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Anybody see anything wrong with this?

Got some particular verbiage you like to include in your reports? Methods of dealing with EA's or HC's? Just be careful not to post copyrighted material--particularly out of an appraisal course.

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Anybody see anything wrong with this?

Postby Jim Plante on Wed Apr 09, 2008 12:57 pm

From a recent report on a rural house/11 acres:
Other Amenities: The subject has a metal-sided workshop on a slab, with an improvised roll-up door. It also has some old farm fencing which might be valued in use, but I can show no market preference for farm fencing, nor any evidence that a buyer will pay more for a property that has it. There is also a small pond on the property which the owner said he just finished building. It looks like a mud hole at present. It is far enough away from the main house not to detract from the house's value, and it will look better when the grass gets established on the banks this summer. I attribute no value to the pond (ugly) or to the fence (old) because of a lack of market or anecdotal evidence to support an adjustment.

Sale #1 has a similar workshop, and receives no adjustment.

Sale #2 has a small utility building and a swimming pool with a wood privacy fence. Market studies performed for other appraisals indicate that small swimming pools contribute only about $5,000 to value. This area has a lot of deciduous trees; in the fall, all the leaves head for the nearest swimming pool. Experienced owners dislike swimming pools unless they're moving here from Florida or California, and don't know about our trained trees. Many local owners see pools as a liability issue as well. The -$5,000 adjustment is based on market studies, my judgment, and input from realty agents.

Sale #3 has only a 24' x 38' concrete slab, which is used as extra parking at present. It appears to me that this slab will one day be enclosed as a garage or carport, but right now it's just a slab. The subject's amenities contribute about $5,000 more in value in my opinion. And that's all this adjustment is based on—appraiser's judgment. There is no market evidence to support it or to prove me wrong. I don't think a buyer would pay significantly more to have a concrete slab in his yard; the subject's workshop, fence, and pond contribute about $5,000 to its value, so calling this sale $5,000 inferior is as close as I can come until more market evidence is available.

Reconciliation of the Sales:
Sale #1 is a fair-quality house that looks like it was built by someone who couldn't find a property to flip. Corners have been cut everywhere that's visible, so I assume that corners may have been cut in the structure and foundation as well. I don't like this house, and don't consider it a very reliable indicator of the subject's value. Sale #2 is a solid house in a good neighborhood. It has been totally remodeled on the inside, and the exterior is very well maintained. Its age and location, however, keep it from being a primary indicator of value. Sale #3 provides a house that is most like the subject in quality and finish. It's not as well situated as the subject (further from town), but offers the privacy and land area that many rural buyers seek. I place most emphasis on Sale #3, with support from Sale #2. I would discard Sale #1 from analysis altogether, but I would have to use a golf course related property on Blanton Road instead. Sale #1, with all its faults, offers a better comparison and fewer adjustments.

Comments? Criticism? (Note: It lost most of the formatting on copy and paste.)
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Postby WM on Wed Apr 09, 2008 1:05 pm

Well, I guess it is better than not explaining yourself at all. :rof:
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Postby Otis on Wed Apr 09, 2008 1:07 pm

Well, isn't that special (SNL best impressions extended). I especially like
I don't like this house


And what the heck is a "improvised roll-up door"? That reads more like it's from a real estate sales person than an appraiser.
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Postby Chris H on Wed Apr 09, 2008 1:17 pm

The appraiser is trying way to hard to write to the mentality of the mortgage broker that hired him/her. :shock:
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Postby Edd Gillespie on Wed Apr 09, 2008 1:23 pm

Where's the objectivity? If he had it he hid it. We are supposed to give our conclusions based on facts. Appraisers don't get paid to express their feelings. Well, actually they don't get paid much for anything at all.

Contrary to some of the Simon Cowell-like comments above, I think the guy is trying hard to do his job and he has obviously done a detailed, if funky, description, but like most appraisers has had little or no training or guidance in how run a PC's pineapple slicer or to communicate.

I actaully think he did a pretty good job of anticipating UW questions in advance.

