Over the years, as the Chief Appraiser for a national Appraisal Management Company (AMC), my team has seen many unique appraisal assignments and experienced many interesting requests for revisions. Of course, we’ve seen our fair share of requests to provide an additional supporting comp or two, or to address how the subject’s opinion of value that is over/under the indicated Predominant Value of the Neighborhood impacts value, too. While we see those common requests for revision regularly, the most common requests for revision, are of the much simpler or generic variety. Additionally, those requests seem to be easily avoidable with just a little more patience by the client in the ordering process and from the Appraiser in their own report production and QC processes. Here is a list of our “Top 5” revision request items that we see on a regular basis:
- Correct the spelling of the borrower and/or seller’s name.
Note: This error revision runs at a 50:50 pace. Half the time the error was initiated on the customer’s part when they placed the order while the other half is an Appraiser input error.
- Add or delete a specific borrower to the appraisal.
Note: This revision request is primarily due to the customer needing to add or remove a co-borrower to/from the transaction.
- Correct the Assessor’s Parcel Number (APN).
Note: Lenders require the APN entered on the appraisal to match exactly what the local Assessor indicates. We see many requests to have the Appraiser add -000 to the APN demonstrated in their report.
- Correct the purchase price and/or reported seller’s concessions.
Note: This is also a 50:50 revision request. Customers often request this revision after the appraisal did not support the agreed upon purchase price and the Lender requires the new purchase price and concessions indicated in the report. We also see this one due to Appraisers missing an addendum to the Purchase Agreement or Counter Offer reflecting a different sales price or concession amount.
- Include a copy of the Appraiser’s current license and/or E&O.
Note: This revision request is 100% on us Appraisers.
While the above “Top 5” are the most common revision requests that we see, there are many others that we see regularly. Some of those are:
a) “Include two pending sale/active listing comps for FHA reports.”
Remember, those two extra comps are required. See the HUD Handbook 4000.1, page 524.
b) “Include original comp photos, not MLS photos, for FHA reports.”
Remember, while it is acceptable to provide MLS photos to demonstrate the condition of the comp at the time of its sale, FHA does require original photos of the comp to be included in the report as well. See the HUD Handbook 4000.1, page 513.
c) Have Appraiser comment on the Subject and Comps UAD ratings for Quality of Construction and Condition as they differ greatly from what other Appraisers have previously indicated.
If you’ve created a report template with those fields pre-populated, don’t forget to edit those sections for each report. Please understand that every house is not of “Q3” Quality or in “Q3” condition. If your peers recognized that and you forgot to properly edit your pre-populated fields, you’ll be responsible for explaining your error to the AMC, customer, and possibly the Agency Investor.
Finally, whether you’re a Lender processing an appraisal order with an AMC, or an Appraiser getting ready to push “send” on a freshly minted report, it is highly recommended that you take a few extra seconds to double check your data and correct any pesky errors you find. Taking that extra time to verify and correct the data can significantly prevent revision requests. It may be cliché, but in the fee appraisal and mortgage worlds, time is money. If you’re moving too fast and don’t check your data for errors, it’s a given that you’re creating unnecessary revision requests that are creating additional frustration, and wasting time and money for all the other interested parties to the transaction.