What is a Comparables or Comp Check? Typically, banks/lender’s are trying to determine the value of a prospective mortgage client property/home to confirm adequate equity exists for a loan.
Understand that Real Estate Appraisers are primarily governed by the rules and regulations from the Uniform Standards of Professional Appraisal Practice (USPAP). One of the key USPAP restrictions specifically prohibits an appraiser from accepting an assignment to appraise a property based on a predetermined value or range of values.
When responding to a Comp Check request to find out if a home will appraise for a certain value, we then cannot accept the assignment to do the actual appraisal. In performing a Comp Check, and even when verbally stating a simple value range, by the strict USPAP standards we have in essence performed a form of appraisal and are bound by requirements to maintain complete records showing how and when we arrived at the value that we provided with the Comp Check. In essence, a Comp Check is an appraisal.
The main intent of this important USPAP rule is to dissuade dishonest appraisers from over-appraising properties and "hitting the target." USPAP standards are trying to prevent predatory lending practices, and ultimately stop mortgage fraud in our industry.
In addition to the ethical dilemma, we are typically asked to do as many as 5-10 Comp Checks each week, and each request requires considerable research time and effort. The majority of requests we get are for qualifying values far in excess of the current prevailing market values. Property values can also vary significantly dependent upon condition, upgrades, views, etc. Since many of these Comp Checks reveal that the requested value is not feasible, these free Comp Checks result in many hours of lost work time and money.
It is truly not our intent to waste borrowers/lenders money on useless appraisals for loans that will not work, though at the same time we cannot determine nor state any actual property values without performing the complete appraisal process per the USPAP Standards and Guidelines.
PAA - Professional Appraisal Associates has been performing high quality, comprehensive, and accurate Real Estate Appraisals for over 25 years. Instead of wasting time and money on useless appraisals for loans that will not work, give us a call and let us help you use the free comp check tools available on the Web. For more information about Professional Appraisal Associates, visit us at our Website at: ProfessionalAppraisalAssociates.com or feel free to call us at (805) 688-5033.