1004D
245) Updated Value Opinion
02/18/08
Dear H2,
I did an appraisal about 3 months ago, and now the cleint is asking for a recertification of value (on form 1004d). It appears that the value has gone down.
My question is when i do the 1004D, do i just let them know the value has gone down? Or do i need to provide new comps?
anthony gonzalez anthony10998@sbcglobal.net
Dear Anthony,
Whenever you are asked for a new value opinion, the USPAP requires that you make a new appraisal. However, you can incorporate any parts of your old appraisal you wish, including the comps, as long as you believe they are the best comps available as of the date of your new appraisal.
H2
I did an appraisal about 3 months ago, and now the cleint is asking for a recertification of value (on form 1004d). It appears that the value has gone down.
My question is when i do the 1004D, do i just let them know the value has gone down? Or do i need to provide new comps?
anthony gonzalez anthony10998@sbcglobal.net
Dear Anthony,
Whenever you are asked for a new value opinion, the USPAP requires that you make a new appraisal. However, you can incorporate any parts of your old appraisal you wish, including the comps, as long as you believe they are the best comps available as of the date of your new appraisal.
H2
206) Using the URAR
01/10/08
Dear Henry,
What significant changes must be made to the Fannie Mae Form 1004 if it is not being used for a Fannie mae transaction?
Name Withheld by Request
Dear Friend,
You have to very carefully read through the URAR form and make sure that everything -- including the certification -- applies to the appraisal you are doing.
This is very tricky and it is why most appraisers do not use the 2005 URAR for non-Fannie Mae mortgage appraisals. They usually use the Classic 9/93 URAR or the Appraisal Institute's Summary Appraisal form.
H2
What significant changes must be made to the Fannie Mae Form 1004 if it is not being used for a Fannie mae transaction?
Name Withheld by Request
Dear Friend,
You have to very carefully read through the URAR form and make sure that everything -- including the certification -- applies to the appraisal you are doing.
This is very tricky and it is why most appraisers do not use the 2005 URAR for non-Fannie Mae mortgage appraisals. They usually use the Classic 9/93 URAR or the Appraisal Institute's Summary Appraisal form.
H2
35) New Construction Issues
01/08/07
Dear Henry-
What is the proper way to handle an increased sales price on new construction assignments? When we appraise a home from plans and specs, the sales price is $300,000. When asked to do the final inspection on the 1004D form, we are sent a list of "extras" and the new sales price is $309,457.
To my reading, the 1004D update section only allows for a decrease in value; the 1004D completion only allows for a yes or no if the improvements are complete. Please help.
Michael Ferguson asap@rochester.rr.com
Dear Michael,
You need to read the 2008 USPAP Advisory Opinion A0-3 on page 119.
It makes it very clear that in spite of what it is called or what form you use, when you are asked to make an updated value opinion (up, down or unchanged), you are making a new appraisal.
You have two choices here: You could go back and redo your original appraisal to include an assumption that the additional work would be done and base your value on that assumption. However, you cannot change the date of the appraisal. If you do, you are making a new appraisal.
The other choice is to make a new appraisal. Frankly, I don't see how you can complete the top section of the Fannie Mae 1004D and still comply with the 2008 USPAP.
The "Certification of Completion" section can be completed as requested, as long as you do not render an opinion of value, which is not going to make your client happy.
Maybe some of our other readers will help us out.
H2
What is the proper way to handle an increased sales price on new construction assignments? When we appraise a home from plans and specs, the sales price is $300,000. When asked to do the final inspection on the 1004D form, we are sent a list of "extras" and the new sales price is $309,457.
To my reading, the 1004D update section only allows for a decrease in value; the 1004D completion only allows for a yes or no if the improvements are complete. Please help.
Michael Ferguson asap@rochester.rr.com
Dear Michael,
You need to read the 2008 USPAP Advisory Opinion A0-3 on page 119.
It makes it very clear that in spite of what it is called or what form you use, when you are asked to make an updated value opinion (up, down or unchanged), you are making a new appraisal.
You have two choices here: You could go back and redo your original appraisal to include an assumption that the additional work would be done and base your value on that assumption. However, you cannot change the date of the appraisal. If you do, you are making a new appraisal.
The other choice is to make a new appraisal. Frankly, I don't see how you can complete the top section of the Fannie Mae 1004D and still comply with the 2008 USPAP.
The "Certification of Completion" section can be completed as requested, as long as you do not render an opinion of value, which is not going to make your client happy.
Maybe some of our other readers will help us out.
H2
16) Roof Inspection and the 1004D Form
12/09/06
Dear Henry,
I recently completed an appraisal subject to a roof inspection due to obvious water stains. Wood damage was also noted in the home inspection report that was given to me prior to my appraisal; I was not able to locate the damage spot, however, and noted so in the report.
The underwriter is now requesting that I complete a 1004D Form for both the roof and the repaired wood. Is this the right thing to do?
Thanks -- and love the new format!
Nanette nanette_j@hotmail.com
Dear Nanette,
Glad to hear that you like ASK HENRY HARRISON.com We have had a lot of requests to do something like this.
As for the 1004D form, the Appraisal Update and Completion Report Form (Fannie Mae 1004D), it is a multi-purpose form. I assume that you are being asked to do only the "Certification of Completion" and not for the Summary Appraisal Update Report."
Nothing requires you to do this work except your desire to retain the goodwill of your client. Keep in mind that Fannie/Freddie require that you have the necessary skills to do the work without help. (This is not a USPAP requirement, by the way.) From the tone of your question, I suspect that you may feel unqualified to make the needed determinations. In that case, I think you should refuse this additional work.
H2
I recently completed an appraisal subject to a roof inspection due to obvious water stains. Wood damage was also noted in the home inspection report that was given to me prior to my appraisal; I was not able to locate the damage spot, however, and noted so in the report.
The underwriter is now requesting that I complete a 1004D Form for both the roof and the repaired wood. Is this the right thing to do?
Thanks -- and love the new format!
Nanette nanette_j@hotmail.com
Dear Nanette,
Glad to hear that you like ASK HENRY HARRISON.com We have had a lot of requests to do something like this.
As for the 1004D form, the Appraisal Update and Completion Report Form (Fannie Mae 1004D), it is a multi-purpose form. I assume that you are being asked to do only the "Certification of Completion" and not for the Summary Appraisal Update Report."
Nothing requires you to do this work except your desire to retain the goodwill of your client. Keep in mind that Fannie/Freddie require that you have the necessary skills to do the work without help. (This is not a USPAP requirement, by the way.) From the tone of your question, I suspect that you may feel unqualified to make the needed determinations. In that case, I think you should refuse this additional work.
H2