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RubberStamp

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Reply with quote  #1 
You know those townhomes that are 99% of the time a PUD but for some reason the one you are appraising is condo ownership?   Anyone feel comfortable comparing it to a non-condo townhome on the condo form or had success doing so?
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Rob

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Reply with quote  #2 
I think we probably have all experienced this. I have used condos for fee simple townhomes and visa versa. I usually will do this if the HOA fees are pretty similar. I don't think the market shows a quantifiable difference, but I could be wrong.
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treskirkland

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Reply with quote  #3 
Quote:
Originally Posted by Rob
I think we probably have all experienced this. I have used condos for fee simple townhomes and visa versa. I usually will do this if the HOA fees are pretty similar. I don't think the market shows a quantifiable difference, but I could be wrong.


I agree, if the HOA fees are similar and the quality is similar I have found there is little if any market difference.  
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RubberStamp

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Reply with quote  #4 
Can anyone then rationalize why a builder would choose condo development under such circumstances?  Just curious.
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Nomad

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Reply with quote  #5 
Yes because a typical consumer probably doesn't know or care of the difference.  They are good substitutes for each other.  As for why, some cities have more favorable density for condo classification.
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Meatloaf

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Reply with quote  #6 
Many agents.... You know the professionals that represent buyers/sellers..... Don't know what a real condo is.

99% of the fee simple town houses in my area are referred to as condos..... Its getting better though... It used to be 100%.

My favorite is when the AMC wants to know your fee schedule and it has a USDA Condo fee on it..... Has there ever been a condo in a USDA approved area?

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dunwoodyappraiser

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Reply with quote  #7 
Many times no one knows if its a condo or fee simple townhouse until the title search is done. It is such a pain to switch it back and forth!
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RubberStamp

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Reply with quote  #8 
Quote:
Originally Posted by dunwoodyappraiser
Many times no one knows if its a condo or fee simple townhouse until the title search is done. It is such a pain to switch it back and forth!


A tell tale is often in the recorded land size.  At least enough to get the questions spinning before you type it up.
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MEP

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Reply with quote  #9 
Read the deed's legal, then read the Security Deed...95% plus will easily solve the issue...Almost, always the condo deed will refer to the condo docs and/or condo floor plan...Town home are usually on a lot, not a unit...the answer is there...the issue for me comes when a TH community is converted to a condo or vice versa. It is much faster than a condition...ops!
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Meatloaf

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Reply with quote  #10 
This is where we as appraisers fugg up.

Truthfully, it is not OUR responsibility to determine this.  It is the client's responsibility to accurately describe the realestate to be appraised.

On the 1004, pretty much 100% of the form above the neighborhood section should be provided by the client.  Anything included here not provided by the client is solely done as a service by the appraiser.  It isn't our job to figure this out, it is our job to ask the client what is to be appraised.  If they fail to accurately describe what they want a value on then how is it out responsibility to try to figure it out.

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Bobby

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Reply with quote  #11 
Ha, you should see the crap storm that occurs when the subdivision has condo in the name and it's not a condo.


Oh and now I get asked to find the PUD Rider.

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BillDing

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Reply with quote  #12 

Quote:
Originally Posted by Meatloaf
Truthfully, it is not OUR responsibility to determine this.  It is the client's responsibility to accurately describe the realestate to be appraised.

On the 1004, pretty much 100% of the form above the neighborhood section should be provided by the client.  Anything included here not provided by the client is solely done as a service by the appraiser.  It isn't our job to figure this out, it is our job to ask the client what is to be appraised.  If they fail to accurately describe what they want a value on then how is it out responsibility to try to figure it out.

 

I guess that's fine if you're not an appraiser and don't have to adhere to USPAP.  But the Scope of Work Rule says otherwise.  WE develop the SOW, not the client.

sow1.JPG  sow2.JPG And then Standards 1
standards.JPG 
it is up to the appraiser to make sure their report is without error of omission or commission and that the results are not misleading.



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Meatloaf

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Reply with quote  #13 
Dude... SOW and subject identification are not the same thing.

The client is responsible for identifying the subject.  If the client is relying on you to tell them whether it is a condo or a PUD then they are missing one key point of your job.  Your job is to value what they ask you to value.  Your job is not to guess at what they want you to value.

The client needs to provide you with a legal description.  The fact that they rely on us to figure it out is just more evidence of some of us being b!tches.

The client gets title work done.... Why do they refuse to give that to you up front?  They get a flood cert done.... Why do they refuse to give that to you?  They know whether it is a PUD and whether there are any HOA dues.... Why do they wait until after you submit the report to tell you that you are wrong????  They know who the current owner of record is.... Why do they ask you to determine the current owner of record?  They know the APN, the RE Taxes, whether there are any special assessments..... Why do they refuse to give you this information????

Because they want you to make a mistake.  A mistake in any of these "factual" areas can lead to a won lawsuit whereas disputing a value can be extremely difficult.  They want you to make these mistakes so they can get you when they need to.  Same thing with the original comp photos.  Its nothing more than a way to PROVE an appraisal WRONG without actually having to weight the merits of the appraiser's judgement.  Its kinda like when they pressure you into saying you used paired sales analysis to support your adjustments, or regression or ANYTHING.  They know you didn't and its real easy for them to point to your lie about paired sales when they need your balls on a platter.

