Appraisal Nightmare

March 14, 2011 at 7:07 pm | Posted in Uncategorized | Leave a comment
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So I got an appraisal request a few months back. I don’t recall the exact date, but let’s just say that it got lost in the shuffle. I’m writing about it because the client called to check on the status about 10 days later, at which point my reaction was “ummmmm”. This is totally out of character for me as despite my “organized chaos” system, I never misplace a file in process.

Here’s a little background on this particular order. It was for an older home on the west side of town- so like 55 miles away. That’s way out of my preferred coverage area, but back in 2006 I appraised that same house for the same borrower and out of state small bank. Back then it was worth a decent amount. Large lot, nice home, horse property, well kept. Turned out that the borrower was going to cash out some of his equity to start a business- back then.

When I got the call to reappraise the home now, I instinctively accepted the work- not because I mind the drive, but because I had established a rapport with the contact at the bank- despite the fact that I never received any other business from them. Also, my business has changed since 2006. Back then I was doing triple the volume of work for a fee split. So when I’d drive across town to do an appraisal, I’d have at least 1 or maybe up to 3 others that I could knock out the same day. Today I only do full fee work and since there is no split, I actually turn down most work that is outside of a “convenient” coverage area. However, with this case, I accepted the assignment…

So when I got the call from the client, I went to look up the prior order so that I could print out the prior sketch. This is great for “redos” as you really don’t have to remeasure the property or re-enter a lot of the basic information like the neighborhood description, legal information, address, construction materials, etc.. I just bring a copy of that sketch and make notes about any changes since the last time. First problem was that sometime over the prior 4 years, I changed computers and I had to retrieve the old file. I had the work file of the property of course, but I really needed that electronic copy of the appraisal. I then pulled comparables based on the basic property characteristics and considering where the market is today, that was like pulling teeth as volume of sales has gone way down. So i got some good sales and made the trek out to the home…

When I got there I was in shock at what I saw. The house had been modified, and when I say modified, I mean the floorplan had changed. So I had to remeasure the home from scratch. No problem- I’ve got my trusty Disto laser tape measure. But of course, instead of being 1,600 square feet, now the house was 2,700 square feet. So now the comparables I brought with me are bad. I always pull comparables based on the property characteristics before I visit the home- BASED ON WHAT I THOUGHT WAS THE HOME! As a small shop, I make hay while the sun’s shining and in this case, I had no trusty internet access and no way to pull different comps. I have subsequently purchased a Droid, so that won’t happen again. I called an AMC that I’ve worked with for years so that maybe they could help- no joy as they were all out of the office. Meanwhile I’m thinking “I do not want to drive back out here! I do not want to drive back out here!”

Finally, I called up my old mentor in California- heck he’s an appraiser so he walks the walk. I have to give him the MLS website URL from memory, give him an over the phone lesson on how our MLS works and then give him what I think are good search criteria. It took half an hour but by gosh, we did it. He was able to provide me with 4 closed sales and a few pendings and actives that would help me out. I drove those homes, snapped my photos and headed on back- to the East side.

Now some apprasiers would simply leave and then pull data on their own later. Then they’d copy photos from the MLS and use those for their reports. And some better apprasiers would do that and then go back out and take photos of the comps. But I’m too lazy to make that second trip. And I’m an appraiser who recognizes that you need to physically see each sale in order to compare it to the subject. I’m not trying to brag too much here- just show how a little knowhow can make up for not being as prepared as you think you are.

Visit our website at http://www.advantageappraisalsllc.com, and if that doesn’t roll off the tongue, just try http://www.appraiserdude.com. Or now you can follow us on Twitter at @appraiserdude AND we just added a Facebook page at http://www.facebook.com/appraiserdude. Give me a call at 480-544-1217 if you have any questions. I look forward to working with you.

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