RES 450 Week 2 Journal

I have worked in home lending for many years, and I know how critical the appraisal is in every deal. I have had deals fall through because of appraisals. Every lender I worked for had an appraisal review department. In that department, the appraisal would be put into a software that would quickly asses if the appraisal was considered reasonable. If it were not, it would be given to a senior appraiser, and they would physically go through the appraisal and see if they would come to the same determinations as to the submitting appraiser. If not the appraised value would be rejected and the lender approved amount would be submitted. At that point, the broker, buyer, or seller had the following options. 1. accept the new value as provided by the lender, and continue with the deal based on that. 2. Request another appraisal by someone more senior than the original appraiser, often in the same appraisal firm. 3. Cancel the deal or 4. find a different lender.

What is your opinion of the factors of value this appraiser discussed?

The standard factors in an appraisal are location, age, design, structure, curb appeal, bed and bath count, square footage, heating and cooling, storage or garage space, recent renovations, and current market. As Paul hit on a few key points, he did not go into detail. However, pride in ownership goes a long way.

Do you feel that more important factors of value were left out?

Yes. Paul discussed primarily the subject property without really going into detail about the area, curb appeal, or even the basics of sqft and bed and bath counts. This video was more of a gloss over then educational.

What percentage of the value assessment do you feel a kitchen or bathroom condition should contribute towards the final value estimate?

Kitchen, bed, and bath are typically the critical points for me to even go and view home. I first search that the bed and bath count is right before I even look at the property. Then my next question is the kitchen, and if there are new windows and if there is backyard or patio area large enough to entertain. So I would say the kitchen and bath would be about 50% of the deciding factor for me.

What other ways would you approach the appraisal of a home?

I think the approach that Paul took was fine I just think the video should have gone into more detail. I would have also like to know more about the adjustments that are common as well as choosing the comps for that property.