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Why Do Appraisers Keep Overreporting…?
Another friend has provided a copy of an appraisal on the friend’s home.
Good golly, miss Molly… Why do appraisers keep overreporting comparable property data, which really isn’t comparable?
This subject property is an 1,100 sq.ft. single story home, in a near-beach side community, with partial marine view, not on WFT, in a suburban location. Similar ‘comps’ are extremely limited (no more than 6 sales and 2 listings) due to its GLA, location, age, etc., based on the appraiser’s report, and my own research from multiple searches which proved similar comparable properties are almost non-existent.
The report has 4 sales and 2 listings.
This is what the appraiser has indicated on report form page 2:
The MC Form has this:
When actual COMPARABLE properties are no more than 6, this appraiser has stated in the report that there are 99 COMPARABLE sales. How is that possible? The appraiser has also reported 27 COMPARABLE listings, when in reality, only 2 or so exist.
Then, let’s consider the appraised value, which is not quite $282,000.
How is a $90,000 or a $1,275,000 property, or a listing up to $1,499,000 even remotely COMPARABLE to the subject?
They are not.
What the appraiser has done is disregard the requested data on the forms, and drawn a circle around the subject location, and reported ALL the properties in that area. An incorrect procedure. Reporting ALL properties is absolutely NOT what FNMA and FrMAC (and everyone else) expect us to do, or for that matter, the lenders who pay us for correct data, but are not getting it.
In other words, the appraiser is not selectively searching for appropriate comparable properties to report on these parts of the appraisal report form.
This is not the first time I’ve seen this overreporting of non-comparable property sales and listing data, and written about it. I suspect it is a chronic misconception among appraisers.
The correct procedure is to report COMPARABLE data, not everything including the kitchen sink. If your MC form only has 1 sale, or even ZERO in a particular column, so be it. Report accurate COMPARABLE data.
And quit overreporting.