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New Uniform Appraisal Dataset (UAD) becomes effective September 1
Read the summary Bill Holmes of Ann Arbor Mortgage has prepared to find out how you can help avoid unnecessary delays.
Big Changes Ahead with the UAD on September 1
Q. What is it?
A. The UAD defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields.
UAD Specifications:
Three Property Improvement Ratings = Remodeled, Updated, Not Updated
Six Condition Ratings = C-1 to C -6 (Currently - fair, average, good, superior)
Six Quality Ratings = Q-1 to Q- 6
Q. What types of loans will it affect?
A. At this point, just Fannie Mae and Freddie Mac conventional mortgages. Effective January 1, 2012, FHA will adopt the system with all new case numbers issued. All single family and condominium Fannie Mae & Freddie Mac Real Estate Appraisals MUST use the ratings. The subject Real Estate Appraiser will be required to ask the subject home owner specific questions about the subject property. The answers must support the appraiser's opinions for the ratings in the appraisal report.
A. No. With the new standards, lenders will be providing more appraisal data than is provided today, but on the existing forms.
A. More explicit info that was never requested before will be required. For example, the following are new data points that are being requested:
- Days on Market for the subject property and each comp
- Specifically defined Condition and Quality Ratings
- Status of improvements to kitchens and bathrooms for the subject property
- Sale type for the subject property and each comp
- The UAD requires that the United States Postal Service (USPS) standardized mailing address be included in the appraisal report.
- The UAD requires the site size for all properties that are less than one acre to be reported in square feet and the site size of all properties that are one acre or greater to be reported in acres.
"How can Realtors® help in making a smooth transition?"
- Take extra time when filling out the Seller's disclosure. The UAD is particularly focused on the 15 year mark--so the year upgrades and renovations were done is going to be important. According to the UAD, anything older than 15 years is not considered updated and redecorating is not renovation--it has to actually involve physical changes.
- The view from the home is receiving a lot of attention and is going to be very specific in the UAD so be prepared for pointing out enhanced views particularly if they are seasonal (i.e. park).
- Please have Realtors provide comparables at or before the appraisal inspection for appraisers to review PRIOR to the writing of the report.
- Include more detailed photos - in particular kitchen, baths, ½ baths, basement finish, (when you think you have taken enough photos, take a few more).
- Note the basement square footage.
- Note the finished basement square footage.
- Attach to the listing a detailed list of updates completed (the dates of these along with the extent of the updates).
- When appraisers call for information, return their calls in a timely manner (the current deal they are working on may not be yours, but the next one may be - you are helping your fellow Realtors and they, in turn, will be helping you).
Be prepared - this will undoubtedly add extra time to the appraisal turn-around time and may also increase underwriting turn times. Please build extra time into your contingency removal timeframes.
Many thanks to Bill Holmes at Ann Arbor Mortgage for this UAD summary.
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