Sketch or Floor Plan?

Dave Towne

Sketch or floor plan requirements for Desktop and Hybrid reports. 

The FLOOR PLAN has all the elements of a SKETCH…

Appraisers, I was given some ‘inside info’ about DESKTOP assignment reports being submitted to the GSE’s – incorrectly.

The FLOOR PLAN exhibit in these DESKTOP reports, in some cases, is not being done correctly.

Let’s examine what is actually required as a diagram showing the dwelling:

First, when the appraiser certified that they, or their trainee, have/has made an on-site personal visit to the property and has measured the dwelling, only a SKETCH is required – unless interior design problems are noted, in which case the SKETCH must be upgraded to a FLOOR PLAN. This is per both GSE’s Selling/Seller Guides. This is a requirement for ‘traditional’ Interior/Exterior appraisals fully done by the appraiser.

Second, the SKETCH must include exterior wall dimensions, and there must be calculations included which show the GLA and other space calculations. The ‘sketching’ program included with report software (or available separately) does both of these functions easily and correctly, per the appraiser’s input. Neither ‘Guide’ says that room location labels must be included, but most appraisers do that. Some appraisers include doors, fireplace and/or stove images, etc., within the SKETCH to show functionality, but those items are not required per the GSE’s.

Shifting now to the new DESKTOP (and HYBRID) reports, the diagram exhibit requirement is a FLOOR PLAN. That’s because the appraiser is not the ‘inspector’ and the GSE’s want to be sure there are no functional issues with the dwelling.

The FLOOR PLAN has all the elements of a SKETCH (noted above), with the addition of interior wall placementsNote that this FLOOR PLAN diagram MUST include exterior wall dimensions and the space calculations.

Apparently what’s been happening is appraisers are accepting DESKTOP assignments and are using any floor plan diagram they can find which may not have all the appropriate dimensions or calculations on or with it. The GSE’s will not accept DESKTOP (or HYBRID) appraisals unless the FLOOR PLAN diagram exhibit is done correctly.

You can, if needed, include additional exhibit pages showing the dimensions and calculations. But appraisers doing DESKTOP (or HYBRID) reports CANNOT use as an exhibit only a basic FLOOR PLAN without dimensions and calculations. Floor Plans showing only INTERIOR room sizes are not acceptable!

Instructions from the GSE’s say that the “appraiser must have sufficient information to develop a credible report.”

If you cannot get necessary exterior wall dimensions and space calculations for the FLOOR PLAN, then you must decline the DESKTOP (or HYBRID) assignment and have it converted to a full ‘traditional’ report.

Another note: the FLOOR PLAN submitted with a DESKTOP (or HYBRID) report does not have to be done per Fannie Mae’s ANSI Z765-2021 Measuring Standard on or after April 1, 2022.

Image credit flickr - Seoul Sketchers
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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13 Responses

  1. Avatar IMJSAYN says:

    Still not doing them!

    7
  2. Avatar Dave says:

    I can not imagine any educated appraiser engaging in this no money maker activity. Anyone here see any financial incentives???
    Dave

    6
    • Avatar Tom B. says:

      The lenders that have contacted me say they are paying full price. Whatever your normal fee that’s what they pay for a desktop.

      I don’t understand how you verify a floor plan though. You are supposed to very any data you are given through a disinterested party.

      1
      • Baggins Baggins says:

        Our local corelogic matrix mls came forth with some ‘source of measurement verification’ deal. Three drop down options; public records, appraiser measurement, and other measurement. Or, something similar to that. I ended up with a few pickles and when challenged, agents whom entered ‘appraiser measured’ could not prove it. After several complaint letters the mls removed that option. Agents were apparently just claiming appraiser measured even though they never actually sought that service. There are currently myriads of listing specific room dimensions such as bed1 10ftx12ft, etc. Would not be surprised if those were off the cuff too, certainly every listing agent out there is not measuring every space in every home to fill those mandated fields but the mls sure provides an illusion there is more specific data rather than less. Then the occasional incorrect data mapping as agent tools allow them to auto fill mls with assessors records, (alamode has that now too), but assessors sites are glitchy for hours or days at a time, sometimes they get data mapping wrong during updates before re correcting. It all adds up to a constant need for redundant verification and general disclaimers that sketches are best of ability estimates.

