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Appraisers, Brokers And Buyers: Do Your Homework

Unusual properties require added homework to all parties. [Note: Subscription] [1] Its a good idea for homeowners (or their brokers) with unique properties to do research on similar properties. With the time pressure placed on appraisers these days, they may not have time to look under every rock…of course, unscrupulous clients may not want them too anyway. 😉

Portfolio lenders are less likely to feel comfortable with atypical properties requiring the presentation of a lot more data.

According to USPAP, appraisers are compelled to disclose their competency on a property type they are not familiar with. Here is an article that discusses competency. [2]

One of the most common violations of the competency rule is when appraisers travel to other areas where they don’t understand the nuances of the local market or local neighborhoods. Appraisers who get out-of-area assignments should refer the jobs to local appraisers, get local appraisers to help them select comps or decline the assignment.

It always amazes me how we get calls from appraisers from another market, who ask for comps. More specifically, they ask for three comps (presumably because thats all that is required on the Fannie Mae forms). Thats the extent of their research. And then, they somehow seem to turn around their assignment in 48 hours. Needless to say, we do not share data with appraisers outside of our market.