How to Identify a Residential Complex Property
Excerpts: A complex one-to-four family residential property is defined as a property that meets at least one of the following criteria:
- The property to be appraised is atypical
- The form of ownership is atypical
- The market conditions are atypical
“Below we dig a little deeper into each type of complex property outlined above, providing detailed descriptions and examples of properties that would fall under each of the three categories.”
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My comments: This is the best explanation I have read about this issue. All appraisers encounter complex properties. You may or may not decide to accept the assignment. Always check the info you have on the property before accepting the assignment. Or, you find out after starting on the appraisal that it is more complex than you thought. I regularly turn down assignments because it will require more time, or I don’t want to “reinvent the wheel,” as I may never do another like it, etc.
Mortgage lending appraisals are very, very cyclical. When you are very busy, I recommend turning down these assignments to make more money. You will have lots of time during the slow period to accept these assignments.
In ancient history, before AMCs, I often did the tough ones for loyal clients as a favor. AMCs will go down the list, sometimes for days, trying to find an appraiser. One called me yesterday about a mixed-use property that their lender client said was residential. From online information, it looked like commercial on first floor. The issue was highest and best use, of course. I told them I did not know any commercial appraisers who work for AMCs, plus the fee would be over $2,000. You have to know that city’s local zoning regulations, requiring local expertise to determine the highest and best use.
The Bottom Line: Don’t Risk Your Appraisal License if it is too complicated for you!! I get many calls from appraisers having problems. This is always my answer. I have returned fees up to $2,000 after spending lots of hours on the assignment.
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To read more of this long blog post with many topics, click Read More Below!!
NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, mortgage origination stats, etc.