APPRAISING IN TODAY’S MARKET

General
- Who is reading the appraisal today (buyers, sellers, selling agent, listing
agent, brokers, attorneys, loan officers, underwriters, field reviewers,
review appraisers).
- HVCC (Home Valuation Code of Conduct)
- Adopted by Fannie Mae/Freddie Mac
- AMC’s (Appraisal Management Company)
- Appraisal Coordinator
- NAR is looking to modify or “sunset” this code
- Consider the appraisal inspection the most important showing
- Explain to sellers what to expect, and how important the appraisal is
- FHA Appraisal
- Appraisal tied to property for 6 months
- Utilities must be active
- Concerned the 3S’s (Safety, Security, Soundness)
- Gross living area versus square footage (Fannie Mae, Freddie Mac
guidelines)
- Single family home versus condominium
- Basement
- Bedroom/bathroom count (above grade, versus below grade)
- Contracts & Concessions (closing costs, limit 3%, furniture, repair credit)

Comparables
- Arm’s Length Transaction
- Old requirements- 3 closed comps w/in 12 months
- Typical new requirements
- 1-2 closed w/in 90 days
- 1-2 closed within 6 months
- 1-2 pending
- 1-2 active
- Justification for dated comparables,
- same building
- identical model
- lack of similar properties
- similar external obsolescence
- External obsolescence (train, highway, airport noise, etc.)
- REO’s, & Short-sales (when are they considered a comp?)
- Typically require a condition adjustment
- May be utilized to meet lender requirements
Single family homes
- Survey (lot lines, easements, encroachments, legal description)
- Standard adjustments:
- Date of sale
- LOCATION
- Site size
- View
- Design
- Quality of construction
- Age,
- Overall condition
- Bedroom/bathroom count
- Gross living area
- Basement
- Basement finishing,
- Functional utility
- Heating/cooling
- Parking
- Outdoor space
- energy efficiency (green homes, zoned heating/cooling)
- Discretionary adjustments:
-Kitchen/bathroom quality/modernization
- Fireplaces
- Professional landscaping
- Amenities (smart-home, wine cellar, home-theater room, coach
house, pool)

PUD’s (Planned Unit Developments)

- Typically townhouses or suburban homes
- Governed by CCR’s
- Still an association
- Minimal dues
- No common insurance
- Same form as single family residence
- Similar adjustments as single family residence
- Condominium townhouse versus PUD townhouse

Condominiums
- Standard Adjustments
- Date of sale
- LOCATION
- Recreation facilities
- Floor location
- View
 - Design
- Quality of construction
- Age
- Overall condition
- Bedroom/bathroom count
- Gross living area
- Functional utility
- Heating/cooling
- Energy efficient items
- Parking
- Outdoor space
- Discretionary adjustments:
- Kitchen/bathroom modernization/quality
- In-unit laundry
- Fireplaces
- Amenities (audio/visual wiring, roof-rights)
- Project Information:
- # of stories
- # of elevators
- Year built
- Construction
- Roof material
- Total # of parking
- Type of parking
- # of units
- # of units completed
- # of units for sale
- # of units sold
- # of units rented (MI limit of 66%)
- # of units owner occupied (second homes included)
- # of phases
- Developer in control of the HOA
- Management company and contact
- Any entity own more than 10% of the project
- Date of conversion
- Status of completion of common areas
- Commercial space in the project (20-25% limit)
- Special assessment (how much and for what)
- Ground rent
- Current assessments
- Assessments include what

Appraiser packet-what should you provide to the appraiser?

- Executed contract
- RELEVANT comparables
- Project information (condominiums)
 - Floor plans
- List of upgrades/improvements
- Zoning certificate (multi-unit buildings)
- Survey of plat (single family homes)
- Agent Metrics
- Sales-to-list price ratio
- Demonstrate the rate the rate of appreciation/depreciation

Omitted: 2-4 unit properties, vacant land, co-ops

Questions??????