Posts Tagged ‘checks property’

Appraisal comp checks are limited

Recently, I had one of our clients request a “ max value comps check ” to help him determine  if he had a deal .  I understand that the loan agent cannot make the loan if there is not enough equity in the house , so both the agent and the borrower want “ maximum value possible ”.  This is a very common request from loan agents and we always provide comparable sales information, but they aren’t always what the agent thought he was going to get . 

Regarding “comp checks”, USPAP and logic set boundaries that the professional appraiser must stay within.  My greatest hope is that understanding these boundaries will help mortgage professionals better work with their appraiser. 

• The appraiser cannot make a value judgment without going through the appraisal process.

• USPAP prohibits the appraiser from making a value judgment before completing the appraisal process.  Appraisers who tell you if your estimated value will “work or not” are unethical and are at risk of losing their license. 

• Logic prohibits anyone from making an accurate value judgment before obtaining all the facts. I.E. market conditions, location, condition, size, detriments, and the list goes on and on.  How would you feel about your doctor if he told you, you needed an operation based on a phone conversation?  Looking at a list of comparable sales and stating a value estimate sets the appraiser and the lender up for problems.  Read more…