Comp Checks vs. Sales History

Surprisingly, there are still individuals and/or entities out there that will call and tell you they have an appraisal order, but before they spend their money or their client’s money they want to see if they could get a comp check to determine if the value is there for the loan to go through!! Of course they ask in many different ways – estimate of value, your take on the value, will the value come close to the number!! They want to hear a number.

Amazing as that may seem, post HVCC, it is still happening. We’re not real sure what value the HVCC has given to our industry, but unless we believe we can contrbute to this widespraed discussion, we will, to paraphrase a prayer…. accept the things we cannot change; have the courage to change the things we can; and the wisdom to know the difference.

That said, what has to be understood is that if an Appraiser gives a value number, range, value judgment, etc etc, he or she has in fact given an appraisal. By giving this information the Appraiser would be in violation of USPAP if it were not developed properly:

“If an appraiser is asked whether a specific property has a value (a point, a range, or a relationship to some benchmark), that request is for an opinion of value (an appraisal). Appraisers, obligated to comply with USPAP, must develop a real property appraisal in accordance with STANDARD 1. Communicating that value opinion must be accomplished in accordance with STANDARD 2.” AO-19 USPAP

So, this is probably why an ethical appraiser would not give any type of value to this type of request. USPAP does not allow an Appraiser to accept an assignment based upon a pre-determined value.

Therefore, the Sales History concept is, in our opinion, a fair and reasonable alternative. It reports a listing of all sales in the subject’s market area for a time period and distance agreed upon. It shows the requestor the size, location, style, price and time of sale. The requestor can then compare the presented information to what is known about the subject and better make a decision about the loan possibility.

Everyone deserves to be paid for their services. Surely the person or company asking for the comp check anticipates that. The Sales History is a way for the Appraiser to help with the decision making process without rendering a value opinion and quite possibly violating USPAP. Appraisers hope that the effort made by giving the history report would position them for the opportunity to get the actual assignment – therefore their pay.

This is an acceptable cost of doing business!

 

Tagged as: appraisal, appraiser, Charlotte North Carolina, Comparables, credit unions, Data, Fannie Mae, fha loans, home loans, Home Values, Market value, real estate appraisal, refinancing, Residential