Dillon H. Fries & Associates

Real Estate Appraisers & Consultants

Atlanta, Georgia

Foreclosure Appraisals

There is generally a reason that a lender ends up with an REO (Real Estate Owned) property other than the borrowers lack of ability to make loan payments on a timely basis.   Most borrower's that run into financial troubles would rather sell the property than to be foreclosed on.  Therefore, most properties that the lenders end up with have other problems that need to be dealt with and are often the appraiser's and lender's worst nightmares.  The properties often need extensive repairs and/or improvements, may be located in areas that are economically depressed and have over supply conditions, or might be the proverbial "White Elephant" that is either over improved, poorly designed or constructed, uses materials that are out of favor with the market,  or may be out of character for the demographics of the area.

In such cases, the down and dirty, quick and easy, inexpensive, limited scope, summary mortgage appraisal report does not fit the bill without substantial additional input.   The relocation appraisal report on an ERC form is much better suited for these needs.  Most lenders are not aware of any form other than the URAR and only envision spending a few hundred dollars more on a property that they suspect to lose their shirt on anyway.  In most cases, this proves to be very short sighted and the lender pays for an appraisal that does not address his needs and thus contribute to their losses rather than being made aware of the problems and provided with a solution.  A properly prepared and complete appraisal (regardless of the form) that addresses the needs and problems of a foreclosure will save money in the long run.

Dillon H. Fries has previously provided services to FNMA as a regional reviewer of appraisals on REO properties throughout the Eastern United States and has provided solutions to lenders on many of their most troublesome properties.

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