers from OUTSIDE Illinois that have no clue about this area ; and think because there is not any snow in the photo it cannot be a current photo. I have noticed some clients/lenders making “current photos” or “in season photos” part of their engagement letters. If you are a reviewer, are you educating yourself about the area within which you review work? Are you familiar with the terrain and the seasonal weather? One of the best remarks I received one time from a reviewer about a photo I had taken was about Evergreen bushes. He asked me how could it be a current photo in winter if the bushes were green? I laughed so hard and offered him a picture of the EVERGREEN bushes in my own front yard. I had to explain to him they were not deciduous plants. He didn’t understand ~ lol~ look it up!
I had one to ask me why the street scene showed the front of the home. I had taken numerous photos of the property because of the confined space requiring 3 photos of the front on the first photo page, 3 of the rear, 2 of the street, side shots, etc. Each was labeled precisely detailing what the photo was of.
The underwriter however could not get beyond the fact that I modified the photo pages and changed the photo captions. They were stuck in Front, Rear, Street mode. It took two days, 5 calls, and 4 emails to drill a hole through this guy’s skull and slowly drip in a teaspoon of simple logic.
The key problem here is that we are asked to “evidence” everything and I agree, enough is enough!!! It is not just comp photos, it’s water heater strapping, attic space check, everything. When can we appraisers get some respect for our words? I understand lenders are rightfully trying to reduce their risk, but there lacks a mechanism to protect appraiser’s time/fee.
FHA asks for original photos too. If you can’t get the photo of the house, you are asked to prove it by the gate picture, bush picture. If it is people in front of the house, then the driveway, the street…. If the people are hostile, then you are to go back and take one secretly, or risking gun point or a call to police.
When will we appraisers get some respect for our words alone?
Who can do something about this? Appeal to FHA, then maybe some lenders would follow….
Being chased by hostile homeowners or pulled over by the police after taking comp photos are the last fun parts of this job!
Truly, those WERE the good old days. I had a homeowner chase me for a 1/4 mile once when I shot a photo of his home as a comp. He was swearing at me the entire time. I drove just slowly enough to keep him in the chase.
I recommend take a video every square inch of the home on the date of inspection, (attics and crawlspace included). Make sure that you have a notary accompany you to the inspections as well to prove that the date and time are accurate.
Does that sound insane? Obviously
Is an a stretch of the imagination considering the BS that FNMA has dumped on appraisers over the last 5 years?
FNMA has clearly demonstrated over the past 5 years that it has little if any trust in the certified appraiser today. Considering the lengths to which it’s gone with Collateral Undertaker I would expect the “fantasy inspection” that I described above to become a requirement within the next 5 to 10 years.
I believe you can tell far more about a sale by making yourself familiar with the property by viewing the photos in mls. Typically i can view all the exterior and interior photos and know far more about the comp than I can by driving by the street. Â Internet photos are what Gse are using. Â My opinion a drive by photo is a waste of time and there are more superior ways to become familiar with a sale. The requirement is out dated
Been saying it for years. If you can’t trust my signature stating comparables inspected from street then don’t trust my signature at all!
there are so many things in the appraisal business and process nowadays that have become grossly absurd, and this is one of them. i too have taken “current pics” of comps that when sold were in very bad shape, but the current picture six months later shows the house to now be completely rehabbed and beautiful. then, i get forced to explain why the house looks fantastic today, but sold for pennies on the dollar six months ago, and why my current pic doesnt match the MLS pic. my favorite is when i have to explain why my subject has a clear yard the day of the inspection, (but last night it snowed,) and now i have to explain why my comp pics have snow all over them. it never ends.
look, we can explain our lives away, we can write a 100 page report, the scope of work can keep getting bigger, and bigger, and bigger, it doesnt matter. lending money will always be a risk, and there are no guarantees for anyone involved. making us write a 100 page report and explaining our lives away will never make a borrower any stronger or less risky. i dont know of any appraiser who isnt doing the best they can. but turning a summary report into a report that looks more like we are valuing a strip mall accomplishes nothing. i think its time that we are stopped being treated like we are the problem. people need to trust us, let us do our jobs, and stop asking us for ridiculous things that only accomplish justifying someones existence.
Yep. (Thought a shorter response was more appropriate given the topic).
I WAS WORKING ON THIS AND DIDN’T KNOW WHAT TO DO WITH IT. NOW I SEE IT ISN’T JUST ME. I WILL SEE WHAT I CAN DO FROM VIRGINIA:
Is it just me or is the requirement for a residential appraiser to personally drive by a comparable sale used in a report becoming less and less informative and necessary? By now I am only doing this because I am told to. And you know appraisers really love being told what to do.
