Cynthia Sulamo

The listing and pending dates in MLS are more important than ever to be accurate.

Appraiser are required to report the days on the market for the subject and comparables along with analyzing typical marketing time and the changes in marketing time. Yes lots of data is now required and being reviewed more closely than ever before.

In April of 2009 Fannie Mae is requiring a new form be added to appraisals which will require even more indepth analysis of marketing times and market conditions. In markets were there are alot of sales incorrect information on one property will not skew the results like it will in markets that are seeing few sales.

Underwriters and reviewers are pulling market data and comparing it to the appraisals and when the information they get does not match the appraiser is contacted to clarify the information or correct it. So this slows up or stops the loan closing! Keeping the process smooth makes clients happy, increases repeat and referral business.

So be watchful of pending and close dates in your MLS listings so we can all work towards a smooth process and happy repeat clients!

Change Change Change . . . .

That's one thing we can count on! Keeping up means keeping connected and now days keeping connected can be easier than ever before.

What's new on the FHA horizon? Well word has it as of 10/1 or 11/1/2008 still waiting for a clarification and written explaination the FHA case number must be assigned PRIOR to the appraiser inspecting the home. Calls to Santa Ana HOC resulting in conflicting information so still waiting on an answer in writing.

One thing is clear, for Reverse Mortgages the counseling certificate must be done and signed by BOTH parties prior to the appraisal inspection or the borrower cannot be charged for the appraisal.

Senate Bill 223 prohibits anyone with an interest in a real estate transaction from improperly influencing or attempting to improperly influence the results of an appraisal sought in connection with a mortgage loan. Find out more.
Full text of Senate Bill 223

Now before you fall asleep or click off to another spot take a minute here. This sounds simple yes? Most of us do not want to improperly influence the results of an appraisal but how is this interpreted by others? I was in a meeting with our state officials and they are asking appraisers to let state licensing boards know if we get requests or emails that state anything to the effect "you will get the appraisal if there is a minimum value of XX or please comp this we need xx to make this deal work" innocent question? Not everyone thinks so and some appraisers are so "starved" for work they take that statement as a challenge to "find a value" even if that is not the spirit in which you intended it.

With Senate Bill 223 you can lose your license (any California License) if you are found guilty of this. I do not know how this is determined or the process in which it is determined but your license is your lively hood. So be careful! Appraisers cannot give you a value without an appraisal, no way around that, no loop holes and no joke.

I felt it was important to post this as in my last post I said I felt giving appraisers all the information you can would not be considered "pressure or improper" but others may interpret what you say and how you say it differently. So make your self familiar with the SB223, because what you don't know CAN hurt you.

It seems the rules on comparables are different depending on the type of report being done, or so I am hearing. That explains alot of the confusion.

For appraisals - most lenders require at least 2 of the closed sales to have closed within the past 90 days. In addition to the 3 closed sales there is now a requirement for 2 pendings or listings be in the report and adjusted as warranted by the market.

Yes guidelines do vary by lender. How? We have a multi layered system of guidelines. It starts with the federal rules, then state, then each individual lender. Each layer can be more strict or add additional requirements but they cannot relieve the requirements set by the layer above them. Therefore the state can add to the federal rules and the individual lender can add to the state and federal.

I am hearing that for BPO's agents can use sales up to 18 months old? At least that is what I have heard from local agents in this area. It is understandable why there would be confusion.

I often have realtors give me comps they have run which are 6months+ old and it can be interesting to get them to accept that our guidelines have changed so much as it was only a year ago that we could use sales up to 6 months old and in years before that we could go back 1 year (and more with proper explainations)

So our world has changed . . . . and it will again.

In this new environment it is a reality that the appraisal is ordered near or at the end of the loan process which means "all we are waiting on is the appraisal" has never been so true. No deal is a done deal until it's closed and recorded.

So . . . how can you effect faster turn times without compromising the quality of your appraisal?

1. Provide complete and accurate information about the subject property. There is nothing like being one number off on the address to add unnecessary time to an appraisal. Provide your appraiser with as much information as you have, tax parcel number, subdivision name, PUD information or anything else that is relevant to the subject property. Your professional appraiser will even welcome lists of recent sales you used in setting your list or contract price - though the appraiser must always do their own due diligence on comparable sales and they may differ from yours. Provide the complete sales contract with the order and FHA case # if the order is FHA (the assignment letter is best to prevent any error in the number on the report which will unnecessarly delay the underwriting process).

2. What is unique about the property? Let the appraiser know upfront of any unique features, has it been recently remodeled or are the zoning restrictions, repairs needed (missing water heater? thermostate for CH&A missing?) these items will be apparent when the inspection is done but it will allow the appraiser to better prepare for the inspection and narrow down the comparable search for better comparables, knowing them as soon a possible allows for a quicker turn around time for your appraisal.

3. Are the occupants of the home aware of what to expect? Setting the appraisal appointment can be a time consuming part of the process. Some homeowner are uncomfortable with a stranger in their home looking around and making notes. Some think the home must be spotless before the appraiser arrives so they put off the appointment. Letting them know dusting and polishing will not make it more likely their loan will close can go a long way to trimming time it takes to inspect a home. Let them know it is in their interest to set the appointment as quickly as possible.

4. Putting any concessions in the financing comments of MLS will help everyone as we are required to ask on each closed sale and disclose concessions so having them in MLS means fewer phone calls to get the details.

A well written and supported report is extreamly important and getting it to you as quickly as possible without compromising the report is the Professional Appraiser's goal.