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Field Review for an Appraisal

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Super Contributor

Field Review for an Appraisal

I was talking to a good friend of mine and he is in the process of refinancing his house. Apparently the bank AVM system? kicked out the appraisal so he has to pay for a field review.

 

He was told that the field r eview guy just takes a picture of the house in front and reviews the existing appraisal and checks it. Why the need for that and what if it comes back lower?

 

Do appraisers contradict each other a lot?




Message 1 of 7
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Moderator Emerita

Re: Field Review for an Appraisal

AVM = an automated valuation system, no human involved in input

 

Yes you will get variances between appraisers on any property. The AVM values (IMO) work for subdivisions where the housing is the same type, built at a similar time and if there is enough activity for sales in the subdivision. AVM models do not do well with rural properties at all, by the nature of the property. Normally rural properties have many more differences - different land sizes, different out buildings, and substantially different structures. As a consequence the AVM valuations come in low, to protect the lender, IME.

Message 2 of 7
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Super Contributor

Re: Field Review for an Appraisal


@StartingOver10 wrote:

AVM = an automated valuation system, no human involved in input

 

Yes you will get variances between appraisers on any property. The AVM values (IMO) work for subdivisions where the housing is the same type, built at a similar time and if there is enough activity for sales in the subdivision. AVM models do not do well with rural properties at all, by the nature of the property. Normally rural properties have many more differences - different land sizes, different out buildings, and substantially different structures. As a consequence the AVM valuations come in low, to protect the lender, IME.


What if the field review comes it about the same? Will the AVM kick it out again?

 




Message 3 of 7
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Senior Contributor

Re: Field Review for an Appraisal

Field reviews are often used to verify, via a visual inspection  (ssometimes called a "drive by"), that the property is still standing and looks to be in good shape. It supplements the AVM.

Message 4 of 7
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Moderator Emerita

Re: Field Review for an Appraisal

From your original post it doesn't sound like they are doing a full review. It sounds like they are just augmenting the AVM value with photos. There may not even be an appraiser involved in this because it is an automated valuation.

 

The lender appears to be relying on the AVM. If the AVM valuation is enough to do the loan, then it is a non-issue. The issue arises if the AVM value makes the requested loan impossible to do. Your friend was fine with the value, right? This is just a little additional legwork the lender wants (more photos) to show the property as it is today.

Message 5 of 7
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Super Contributor

Re: Field Review for an Appraisal


@StartingOver10 wrote:

From your original post it doesn't sound like they are doing a full review. It sounds like they are just augmenting the AVM value with photos. There may not even be an appraiser involved in this because it is an automated valuation.

 

The lender appears to be relying on the AVM. If the AVM valuation is enough to do the loan, then it is a non-issue. The issue arises if the AVM value makes the requested loan impossible to do. Your friend was fine with the value, right? This is just a little additional legwork the lender wants (more photos) to show the property as it is today.


The appraisal was 245K and the AVM kicked it out so i was told the field review guy doesn't need to come in the house. He/she will just take an outside picture and eveluate the existing appraisal. I looked at the existing appraisal and the comps were right on and some were priced a tad bit more expensive but sold. So he is hoping he gets at least 240K to eliminate the PMI.

So the field review just made him nervous and I have never heard of it so I told him I would ask on here.




Message 6 of 7
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Moderator Emerita

Re: Field Review for an Appraisal

Looks like your friend is fine. The value works and they just need current photos.

 

EDIT:  here is an appraisal field review form - you can see it is very simple http://www.freddiemac.com/singlefamily/forms/sell/pdf/1032.pdf

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