Valuation Management Group has seen a rise in the number of revisions being made to the comparable sales after the original submission of an appraisal report.
Here are a couple of recent examples:
Comp Example 1: The photos provided by the appraiser show a home that has a new roof, updated kitchen, updated bathrooms and in overall good condition. However, the home had been on and off the market for 5 months and had 3 contracts over the same period of time. A call to the listing agent revealed that high radon levels were detected. This fact was not disclosed in the seller disclosure because the radon levels did not exceed the threshold; however, they were higher than normal and clearly caused the potential buyers to have concerns and second thoughts about purchasing the home.
Comp Example 2: The MLS photos show a home that had been renovated with a high end kitchen and updated bathrooms and the home would appear to be well maintained. MLS data also noted that the home was on the market for over 5 months in an area where the typical days on market are less than 3 weeks. A call to the agent reveals, and I quote “the pictures are deceiving. The home needs to be renovated.” The seller disclosure only indicated that there had been a prior roof leak.
In both cases the appraiser was looking at just the listing and the photos and not researching the listing history, resulting in the appraiser reporting a comparable to be in superior condition than what the actual condition was at the time of the sale.
These examples illustrate the need for the appraiser to take the extra step and contact the real estate agents who are familiar with the sale that is to be used as a comparable. Taking that extra step could save the appraiser from rating and reporting a comparable’s condition or quality inaccurately.
Fannie Mae’s CU findings might also indicate that the condition and/or quality differ from peer and model input, so when reporting the condition of a comparable it is best to investigate and contact the agents involved prior to writing and submitting the appraisal.
Valuation Management Group recognizes the quality appraisals that our appraisers strive to provide. By taking this extra step in their research, they might save themselves a lot of time down the road.
Valuation Management Group is a national, full service appraisal management service company that manages the appraisal process for banks, mortgage bankers, and credit unions. We offer the full array of commercial and residential appraisal products and services. We take the appraisal process from ordinary to extraordinary.