        I wrote an objection letter regarding 3rd party inspectors and ansi to fannie & this was a line in their response: ‘The new Desktop Appraisal product does not require a third party inspector. There are pilots of other products that do have third party inspectors, but the new Desktop Appraisal product is not one of them.’ This possibly contradicts above authors information, so I just don’t know, not having had a desktop or hybrid request in many years. When I refi’d recently and was able to use the no appraisal option, a realty sales agent completed the equivalent of a 1075 drive by no value report, probably for much lower compensation than the $150+ appraisers used to get for that service.

        2
  3. Avatar Scott says:

    Only a SCAB (strikebreaker) would be doing these.

    My office has said NO WAY to completing these desktops. They REALLY are the beginning of the end.

    4
    • Baggins Baggins says:

      Where is the line? The specific request, or the request coming from an amc in the first place? It’s a locational consideration too. Many appraisers enjoy a limited client set by merits of volume in a metroplex area. We’re entertaining the notion of going far out there but in such a scenario I could no longer maintain a hardline position of do not work with amc’s and still rake an adequate assignment volume. Even if I was approved on every single direct assignment lenders panel, still would not be enough in a small town. As I’ve long since drawn the line and spent vastly more time and effort demanding amc’s stop contacting me then I ever spent working for them, that point is already settled for many appraisers.

      To third party companies like amc’s, desktops are necessary for their volume fulfillment, as their predatory engagement polices basically exclude somewhere between half to 90% or more of the licensed appraiser workforce. And it’s always the biggest amc’s whom have the highest volume lender contracts. Back in the day the yearly appraiser fee schedule survey was often required to be filled out by appraisers, used as a tool for lenders to determine what the majority of appraisers would accept as a standard fee, and that’s what the lender charged consumers for APPRAISER services, (not APPRAISAL services). That was the basis of C&R customary and reasonable.

      Not that way anymore, as amc’s have successfully lobbied to have gse policy altered to fit their needs for maximum fulfillment at discounted cost. These days those taking fee surveys miss the point entirely, asking what appraisers are actually getting under these restrained market conditions, rather than asking what the appraisers would ideally bill in an unrestrained free market competition scenario. And as amc’s have commandeered roughly 80% of all mortgage lending assignment volume, appraisers are no longer even capable of answering the question. The benchmarks to examine fair billing within the gse realm are skewed beyond the appraisers ability to impose reasonable estimates based on what would be fictitious purely hypothetical condition ‘as if amc’s were not the dominant influence for appraiser service fees’.

      The ‘beginning of the end’ was like 15 years ago when the appraisers allowed and accepted profiteering interests of unnecessary third party companies (amc’s) to drive severely imbalanced operational assignment volume trends (lions share), appraisers fees (discounted), and an increasing amount of legislative influence. Now like clockwork whenever some bureaucrat wants info on ‘the appraisal industry’, they call non licensed amc corporations whom hire like one single appraiser yet are multi million dollar companies whose very existence is predicated solely on improperly co mingled consumer billing, raking a portion of the appraisal service fee rather than billing separately for the amc ‘management’ service.

      Individual appraisers can not have fair representation when set in antagonistic positions against a consortium of multi billion dollar a year amc companies and their representative trade groups which now rakes more of the total appraisal service fees than licensed appraisers themselves actually take home. Soon there will be more people managing appraisers then there will be actually licensed appraisers, if we’re not there already. Nothing short of removing the perverse financial incentives for amc’s to drive consumer fees up and appraisers fees down will make a difference. Whatever line in the sand appraisers may perceive is subjective at best, not applicable to the group as a whole.

      This may be related to Tom B’s comment about equivalent pay for a desktop, as that’s traditionally an illogical approach. But if the amc can charge more by way of somehow injecting themselves, or delivering less, regardless of the impact that has on appraisers or consumers, that’s just how it plays out. The very people doing the most harm to consumers are also tasked with ‘managing’ a vital aspect of the consumer protection process in gse lending, and now they are forming gse policy too (hybrids, desktops, ansi, outsourcing to realtors instead of appraisers, etc). Thankfully the amc’s have not made it out of the gse realm, yet. The appraisers whom think they’ve carved out a safe space by refusing mortgage lending work may want to think twice, as the amc industry continues to expand with increasing influence.

