Appraisal Review Checklist Page 6
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8Appraisal Review Checklist
Conventional Conforming Transactions
Appraisal Section
Answer
Action Required
SALES COMPARISON APPROACH (Continued)
If no, appraiser to complete the section, and
24
Did appraiser research the sale/transfer
Yes
No
N/A
A revised appraisal report must be provided.
history of subject and comps?
If yes, review/apply the investor’s guidelines.
25
If the subject property was sold within the
Yes
No
N/A
past 12 months, has a “flip” occurred?
If yes, appraiser must comment, and
26
If the subject property was sold within the
Yes
No
N/A
Appraiser to address declining market concerns.
past three years, is the current appraised
value less than the prior sale?
If yes, appraiser must comment, and
27
If one or more of the comparable
Yes
No
N/A
Appraiser to address declining market concerns.
properties has a prior sale within the past
12 months, did the most recent sales price
decreased from the prior sales price?
If no, appraiser must comment.
28
If subject was purchased in the past few
Yes
No
N/A
An additional level of review/justification is
years, is the rate of appreciation since the
required.
purchase reasonable?
Note: If appreciation is due to upgrading, the
improvements must be more than maintenance-
related and/or cosmetic.
If no, appraiser to comment.
29
Are subject and comps void of foreclosure
Yes
No
N/A
or non-arm’s length transactions?
An additional level of review/justification is
required.
If yes, or appraiser did not acknowledge, appraiser
30
If the subject property was an REO or is in
Yes
No
N/A
must comment.
an area where there is significant REO
Note: Neighborhoods with a high inventory of REOs
activity, was the appraised value
competing with the subject property could
impacted?
impact the value.
31
If no, appraiser to comment; probably need additional
Is the Market Value bracketed by the
Yes
No
N/A
comp(s).
Adjusted Sales Price of the Comparables?
RECONCILIATION
If yes, ensure appraiser checked “No” to the
Is the appraisal made “as is”?
1
Yes
No
N/A
question, “Are there any physical deficiencies or
adverse conditions that affect the livability,
soundness, or structural integrity of the property”
in the Improvements section.
If no, and subject to completion of repairs, ensure
that needed repairs are listed, and
All necessary repairs must be completed prior to
closing, and
Obtain an “Appraisal Update and/or Completion
Report” with photos.
If yes, review/apply the requirements in the
2
Is the appraisal more than 90 days old?
Yes
No
N/A
applicable “Investor DU/LP Overlay Matrix” on the
Conventional Underwriting
page on the CMC
Intranet, and
Review/apply the investor’s guidelines.
3
If no, loan is not saleable.
Is the Market Value supported by the
Yes
No
N/A
Sales Comparison Approach, Cost
Approach (if developed) and Income
Approach (if developed)?
If no, appraiser must provide comments.
4
Does the market value support the sales
Yes
No
N/A
price on a purchase transaction?
ADDITIONAL COMMENTS
If yes, appraiser to provide additional detail as
1
Are there any comments that identify a
Yes
No
N/A
needed.
situation that negatively impacts safety,
An additional level of review/justification is
habitability or marketability of the
required; loan may not be saleable.
property?
If yes, appraiser to provide additional detail as
2
Do any comments contradict other
Yes
No
N/A
needed, and
information in the appraisal/inspection
Provide revised appraisal report.
report?
COST APPROACH
1
If no, appraiser must comment, and
If the site value exceeds 30%, did the
Yes
No
N/A
Review/apply the investor’s guidelines,
appraiser provide an acceptable
explanation?
2
If no, appraiser must comment.
If there is above average physical,
Yes
No
N/A
functional and/or external depreciation, did
An additional level of review/justification may be
the appraiser provide acceptable
required.
comments?
3
If no, loan is not saleable.
If Remaining Economic Life is listed, is it
Yes
No
N/A
longer than the term of the loan?
Appraisal Review Checklist
Page 6
August 17, 2011
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