Appraiser Reality Series Part II; Did you Miss Part I? Better stay tuned!

In case you missed the start of my Reality Series, Here is a link to it below. If Active Rain decides to Feature this Blog, maybe more eyeballs will be able to take advantage of all the information I plan to provide, so you can pass along to your Sellers and Buyers and fellow Realtors!

Reality Series Part I

Part II: When appraisals are completed and sent to the lender, they are reviewed by Underwriters. These people may not be Appraisers at all and many times they do not even live in the same state as the appraiser....so needless to say sometimes their reviews lack expertise and some of the requests of appraisers go beyond crazy. Just ask an appraiser about the wildest underwriter or reviewer question of their appraisal reports and you will get an ear full!

Well I have been appraising for 17 years and this week I had a review that really takes the cake...

Here goes:

The first question was what is the difference between Average+ and Good condition!! To me this is Appraiser 101, but this will be good information for you as it will show you how we make adjustments for condition of a property. First of all you have the ACTUAL age of the home. It could be 30 years old. Then you have what we call in the appraisal world the EFFECTIVE age....That is the age that we decide the home appears to be based upon how well the home has been maintained and if there were any renovations performed. Typically the labels we use for condition range from Poor to Good. Poor, Fair, Average, Average+, Good. You might see a Very Good or Excellent label, but most times you will not see Poor or Excellent on a report.

Poor: Well the home is in really bad shape cosmetically and structurally too and it may be one to PUSH over and start over again. Fair: needs work, mostly cosmetic, it shows its age plus some, but it can be renovated. Average is just as it seems, it appears its ACTUAL age. Average+ it is above this Actual age to a certain degree, because the home has been taken care of and maybe there was some new carpet or appliances along the way. They don't have to be upgraded or top of the line renovations. That falls under the QUALITY rating and that will be the subject of another series. Good: The home has not only been taken care of but renovated, so it appears like new or it may be new. I am sure you have seen a 2 or 3 year old home that is trashed, so just because it is only 2 or 3 years old, does not mean we will would rate that GOOD condition. It depends on maintenance and renovations along with age. Excellent is BRAND spanking new.....many times appraisers will just call this GOOD. There is some leeway between appraiser's but overall, the condition labels should be fairly consistent. As for the adjustments for the variances, well they can be wide and varied, depending upon the price range, age of home, amount of renovations, etc.

I think the poor reviewer in my case (which by the way per new regulations is supposed to be someone trained in appraisals or an appraiser, not just some employee who has no clue about appraisals) was confused because I was calling a few 30 year old homes Average + and Good and she was thinking a 30 year old home cannot be good! Well it can be if it has been renovated and maintained and it is in like new condition.

Then the reviewer really threw me for a loop.....She asked why is there a need for an electronic fence "see photo of mailbox" which had a sign saying there was an electronic fence ... I about fell off my chair....HELLO....The owner has a dog! Common thing here in Georgia and everywhere! So I told her they have a dog, no other reason for fence. So I am trying to understand why such a question would be asked. Only thing I could come up with was the reviewer (in another state) must think this is one BAD A_ _ neighborhood to require an electronic fence! LOL Maybe they don't want to do the loan if there are issues with marketability, etc. I think they are going off the deep end here. If that was the case, we are supposed to report all market and neighborhood issues! Of course there were no issues, so nothing was noted in the appraisal.

So that is my second series for this week. Look for Series III next week,

Thanks for stopping by.

Mary T. Thompson

Certified, FHA Approved Appraiser

http://www.marytappraisals.com