Appraisers' Free Forum

http://liability.com/claim_detail.asp?ClaimID=102

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"Appraiser’s ’Inventory Analysis’, ’Median Sale & List Price, DOM’ and other observations in this addendum are based on the data source identified above, which appraiser generally believes to be a reliable source of market data. However, the appraiser cannot verify all of the information in that data source and cannot guarantee the accuracy of such data or conclusions based thereon."

"The appraiser cannot guarantee future market conditions affecting the subject property."

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Having used this now a few times, the Product is flawed in regards to accuracy and use. Don't kow about your area, but we have insufficient data for any real accuracy.

I have applied the necessary caveats - but it most definitely consumes mucho timo and adds writing to the report; all the advantages of past work packages has now surpassed the report contents of the 80's & 90's with regards to our "Time". Typical reports should run around $500 +/- per report today.

Costs; Ink is significantly high / paper costs are double / Town Hall Cost (Deeds N such have doubled) / Flood Maps are costly / Maintenence Fee's are Up / Software Costs have increased and are being broken out / Map programs are costly / Gas & Food have increased / License Fees have increased / Court Costs hve increased / Battery Costs have increased / Windshield Wipers have increased ($40 for my last set) / Tires have Increased / My little rubber duck for my tubby time have increased. So where is the compensation ?

MAN!

This place is a great source of information!!!

are based on the data source identified above, which appraiser generally believes to be a reliable source

Doesn't it already say this in every report?

Jay Trotta wrote:Don't kow about your area, but we have insufficient data for any real accuracy.

I was just in a class with appraisers from all around Missouri. Some of our rural counties do not have any MLS... and we are a non-disclosure state. He said, that he has been putting a comment on each narrative space in the form that there is insufficient data to be statistically meaningful for these reasons. And, so far, he hasn't heard a peep back.

Steve, I don't think the "Peepers" are going to talk yet

this, to me is just another noose around the appraiser's neck; it won't catch the Bad Guys either - it's just a bunch of gobble de gook

Having now read some real "Solutions" to the housing problem on the internet - I think we can all rest assurd, that folks that have spent "0" time in the real estate business have all the solutions.

Am just wondering why it has taken them 2 years to come up with the solution they offer ??

Jay Trotta wrote:Having used this now a few times, the Product is flawed in regards to accuracy and use. Don't kow about your area, but we have insufficient data for any real accuracy.

I haven't used the product and possibly (probably) never will. Nevertheless, the comment caught my attention. I like peppering my reports with those kinds of clarifications because I believe it helps protect me while also aiding the reader in understanding what the appraisal process is and does. I modified it a little, see what you think:

COMMENT ON MARKET CONDITIONS ANALYSIS

The appraiser’s analysis of market conditions, including inventory and absorption rates, median list and sale prices, average list and sale prices, average days on market (DOM), and any other observations in the Market Conditions Comment addendum are based on the data sources identified therein, which appraiser generally believes to be reliable sources of market data. However, the appraiser cannot verify all of the information in such data sources and cannot guarantee the accuracy of such data or conclusions based thereon. Any forecasting analysis is based on past and current data and the appraiser cannot predict or guarantee future market conditions affecting the subject property.

Any forecasting analysis is based on past and current data and the appraiser cannot predict or guarantee future market conditions

Are you claiming that your conclusions are forecasts, rather than results of retrospective analyses of had been going on prior to the effective date?

Forecasts are a requirement if you are going to accept relo work. By using the word "any" I am attempting to make my disclaimer universal. If you think that won't work I might consider changing it so that "forecast" is only used in the relo template.

I think -
-the instructions have been vague in 05, 02, etc.
-there are other appraisers who think the neighorhood conclusions are forecasts based on answers I got posting this question in the past.
-Fannie might have been clear enough in the latest guide on page 462, in saying "as of the effective date." That indicates to me the analysis is retrospective, covering the exposure period, and it also indicates to me that Fannie has been using the term "marketing time" to mean what the ASB thinks "exposure time" means.
-your concerns about forecasts and the word forecast are appropriate, and that is part of why ERC appraisals cost the client more. And I would recommend making it clear, citing page 462, that this is not any kind of a forecast, and you believe that Fannie's use of "marketing time" actually corresponds to the ASB's term "exposure time."
-Part of Fannie's inability to be clear on this topic is her incessant use of the present tense. I can understand that up until the effective date, the market WAS rising/falling. I can understand a forecast saying a market WILL BE rising/falling. However, when you say the market IS rising, does that mean right this second only? (Shades of SMT-3).

Page 462 is the ONLY published information I viewed. I'd review all docs to nail this down.

Stuck in the middle of this is the ASB's "opinion" that "marketing time" means going forward from the effective date, and the appraising is saying rising market and over six months marketing. What "may rely" person couldn't put all that together to infer reasonably(?) that the appraiser said the value would be higher and higher over six months down the road, that's why I bought, and the gain I didn't get on re-sale is the appraiser's liability.

I have always found it interesting that many appraisers check the "over six month" box thinking this makes the appraisal more cautious. But anyone applying the ASB interpretation of "marketing time" is free to infer you mean the neighborhood trends checked off will last more than six months into the future.

Within all the misunderstandings of "what is meant" by any line in either FNMA's or the ASB or anyone else confirm's my conclusion that it is a "vast & tedious" land we travel upon in the time line of appraising.

Funny how when building a house, you use the "Code's" with which to construct an end result product; to the contrary "Appraising" constructs the "illusion" of an end result, which cannot be concluded. I guess this is why Builders make and deserve the profit of the end result of their work, while we appraisers have been forced to accept whatever is offered and our end result is what it is. We have no "Code".......hmmm

Selected passages from my 1004MC comment cell.

Very small, rural and somewhat remote farming, ranching and recreational area. Long term stable market with many properties held in the family for generations. The 1004MC is not appropriate to this type of market as there is inadequate information with which to populate the form. See the main body of 1004 report for market data, conclusions and opinions. Five closed sales in the previous 12 months none of which are particularly comparable to the subject property.

Statistical analysis is not reliable for this market (The Sea Ranch) due to very limited samplings and little conformity between properties. The above data is based on ALL sales during the previous 12 months and ALL current listings and pending (contracted) sales. Some declines in pricing for non oceanfront locations or properties with limited ocean views, but reasonably stable pricing and typical inventories for ocean view property and no change for oceanfront property. Overall median and average price down 8%-10%% . See comments in main report.

Due to the rural characteristics of this region, the lack of ideally similar comparable properties to have sold or on the market at any given time, and inconsistencies in the MLS data this form is not suitable for it's intended use. LCAOR includes the escrow period between a sales contract and the eventual closing. This time period varies widely for many reasons not associated with actual exposure time. See comments in the main body of the report. Inadequate sampling for reliable statistical analysis.

If the form covered 5 quarters I think it be more meaningful and much more palatable (at least to me). In Ohio and I would guess most of the Midwest and Northeast there are real seasonal patterns that make the 1004MC less meaningful. Inclusion of a 5th quarter would illustrate the seasonal fluctuations.

Jan Roseberry wrote:If the form covered 5 quarters I think it be more meaningful and much more palatable (at least to me). In Ohio and I would guess most of the Midwest and Northeast there are real seasonal patterns that make the 1004MC less meaningful. Inclusion of a 5th quarter would illustrate the seasonal fluctuations.

Believe it or not, the rest of the USA is also seasonal.