Q1. Are my basement rooms displayed in the appraisal report?
Yes. All improvement amenities are displayed in the report. Basement rooms/finish is not, however, considered ‘above grade’ and cannot be included in Gross Living Area. Below grade rooms are accounted for separately in the % finish of the basement and adjustment for such can be ascertained on the grid section of the URAR (P2).
Q2. Can the measurement of my house be different from the county records on the appraisal report?
Yes, the appraiser's onsite measurements can, and most likely will be, somewhat different than county records. The appraiser’s actual measurements are considered to be more accurate than county records as county records are often reflective of outdated and/or inaccurate builder plans. Measurements can also slightly vary from appraiser to appraiser. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size and, should the client or borrower have concerns regarding the GLA estimate, they are encouraged to review the appraiser’s measurements to ensure accuracy.
Q3.Can the appraiser use a comparable sale that is older than 90 days?
Yes. Lender requirements demand at least two sales with settlement dates < 90 days, but additional sales may be outside that criteria. Generally, investors and underwriters will place stronger consideration on the more recent sales, ceteris paribus.
Q4.Can an appraiser appraise a house that is located in a county they do not live in?
Yes, appraisers are certified or licensed statewide and can legally appraise properties within their respective state and within their certification or licensed abilities. The Uniform Standards of Professional Appraisal Practice (USPAP) competency rule does, however, require ‘geographic competency’, and appraisers are required to adhere to that rule.
Q5.If an appraiser is not competent in a certain area/county can they still take the assignment?
Yes, but they must: (1) disclose to their client their lack of competency, and (2) team with an appraiser who is competent to complete the assignment.
Q6. Can the appraiser communicate with the borrower about the appraisal report?
Yes. HVCC does not preclude communication between the appraiser and any party. Communication with parties associated with 'closing' the loan, however, (e.g. Realtor, borrower, etc.) must be restricted to those topics not related to value-related conversations.
Q7. Can the loan officer communicate with the appraiser?
Yes. See Q6 answer.
Q8. Who is the appraiser’s "client"?
The appraiser’s client is A-1 Closing Services, Ltd. As A-1 engages the appraiser and is responsible for payment to the appraiser.
Q9. What is USPAP?
Uniform Standards of Appraisal Practice can be thought of as "the appraiser's bible" and contains the rules and guidelines that appraisers are legally and ethically bound to adhere to. See 'USPAP' tab for detailed information.
Q10. Can a room without a closet be designated as a bedroom?
No. Due to the functional issues, it is normally classified as a den or an office.
Q11. Is it in the appraiser's best interest to be conservative?
No. 'Undervalued' appraisals are philosophically as aggregious as 'overvalued' appraisals and constitute USPAP violation.
Q12. Are Appraiser USPAP violations referred to their state's licensing board?
Yes. Anyone can submit a suspected violation to the appraiser’s respective state licensing board. At that time, the claims are investigated by the board.
Q13. Can an appraiser use comparable sales outside of my neighborhood/market area?
Yes. Sales and listing data from within a defined neighborhood are always considered the most reflective of the subject market, but data from outside the immediate neighborhood may be used in situations where there is limited data within the neighborhood and/or a lack of recent data.
Q14. Are appliances considered in the appraiser's final estimate/opinion of value?
Yes, but only if the appliance is permanently affixed to the home. Any component that is 'permanently attached' to the home should be afforded value in the appraiser's final value conclusion.
Q15. Are my upgrades considered in the appraiser's final estimate/opinion of value?
Yes. Appraisers consider upgrades in the final opinion of value. The adjustment for such, however, is often made indirectly through comparison with similar properties, as opposed to a direct 'line item' adjustment for upgrades.
Q16. Are listings given the same consideration as the comparable sales?
No. The appraiser has based his or her opinion of value on the "sales comparison approach". The listings have been provided as requested by the investor. Closed sales are given primary consideration in the final value estimate.
Q17. Why is there an adjustment for concessions?
Concessions affect the net sales price and must be afforded consideration (i.e. adjusted for) by the appraiser.
Q18. Does the appraiser average the adjusted sales prices of the comparables to arrive at a final value estimate?
No. The appraiser can use a weighted average but is directed by Fannie Mae guidelines to no 'average' the adjusted values of the comparables in arriving at their final opinion of market value. The appraiser analyzes all of the comparable sales and weights the various sales/listings based on their compatibility with the subject.
Q19. Can the owner of public record show differently than the current actual owner?
Yes. If a home was recently purchased it sometimes takes the County Recorder's office some time to reflect the change of ownership.
Q20. Can the cost approach method be given more weight than the sales comparison approach?
The cost approach is, by nature, an estimate of how much it would cost to ‘replace’ the property and is often a different value estimate than that indicated on the 'sales comparison approach'. The sales comparison approach is generally considered the most reliable estimate of 'market value', which is the type of value required by most lenders for residential appraisal assignments.
Q21. I can fit 4 cars in my garage and the appraiser has called it a 3 car garage. Why was it not accounted for as a 4 car garage?
Garage stall count is typically considered that number of spaces in which vehicles can fit side by side. For this reason, 'garage count' may be less than the actual number of cars which can be 'fit' into a garage.
Q22. I plan on finishing my basement in the near future and told that to the appraiser. Why wasn't that taken into consideration in the appraisal?
Most appraisals are performed "AS IS." In an "as-is" appraisal the appraiser can only appraise the current improvements. If the appraiser is performing the appraisal "Subject to completion" of proposed improvements, the proposed items would be considered in the final value estimate. Such appraisals often require a final inspection when the improvements are complete.
Q23. My appraisal came back lower than expected. Can I reorder a new appraisal in the hope to get a higher value?
No. That would be considered "Value Shopping", which is a direct violation of HVCC. Please refer to Fannie Mae FNMA FAQ's Q-9
Q24. My friend is an appraiser. Why can't they appraise my home?
HVCC prohibits anyone who would benefit from ‘closure’ of the loan (e.g. borrower, loan officer, etc.) from having any influence on the selection, retention and compensation of the appraiser.