When in Doubt, Give the Homeowner a Shout
Back in October of 2020, I headed out from my office to do an exterior inspection for an
appraisal in Mauldin, SC. COVID-19 Exterior Assignments and COVID-19 Desktop Assignments were now the norm. The house looked like a normal ranch house and had no sign of updates that I could tell from the exterior. I had a prior sale from six months ago in MLS and showed an interior with no updates as well. I deem this secondary information (along with all tax records and CRS data) to be valid and determined that I had enough information to form a credible result for my reconciled value. A day after the submission, I get a phone call from an irate homeowner. Due to what a U.S. Marine would consider,
non-professional language and the fact that the volume of his voice could rival a Boeing 747 taking off from the tarmac, I gathered he was a little perturbed. Turns out the house’s interior had been completely remodeled in the six months after the sale which increased my reconciled value dramatically.
Unfortunately, I experienced a few situations like this:
A luxury barndominium that looked like a storage building from the outside
A converted 2 car garage into a media room increasing the GLA of the subject
A historical burial site in the woods behind the improvements (This one didn’t add value…I’ve seen Poltergeist…)
We have all heard the news. Last year FHFA made an announcement that desktop appraisals are here to stay. With more and more access to relevant data, it is becoming a realization that desktop appraisals and exterior appraisals can now be weighted more than they were in the past. COVID-19 provided the appraisal industry a mandatory test market for these assignments, and it seems that GSE’s and lenders are considering these report types credible. However, desktops and exteriors are only as accurate as the data that is collected and analyzed. While secondary data (MLS Listings, Tax Records, CRS Records, etc.) that can be months or even years old as of the effective date of your appraisal can all be compiled to form an accurate portrayal of the quality and condition of what is contained within four walls, it is no match for primary data (current photos, interviews with homeowners, interviews with real estate agents, etc.) that is minutes old to form an accurate opinion of quality and condition of your subject. So when gathering up your data to form your opinion of quality
and condition of a subject property, remember this rule:
“When In Doubt, Give the Homeowner a Shout.” (That’s not really a rule, I completely made that up, but it rhymed).
My biggest mistake in the case of the foul-mouthed, bull horn was that I never contacted the lender to gain permission to contact the homeowner to ask about improvements relative to my secondary data (I was requested not to contact the homeowner by the lender at the time of the assignment). If I had contacted him, I would have realized that my data was misleading, and I would need to perform a full inspection and complete a full 1004. This would have saved time, money, and the two Advil I had to take after my slightly unpleasant conversation with Gilbert Gottfried.
-Paul Ryll