I have been appraising for a long time so I can appreciate and remember the era when this requirement was needed and crucial for the credibility of an appraisal report. It seems as though that over the past few years, the more I drive by the comparable sales that I am considering for an appraisal, the less information I am gaining. I am a professional appraiser in a specific geographic region. I know my coverage area and the neighborhoods like the back of my hand. I know where the external obsolescence is, I know the amenities in the different neighborhoods and I know where one neighborhood may end and another begins. Most of my knowledge about my geographic coverage area however was not gained from driving by a specific comp; it was gained via driving through the neighborhood during the subject inspection and the hundreds of other properties I have appraised in that area; on line county public records data that often includes pictures and floor plans; interactive GIS maps and parcel data; on line research including Google Maps (with street scenes); Bing Aerial Images; MLS system archives and current MLS data; and web sites such as Zillow and Trulia. These sources were not available at the beginning of my career; which is why the requirement for an appraiser to drive by comps was so important. This was very often considered the very best source for information. Today, however this has become the most unreliable source of information because I am forced to ‘judge a book by its cover’ days, weeks and months after the property closed. I cannot remember the last time I obtained any beneficial information about a property simply by driving by it. The only reason I do it is because it is still a requirement. I can verify an agent’s MLS photo in seconds through Google or Public records.
Driving comps is an outdated appraisal step that all GSE’s use and should be retired. This requirement is time consuming, unproductive, dangerous to appraisers not to mention the undue stress it causes to property owners. I know this particular argument may be viewed as grasping at straws but it is real. When appraisers are viewed in a neighborhood driving slowly and taking pictures of properties they are often making the residents of that neighborhood very uncomfortable. This practice may still be legal for now, but is it wise?
This requirement would be similar to FNMA or FHA or VA requiring developed film pictures for an appraisal and not allowing digital pictures. It would be an outdated practice and would add no credibility to a report. It would add significant expense and time to developing an appraisal. Is there an appraiser out there that still goes to the County Courthouse to view property records? Flip through plat books? Unfold FEMA Flood Maps? Why not? Because it is no longer a necessary step for the vast majority of reports and again would not add credibility to the report. On line data is either reliable or it isn’t; that is for the appraiser to determine. Technology has changed; the GSE’s should keep up. To be honest, if I have a personal picture of a comp that is somewhat like the subject then I am very likely to use that in the appraisal over a sale that I do not have a personal picture of but may be more similar to the subject. Does this increase credibility?
There still are a few reasons to drive by a comparable sale, but not many; new construction sales, public records sales; properties with no on line photo information or photos that are very old. What else? I’m stumped. If I need to drive by a sale then I will because I am a professional appraiser; but most of the time for me it is a waste of time. The requirement that the GSE’s should have in place is that the appraiser hired for an assignment should be an expert in his stated coverage area; not to have a physical photo of a comp. That doesn’t prove that an appraiser knows anything about an area. It doesn’t even prove that the appraiser took the picture. It’s time for the GSE’s to do some spring cleaning and this is a good place to start.
Unfortunately in several counties within which I work online data is not available. Some counties around here really do a great job. Usually the ones that lack the verifiable data (in my coverage area) are the rural ones. They possess more land than people & do not have $$ to develop the nicer systems. So, yes there are still a few of us that go to courthouses, take pictures of aerial maps, verify through property record cards, recorder of deeds & call zoning officers ~ because you cannot do it any other way. IMO, there are arguments that can be made regarding not taking the photos though. Even thoug there are times when the MLS photo does not match the house , or that the google earth does not get you to the actual place . Either way, the opinion we make is mostly based upon the the cumulative information for the comparable based upon a historic sale ; and NOT just the exterior. With climate change – and more and more areas being ripped apart or destroyed with natural disasters – as well as other issues like markets falling & people re-habbing etc. times need to change for this requirement. Historical data cannot be changed with the present .
I think the larger argument should be that we have been data mined for several years and are now loosing appraisal assignments to the Auto Underwriter. This is a double slap in the face in light of now loosing some of the better appraisal assignments to a computer program that does not leave its desk to take pictures but rather, uses our appraisal data to cut us out of assignments. I’m pretty sure the computer software program is not taking personal photos as over the past 28 years of my appraisal career, I have yet to see a software program taking a personal photo of the subject or comparables.