Keys Homes
Sunday, March 3, 2013
As the world turns

By REGINA CORCORAN Citizen Columnist

For appraisers, it's spinning so fast they risk flying off. In the last four years, it's likely that residential appraisal reports have changed more than the preceding 15 years.

Consider, for example, the UAD. No, it's not the UTI or the IUD. It's the UAD, the acronym for the Universal Appraisal Dataset.

What was the goal? The plan was to standardize the data in about 100 fields in the residential appraisal report. It seems terms like "good, average, fair and poor" or "superior, equal, inferior" were too difficult to understand.

Fannie Mae and Freddie Mac developed the UAD so that computers could evaluate appraisals. It is very much like a computer programming language.

Here's an example of what you could type for a property with an overall rating of C3 (that means well maintained except for typical wear and tear), a kitchen that was remodeled eight years ago, a bathroom that was updated one to five years ago, and a short comment: 3;k-r-8;b-u-1-5; These rooms are in excellent condition.

Can you imagine the thrill of learning to use this language to complete an appraisal report?

Then there are the interviews. Attending Dragnet's Sgt. Joe Friday's finishing school is a must to accomplish this.

The listing agent and selling agent are as happy as Snoopy with root beer and big band music to co operate.

Efforts to extract data from the listing agents and selling agents on comparable sales one, two and three and current listing one and pending sale one are another matter.

First question: what was the condition of the property? Second question: were there any seller concessions? By the time the appraiser launches the third questions such as "on what date was the contract signed?", he or she may receive curious responses, like "do you really need to know all this?"

Appraisers across the country have some challenges we don't have in the Keys. Not all MLS systems record list price change dates. Not all MLS systems allow appraisers to search how many times a property was listed and for how long simply by inputting the property appraiser's office parcel number.

Some county recording offices don't reveal the sale price of the property.

Of course, all the appraisers in those areas rely heavily on their Ouija boards to verify data.

I think most appraisers would agree that one of the dumbest new requirements for residential appraisal reports is the "Market Conditions Addendum." Fannie Mae designed it and has required it for all reports since April Fool's Day of 2009.

This one attempts statistical analysis of the specific neighborhood in the report. It only works if the neighborhood includes hundreds of homes and if all the sales were through Realtors.

If there were only four sales in the subdivision in the last 12 months, terms like "absorption rate" and "median sale price" are as useful as transporting flies to an elephant barn.

What do you think?

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