Tabloid Appraisal Questions & Answers

One Size Don't Fit All !!!

Cast: Clint Long, Appraiser

Loan Officer: from outside of Tennessee

AVM: An Automated Valuation Model (opinion of value). Computer generated opinion of values used by lenders for homes that are usually newer, similar in age, style, etc. No inspection by appraiser.

Driveby Appraisal: Accepted by some lenders and based on the buyer having a strong credit rating and placing less emphasis on the value and true condtion of the house. Adjustments are made on comps assuming a certain level of conditon. Information taken from public records with no interior inspection.

MLS: The local multiple listing sytem where realtors list property for sale.

DO YOU PRE-COMP; Asks the loan officer (unfamiliar with Middle Tennessee housing) from California, New York, etc.  Sure I say, the house that you're asking about is only 60 miles from our office, we do work that territory, and my "Crystal Ball" says that it has to be worth what you need.

On the serious side, I can tell you what the tax record is on the property and we can see if it has been listed on MLS recently or in the past, back to the fourth quarter of 1996. This may tell us what style house it is, whether the listing agent had any comments, etc.  This information may help your client communication.

Loan Officer:  We had an AVM on the property, and we just need a driveby appraisal to support the value from the AVM.  Appraiser: Thats odd, why do you need that?  Loan Officer: The peoples insurance company said that they need a regular appraisal or the borrower needs to find another insurance company. So we just need a driveby appraisal where they can get homeowner's insurance.

Appraiser?: Is this a house and lot.  Loan Officer: No it has 15 acres. Appraiser: The older the house is, condition becomes a bigger factor in what the house would be worth and this could be beyond the scope of a driveby appraisal.  About how old is the house?  Loan Officer: It was built around 1900.

Appraiser: My price will be ____, which is higher than normal and we need to be paid on the front end.  Loan Officer: That's outrageous, all other appraisals don't cost that much. Why would you charge that much?

Appraiser: The value of land depends on road frontage, boundary shape, topograhy, soil and rock, whether it is in a "flood plain", whether an extra lot can be split from the subject property, etc.  Land is often sold outside of the MLS system and a trip to the Tax Assessor may be required.  A driveby on a 100+ year old house doesn't reveal whether the owner has spent $10,000, $60,000, or made no renovation at all.  Also, once I look in the crawl space, the fundation may look solid or it may need an inspection by a structural engineer.

Loan Officer: But I still don't see why you can't tell me what it's worth before I order an appraisal?