Appraisal Process

Appraisal Process

Visionet is a business partner that provides high-value of services in Mortgage domain. Our trained reviewers (more than 7 years of expertise) has the skill set to review all residential reports and deliver it to the lender or resend it to the appraisers for corrections(if not compliant with the client requirements). Besides being UAD compliant in reviewing the appraisal reports, the team is also trained on UCDP(Uniform Collateral Data Portal).

We have executed for TOP Appraisal and BPO companies, the reviewing process and facilitated increases in profit margins while reducing Turn Around Time. TAT for reviewing appraisals is 4-6 hours (we are flexible as per client’s requirement) and BPO is 2 hours & quality at 98% accuracy.

Our commitment to compliance, statutory regulations, and periodic review of policies to help ensure conformance with the applicable law including USPAP (Uniform Standards of Professional Appraisal Practice) has driven success in the Appraisal Process.

We are also a technology provider for Appraisal and BPO domain. We have a process that allows us to do granular quality control on your appraisal reports irrespective of any forms (exterior or interior).

Our reviewer also communicates with the appraisers/brokers for any corrections that are required on the reports. We also follow up for reports, coordinate appointments with the borrowers, seek clarification from the client for the appraisers/brokers.

We help ensure accurate, error free appraisal/BPO reports are delivered to the Lenders with bare minimum client returns.

Appraisals

Real estate appraisal, property valuation or land valuation is the process of evaluation of Real property value. The value usually sought is the property’s Market Value. Appraisals are needed because compared to, say, corporate stock, real estate trades vary infrequently. Not only that, but every property is different from the next, a factor that doesn’t affect assets like corporate stock. Furthermore, all properties differ from each other in their location – which is an important factor in their value. The lack of frequent trading, unlike stocks, means that sometimes appraisers are needed to figure out a property’s value. The appraiser usually provides a written report on this value to his or her client. These reports are used as the basis for mortgage loans, for settling estates and divorces, for tax matters, and so on. Sometimes the appraisal report is used by both parties to set the sale price of the property appraised.

Market value definitions in the US

In the US, appraisals are for a certain type of value (e.g., foreclosure value, fair market value, distressed sale value, investment value). While Uniform Standards of Professional Appraisal Practice (USPAP) does not define Market Value, it provides general guidance for how Market Value should be defined: a type of value, stated as an opinion, that presumes the transfer or sale of a property as of a certain date, under specific conditions set forth in the definition of the term identified by a certified appraiser as applicable in an appraisal. Thus, the definition of value used in an appraisal or CMA (Current Market Analysis) analysis and report is a set of assumptions about the market in which the subject property may transact. It affects the choice of comparable data for use in the analysis. It can also affect the method used to value the property.

Purpose of an appraisal

Real property is used as collateral for a mortgage loan. If a borrower defaults on the mortgage payments, the lender will take ownership of the property. This seizure of the property by the lender is referred to as foreclosure. Foreclosed properties will be sold by the lender as soon as possible to recover the outstanding loan balance. If the proceeds of the property sale are less than the remaining loan balance and accumulated foreclosure costs, the lender will suffer a monetary loss. The borrower will also suffer, as a result of the foreclosure. Many lenders will hold the borrower legally obligated for any deficiency balance (loss) that occurred. For this reason, proper evaluation of the property’s value and its marketability is essential. The most important tool in evaluation of the collateral is the appraisal. The appraisal is a written summation of a property’s condition, marketability and value. The appraisal is completed by a licensed property appraiser.

Three approaches to value

There are three general groups of methodologies for determining value. These are usually referred to as the “three approaches to value” which are generally independent of each other:

  1. The cost approach – used when properties are new or newly renovated
  2. The sales comparison approach – most common method used to establish value of a resale, existing property or refinance
  3. The income approach- used when the property’s principal value is dependent on its ability to provide current market rents. The appraiser must decide which of these values provides the most accurate representation of value for the subject property. The estimated market value should never be an average of the three approaches. Each is a unique representation of value based on a specific use or circumstance. The appraiser must select one or more of the value approaches and base the market value on that figure. Justification for the method selected should be explained by the appraiser in the comments section. In this section, the appraiser also notes whether he/she is basing the appraisal on the property “As is” or “Subject-To”…repairs, completion, inspections”.

