real estate finance - full book (500 pgs)

The borrower pays for this policy no policy will

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Unformatted text preview: appraised the property, a conditional commitment is issued. The “conditional” includes any other conditions that the FHA is requiring, such as termite work and repairs, all of which must be completed before FHA insurance will be issued. A copy of the conditional commitment is sent back to the lender who ordered the appraisal. The DVA operates in much the same way as the FHA. A DVA appraisal is ordered by filling out an appraisal request form. The appraisal can be ordered by anyone, but in practice is usually ordered by a DVA–qualified lender. The appraisal request is sent to the DVA, which in turn gives it to an independent fee appraiser who is DVA qualified. The DVA uses fee appraisers for all its field work. It does have full–time staff appraisers, but their function is to act as reviewers and supervisors. Once the fee appraiser has completed the appraisal, it is sent to the DVA office for review. If it is approved, the next step is to issue a Certificate of Reasonable Value (CRV), which also includes other conditions and repairs that the DVA requires on the property. A copy of the CRV is mailed to the one who ordered it and to the veteran–buyer. FINAL MARKET VALUE Once the appraiser has completed the three approaches to value, the next step is to arrive at a final estimate of value. This process is called final reconciliation. The appraiser begins the process by analyzing the strengths and weaknesses of each approach to determine which approach will give the most reliable answer. In the appraisal of single–family properties, more weight is given to the sales comparison or market approach because it is the most reliable. The cost approach is 12-18 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 12: QUALIFYING THE PROPERTY not as reliable, because it is difficult to estimate depreciation and to determine the value of land in a built–up neighborhood. The cost approach is best used for special–purpose properties such as churches, schools, government...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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