Simplified realizes lenders will require more than what an AVM or Alternate Property Valuation can provide. Lenders now have the ability to not only order a traditional USPAP compliant appraisal (1004, 2055), but also the ability to request a Home Equity Appraisal.
Home Equity Appraisals are USPAP compliant, and are completed by an appraiser. The appraisal identifies the client by name or type, states the intended use of the appraisal and the real property interest appraised, and includes a defined market value as of the effective date of the report. Home Equity Appraisals include a scope of work used to develop the appraisal and state all extraordinary assumptions and hypothetical conditions so that lenders can make educated, fact-based decisions regarding loan applications.
Home Equity Appraisals also provide a description of the property, identify its current and projected use/highest and best use based on age and location, and indicate any zoning restrictions that may apply.
Home Equity Appraisals include a description of the methodology behind the valuation of the property, disclose external data sources and property specific data used for the appraisal, include photographs of the property and describe the neighborhood or local market conditions. Home Equity Appraisal can also disclose any prior service on the property.
All Home Equity Appraisals are signed by the appraiser and include limiting conditions and certifications, and provide a retail value AVM for lenders’ use in completing a loan. Home Equity Appraisals are priced well below the cost of a traditional appraisal and thus are an excellent option for lenders and borrowers alike.