      2
  4. Avatar Dave says:

    Paying full price as in the 15 year old fee. don’t believe it for a minute – They hope to get this work for under $400 and in the process dilute the licensed appraiser to review appraisers. Don’t touch it or go near it!

    4
    • Baggins Baggins says:

      No Dave, it’s entirely plausible. But once the appraiser settles in to the desktop, the consumer fee will remain the same, the appraisers fee reduced, and the amc will increase their rake of the improperly co mingled consumer appraisal services fee. Appraisal service billing is like a light switch and once volume slows down, a substantial portion of the appraisal community folds instantly with service fee reductions. After all, such a fee reduction is a financial incentive for many companies to select that discounted appraiser ahead of others. In this conflict of interest billing scenario a discounted service fee becomes a bribe. Amc’s pulled off another dang miracle, they’ve found a way to maintain maximum consumer billing while converting full service down to desktops, are also likely to rake a portion of outsourced third party inspector and measurement program tech fees on the front and back end. The appraiser is required to pay a gratuity fee to close it out, otherwise known as a digital report transmission fee. If you thought paper, stamps, and envelopes were expensive, oh billy!

      1
  5. Avatar Diana n says:

    With the new guidelines for both regular and desktop appraisals appraisers better have good E&O insurance.

    4
  6. Avatar Dave says:

    Just don’t indulge in this run on FANNIE or FANNIE run on us. There is absolutely no reason what so ever (unless you just have no scruples) to be entertaining this slight of hand. As our dear Nancy said – “Just say no”!

    4
  7. Avatar SB says:

    It’s an easy decision…
    BOYCOTT DESKTOPS

    3
    • Avatar Tom B. says:

      So appraisers can’t agree on how to measure a house but when lenders say their primary order will be a Desktop that may have to be converted to interior… then you think appraisers are going to suddenly agree on something to stand against.

      I did two “desktops” during early Covid19 and both turned into a big PITA. Desktops should pay 25% to 50% more out of the gate.

      The real estate industry has forever presented itself as being in the front of the IT realm but it’s really always been 10,20,30 years behind other technology. Seriously, compare an MLS system to say Photoshop. Compare appraisal software to say the recording industry. Don’t’ even think about real estate and the film industry. All rely on IT and we have always been at the bottom of the barrel.
      Just go to Youtube and search NVIDIA Omniverse Jensen Huang BMW. that should get you in the ballpark.

      The real estate industry has forever wanted everyone to believe that they play in that same sandbox. They don’t and never have. Not the basic buy a house, sell a house people that we deal with.
      From what I have seen, there is nothing to boycott. As I have seen my entire career the real estate industry basically sells rudimentary form filling software and vaporware. People that care about their money will hire an appraiser or some other recognized real estate professional to help with their needs and life goes on.

      Appraisers aren’t going to suddenly become of like mind and make a stand. Stand against what? The desktop framework doesn’t even exist.

      2
      • Baggins Baggins says:

        LOL. I’m still trying to get alamode to stop sneaking pop up alerts into my paid software. And the digi transmission software providers such as scope, mercury, others, they still can’t figure out how to give appraisers such rudimentary basic user control options such as ‘accept amc notifications Y/N’ or clearly inform us how many other appraisers any specific bid request was also sent to, etc.
        It took a while but the winning argument appears to be that amc bid spam qualifies as a ‘commercialized email message’, which is not in compliance with the CAN SPAM act, as there is no opt out option for that specific company using these platforms while soliciting the appraiser. If any appraiser wants the amc spam to end, that’s just an FCC complaint away.
        https://www.ftc.gov/business-guidance/resources/can-spam-act-compliance-guide-business
        https://www.ecfr.gov/current/title-16/part-316
        This industry is breaking into a new technical age although slowly. Won’t be long now with 3d modeling digital inspections that appraisers will not be able to believe what they see in third party inspector photos. We already can’t trust quite a bit of mls photos. I’ve had so many solicitations focused on photographers, bragging about all the things they can do for listing photos, take out blemishes, put in new flooring, change lighting, remove furniture and junk, make small spaces appear more spacious. Guess who will be reviewing all the third party digital inspection data, curating and qualifying it before the unreliable biased appraiser is allowed to access… I’ll give you a hint; they won’t be restrained by individual licensing.

        1

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Sketch or Floor Plan?

by Dave Towne time to read: 2 min
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