The appraiser can generally choose from three approaches to determine value. One or two of these approaches will usually be most applicable, with the other approach or approaches usually being less useful. The appraiser has to think about the “scope of work”, the type of value, the property itself, and the quality and quantity of data available for each approach. No overarching statement can be made that one approach or another is always better than one of the other approaches.

Our Services

Different types of appraisal report forms are used to evaluate the various kinds of properties that exist in the United States. An appraisal must be completed on the most current version of the appraisal report form applicable for the specific type of property. The type of form to be used will be dependent on the guidelines followed by the lenders.

Our offering of quality reviewing Valuations products includes:

1004 URAR Single Family – This report form is designed to report an appraisal of a one-unit property or a one-unit property with an accessory unit; including a unit in a planned unit development (PUD), based on an interior and exterior inspection of the subject property.

1004 URAR REO – Delivers the same information as the 1004 URAR Single Family report and includes an REO Addendum, which provides an itemized cost of repairs as well as an “as is” and “as repaired” value.

1004C URAR/Manufactured Housing – This report form is designed to report an appraisal of a one-unit manufactured home; including a manufactured home in a planned unit development (PUD) based on an interior and exterior inspection of the subject property. A Manufactured home located in either a condominium or cooperative project requires the appraiser to inspect the project and complete the project information section of the Individual Condominium Unit Appraisal Report or the Individual Cooperative Interest Appraisal Report and attach it as an addendum to this report.

1004D Update Appraisal/Final Inspection – This report form is intended to provide the lender/client with an accurate update of a prior appraisal and/or to report a certification of completion. The appraiser must identify the service(s) provided by selecting the appropriate report type. It can also be used to report a certificate of completion. At a minimum an appraisal update includes an exterior inspection from the street along with research verification and analysis of the current market data to determine if the property has declined in value since the effective date of the original appraisal.

1025 Multifamily – This report form is designed to report an appraisal of a two- to four-unit property, including a two- to four-unit property in a planned unit development (PUD). A 2-4 unit property located in either a condominium or cooperative project requires the appraiser to inspect the project and complete the project information section of the Individual Condominium Unit Appraisal Report or the Individual Cooperative Interest Appraisal Report and attach it as an addendum to this report.

FHA Single Family – This form allows you determine a home’s market value and acceptability for FHA mortgage insurance purposes. In addition to estimating value, the appraiser examines the property for any visible, obvious and/or apparent deficiencies that may affect safety of the property’s occupants. Appraisals include detailed property, site and neighborhood descriptions; amenities and services; estimated income and expenses; replacement costs and other items included on the FHA Multifamily Summary Appraisal Form.

1073 Condo/REO – This report form is designed to report an appraisal of a unit in a condominium project or a condominium unit in a planned unit development (PUD) based on an interior and exterior inspection of the subject property. REO includes an Addendum, which provides an itemized cost of repairs as well as an “as-is” and “as-repaired” value.

2055 Exterior Quantitative Analysis – This report form is designed to report an appraisal of a one-unit property or a one-unit property with an accessory unit; including a unit in a planned unit development (PUD), based on an exterior-only inspection of the subject property from at least the street. This report does not cover an appraisal of a manufactured home or a unit in a condominium or cooperative project.

Land Appraisal – Used for valuating a vacant land and land-only appraisals that exclude structure values. The report provides a location map, photographs, three comparable sales and detailed description of the site, history, including, tax information, zoning and surrounding neighborhood.

2000 Residential Appraisal Field Review – A lender uses this form for the spot-check appraisal component of its quality control process. This appraisal field review report is intended to provide the lender/client with an opinion on the accuracy of the appraisal report under review.

1007 Rent Schedule – The lender uses this form to obtain the market rent for a conventional single-family investment property.

216 Operating Income Statement – This form determines the amount of operating income that can be used in evaluating the applicant’s credit on applications for conventional mortgages that are secured by one-family investment properties and all two- to four-family properties (including those in which the applicant occupies one of the units as a principal residence).


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