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BillDing

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Reply with quote  #14 
While I don't disagree that the appraiser is set-up as a fall guy...FNMA has numerous double edge swords.  However, USPAP is clear that identification is the responsibility of the appraiser.  The appraiser must identify the subject, including the physical, economical, legal attributes...and to do it without error.  The lender may have that info, but I wouldn't rely on it.  You know how many times I have received a "correction" notice because of title work differing from my report?  And of course, it ends up that the title work was wrong and I stood my ground having them change the title work.  You take their info and it's wrong, it's not their problem, it's your problem for the error on YOUR report.
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Meatloaf

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Reply with quote  #15 
So.... You are supposed to identify the subject????? How?

If the client says to appraise 1245 jackoff street and you go to 1245 jackoff street and look at the house how do you do your appraisal report?  How many acres is it on?  Where do you get your legal? How do you know you are right?  Does 1245 Jackoff st have 7 various parcels connected to it and a floating dock across town?  Was there a conversion to CONDO last week that you cannot and will not be able to find in public records????  How do you look at riders when there may or may not be a security deed?  Maybe 1245 Jackoff street is the OLD address and the new address is 1345 jackoff st.

Without the client identifying the subject, you are guessing.  We guess all the time.... Most of the time its easy to figure out what they want but at the end of the day, it is the client's responsibility to describe the real estate that is to be the subject of the valuation assignment.  Sure, you must IDENTIFY the subject in your REPORT but you can only identify what the client has requested to be valued.

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BillDing

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Reply with quote  #16 
That's your job to figure out.  If you can't, then you contact the client and explain any problem you're running into.  That also is a USPAP requirement.  There's always burger flipping jobs available if you can't cut the mustard.
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Meatloaf

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Reply with quote  #17 
Quote:
Originally Posted by BillDing
That's your job to figure out.  If you can't, then you contact the client and explain any problem you're running into.  That also is a USPAP requirement.  There's always burger flipping jobs available if you can't cut the mustard.


This is the reason appraisers get no respect.  BillDing thinks its his job to read the client's mind to determine what the client want's valued.

No Bill, it is the client's job to provide us with an accurate description of the subject among other things.  Without an accurate identification of the subject BY THE CLIENT how the hell are we supposed to know what they want a value on?

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BillDing

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Reply with quote  #18 
What are you talking about??? They order an appraisal of the property located as 123 abc st n in alphabet town for a sale or refi, etc. on a 1004. That's what they want a value on. Now it's our job to gather, verify and analyze all the attributes of that property on the report.  We may come back to them and say, sorry, this is a condo and needs to be on a 1073 form, etc  That's how we earn our respect...what kind of respect would one have if you had to give them all the answers to the problem?
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Meatloaf

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Reply with quote  #19 
123 ABC st could be a house and a half acre lot, or it could be a house and the surrounding 100 acres.  Or 123 ABC street could be a vacant site where they meant to say "LOT 123" ABC st or maybe 123 ABC st is a house on a half ac lot that they are wanting appraised as part of a multi-parcel package of other homes on ABC st.  Or maybe 123 ABC st is on 50 acres and they just want the value on the house and 5 ac.

Sure, you may be safe to ASSUME that they want what is depicted on the tax card (that they didn't provide) but that is YOUR assumption and not THEIR direction.

This happens all the time in rural areas or in non-conforming subdivisions.  I would suggest you start getting a legal description from your client.  I have had 3 instances this year where the client orders an appraisal based on the address on the contract.  You look at the legal description on the contract and the address does not match the legal.  Had I not gotten the legal description FROM THE CLIENT, the appraisal would have been on the WRONG property.  This can happen easily in a new subdivision.

If you simply use the address the client gives you without the CLIENT!!!! providing you a specific description of the subject then you are making an ASSUMPTION about the subject that you should be disclosing.  Sure, you may guess it right 99% of the time, but you are still guessing 100% of the time.

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BillDing

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Reply with quote  #20 
When those situations come up where it is not clear, you are required to contact the client and make sure you're doing the correct property and it is for the correct intended use and on a form that is needed for that use.  Often the client doesn't know what form it should be on.  They want condos on a 1004, and fnma allows it for town home style condos, but I still won't do it on a 1004...(goes to that "appraiser's balls on a platter" scenario)
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Meatloaf

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Reply with quote  #21 
Quote:
Originally Posted by BillDing
When those situations come up where it is not clear, you are required to contact the client and make sure you're doing the correct property and it is for the correct intended use and on a form that is needed for that use.  Often the client doesn't know what form it should be on.  They want condos on a 1004, and fnma allows it for town home style condos, but I still won't do it on a 1004...(goes to that "appraiser's balls on a platter" scenario)




The description of the subject is NEVER clear without a legal description and plat.  You may think its clear, but without this it is always an assumption.

Suppose I go to refinance my house.  I live on a half acre lot.  I just sold a 12 foot section to my neighbor yesterday because I had an encroachment issue.  

Guess what.... You are fixin to appraise the wrong property because you pulled an address and a tax card and made an ASSUMPTION that you failed to disclose.

Don't worry, the client will make YOU correct YOUR error when it hits underwriting.  The client knew about the sell-off all along because it was the purpose of the re-finance.  Had you taken the time to demand a plat and a legal description then it would be at least the CLIENT's error that YOU could CHARGE EXTRA to correct.

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BillDing

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Reply with quote  #22 
BTW, don't get me wrong.  I was speaking from USPAP's position...it's up to us.  But you are correct in that the lender is required by FNMA to give us any and all information about the subject property and you often need to remind them....that means everything, including the legal, zoning, safety issues, as well as all financial terms they have if it's a sale. 

However, all that information needs to be verified and never assumed to be correct.

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