Find the facts in there if you can and see if he supported his conclusions. Don't let his poetic meanderings distract you from your job as a reviewer (I assume that is what you are doing). Send him a side note to keep it factually relevant in the future. Do not nit pick him unless it really makes your day.
Edd “In the real estate economy, there are no guarantees that reason will prevail in a market where emotions run high and the amount of misinformation runs deep.” Jonathan Miller in The Matrix. So what’s an appraiser to do?
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Postby M L on Wed Apr 09, 2008 3:29 pm

:lol: The comment about the trained trees is funny... but don't include it. :wink:

Also agree with Edd, change all your personal preference comments. Rather than saying you don't like it... say the market recognizes lesser quality of construction, and an adjustment is necessary.
Last edited by M L on Wed Apr 09, 2008 4:18 pm, edited 1 time in total.
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Postby Edd Gillespie on Wed Apr 09, 2008 3:55 pm

Hey, I'm Edd, you cracker.
Edd “In the real estate economy, there are no guarantees that reason will prevail in a market where emotions run high and the amount of misinformation runs deep.” Jonathan Miller in The Matrix. So what’s an appraiser to do?
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Postby M L on Wed Apr 09, 2008 4:20 pm

Ooops. :lol: Dint proof it. :shrug:
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Postby Jrs at OBX on Wed Apr 09, 2008 4:35 pm

Trained trees?? I wonder if I can train my tomato plants to grow bigger tomatos.....
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Postby Jim Plante on Thu Apr 10, 2008 10:00 am

How about this portion:
Sale #3 has only a 24' x 38' concrete slab, which is used as extra parking at present. It appears to me that this slab will one day be enclosed as a garage or carport, but right now it's just a slab. The subject's amenities contribute about $5,000 more in value in my opinion. And that's all this adjustment is based on—appraiser's judgment. There is no market evidence to support it or to prove me wrong. I don't think a buyer would pay significantly more to have a concrete slab in his yard; the subject's workshop, fence, and pond contribute about $5,000 to its value, so calling this sale $5,000 inferior is as close as I can come until more market evidence is available.
Would you nail this portion for inadequate support, or would you allow the support given. (Note: Value is 223K: Client & users: lender & Fannie; Purpose: Market value; Use: support for refi.)
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Postby WM on Thu Apr 10, 2008 10:15 am

I've used judgment as support before. Sometimes it's all you've got.

I sure as heck try to avoid it though. If I was forced, I'd also try to apply a qualitative adjustment rather than a dollar amount.
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Postby Annemieke Roell on Thu Apr 10, 2008 10:25 am

Send that appraiser back to school for some Basics 101
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Postby Steve Owen on Thu Apr 10, 2008 10:29 am

I'm with you, Edd. But, like WM, I have no problem with using judgement for support if that is all there is (working on one like that right now).

The posted comments represent a good reason not to try to explain very much in a summary report... such explanations should be left for self-contained report formats, which are done mostly by GA's who should (but, sadly, do not always) know how to write the comments without bias.
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Postby Edd Gillespie on Thu Apr 10, 2008 10:31 am

Jim Plante wrote:Would you nail this portion for inadequate support, or would you allow the support given. (Note: Value is 223K: Client & users: lender & Fannie; Purpose: Market value; Use: support for refi.)


I think, unless the reviewer as some sort of support to unequivocally and objectively overrule what the appraiser is using then the reviewer is well advised to let it stand. In other words, what do you have to argue with other than your own ya ya.

The guy told you he is using his judgment, what is wrong with that unless you have evidence his judgmet is bad or wrong?

This guy has sort of kooky way of saying things, but is sort of refreshingly honest in a way.
Edd “In the real estate economy, there are no guarantees that reason will prevail in a market where emotions run high and the amount of misinformation runs deep.” Jonathan Miller in The Matrix. So what’s an appraiser to do?
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Postby hallmac on Thu Apr 10, 2008 11:08 am

I find that refreshing.

What I see is an appraiser trying to support his opinion and explain why and how he reached it. Is it an experienced appraiser or a newbie, I think the methodology and explanations indicate that well enough. Right or wrong in the end the appraiser appears to be trying to do it right.

Given a few years and the correct positive support this appraiser will not be a problem. They took the time to write full and assignment specific comments. The appraiser could have done like most and used boiler plated generic comments from five years ago. Ripping them apart for giving their best attempt is not only bad for the field but shows how small and afraid the peers in the field are. The clients will determine correctly in the end how his business will end up. There appears to be enough information included to determine the experience, qualification, and accuracy of the Opinion of Value and it's creator.

I am willing to bet that this was not a 2 hour, one of four completed that day, appraisal. I would be more likely to invite them here and welcome them, than to call them a quack and run them out of the business.

Are the comparables used reasonable? Does the available information agree or disagree with the conclusion reached. At least Edd was able to see that this appraiser, regardless of his style, gets the idea of what the job is really about.
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