Zillow CEO sold his home for 60% of the Zestimate.

There is nothing wrong with Zestimates, unless you want to know what your home is worth.

From Jonathan Miller’s Housing Notes

Note: Scroll down the linked page to read this section


The day after the home sold for $1,050,000, the Zestimate showed a value of $1,750,405. This indicates that their CEO took a 40% haircut on the value of his home which was exposed to the market for a reasonable time and sold for 19% below its list price. But of course he didn’t dump the property. It couldn’t have been worth anything close to the Zestimate since the property was exposed to the market for a reasonable period of time and sold well below the list price which was well below the Zestimate.

The people at Zillow are smart and built a strong ground breaking brand, but that doesn’t always mean they are making the right decisions. Little did I know, when I met one of the founders at a party the day before they launched a decade ago, how much disruption they would cause. I innocently asked the question, “So, what do you do?” And in the response I heard things like “Expedia” and “Rhymes with Pillow.” Their intro to the public began with the “Zestimate” which unleashed a property narcissism within us as we have checked the value of our homes and compared those values to the houses of friends, colleagues, neighbors, celebrities, etc. That search tool was later de-emphasized as they focused on listings and building a nationwide property database.

Read this Most Interesting article, including Miller’s “insider” comments at:




Also, read this article from Inman about Zillow:


Citing the chasm between the sales price of Rascoff’s former home and the property’s Zestimate may be one way for real estate professionals to show clients that Zestimates are, as Zillow says, only a conversation starter for pricing a home, not the final word on its value.

Philip Gray, a San Leandro, California-based appraiser, is taking this approach. Bringing up the Zestimate of the property Rascoff recently offloaded will help him deal with the frequent pushback he receives from homeowners “who think Zillow is the magic 8-ball,” he said.


My comments: One of my most popular blog postings, even today, is from a few years ago, is about Zillow. I regularly have people tell me what Zillow said their house was worth. Of course, I say that it is not very accurate, but it is hard for an appraiser to compete with a free “number”. Guess maybe I should write up something for consumers. Now I have something to say ;>


Where in the U.S. Can You Find the Most Mansions?


Looking to live in an ultra-lux area? Need your neighbors to own a 10 car garage and a pool full of pink flamingos? SmartAsset recently dropped a new report outlining the metro areas with the most mansions across the U.S. While most of you are probably jumping to visions of A-list pads in the Hollywood Hills, the real results are actually quite surprising.

What state is the proud owner of all three of the metro areas with the most mansions? It’s not California, or even New York, but Utah. Yep, the Beehive state is living large. Runner-ups include the Connecticut coast (a short drive from New York City), Honolulu and Georgia.



Support vs. Proof for Adjustments 

– a controversial topic!!

As time goes by the appraisal profession is subjected to the latest notions or fads; one such notion recently is appraiser support for adjustments. There are many ways to support adjustments such as paired sales, depreciated cost, statistical/regression analysis to name a few.

Recently, it seems lenders, their investors and/or state appraiser regulatory boards have been placing more emphasis on the appraiser’s support for adjustments in the sales comparison approach…

Unfortunately, “support” for adjustments is morphing into “proof” for adjustments and more and more state boards are leaning towards the latter.

The current edition of USPAP states, “When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion (SR 1-4(a)) and that an appraiser, “must at a minimum, summarize the information analyzed…and the reasoning  that supports the analysis… (SR 2-2(a)(viii))(italics mine.) Note that USPAP does not say  appraisers must “prove” all of their adjustments.
The author is Bob Keith, former Oregon state appraiser regulator, who advises appraisers on what to do if they have a state board complaint. 


How do you normally prefer to get most of your CE credit?

Poll from www.appraisalport.com

6-1-16 poll on ce live or online

My comments: I have always wondered about this. I started long before online classes were available. I have lots of CE available where I live, so have always taken live classes. I also like to hear about local issues. I seldom take online classes. But, I sometimes take like “synchronous” classes that are “live”, which I do like. I regularly take webinars, but many don’t offer CE credit.


Are Appraisal Changes Putting FHA Loans at a Disadvantage?


When Perry “Pat” Turner Jr. visits a house to do an appraisal, he usually just brings a camera, a note pad and a measuring device.

But lately, the Richmond, Va., appraiser had to carry an expandable ladder with him so he can get into certain areas of the home.

The appraisal changes are making transactions “more costly and time consuming, hindering an FHA borrower’s ability to compete in today’s housing markets,” Tom Salomone, president of the National Association of Realtors, said in a March 18 letter to Edward Golding, the Principal Deputy Assistant Secretary for Housing at the Department of Housing and Urban Development. FHA is a part of HUD.


My comment: I did FHA appraisals in 1986-1987. I quit because they were too much more work than appraisals for conventional loans, for the same fees.


Replace Dodd-Frank?


Later this year, the Dodd-Frank Wall Street Reform and Consumer Protection Act will reach its sixth anniversary, but if Congressional Republicans have their way, Dodd-Frank won’t reach anniversary number seven and many of the financial reforms enacted by the landmark law will be repealed or replaced.

According to the Republican arm of the House Financial Services Committee, Rep. Jeb Hensarling, R-TX, who chairs the House Financial Services Committee, is planning to announce a Republican plan to replace Dodd-Frank.

Hensarling plans to reveal the Republicans’ plan in a speech on June 7 at the Economic Club of New York, the House Financial Services Committee said Tuesday.



HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to https://www.mba.org

Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to www.appraisaltoday.com/products or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

Mortgage applications increased 2.3 percent from one week earlier,

according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 20, 2016.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index increased 0.4 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 17 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 53.7 percent of total applications from 54.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications. The average loan size for purchase applications reached a survey high at $307,700.

The FHA share of total applications increased to 12.7 percent from 12.5 percent the week prior. The VA share of total applications decreased to 11.5 percent from 12.1 percent the week prior. The USDA share of total applications remained unchanged from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 3.85 percent from 3.82 percent, with points increasing to 0.37 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.


The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 3.82 percent from 3.74 percent, with points decreasing to 0.27 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.70 percent from 3.63 percent, with points decreasing to 0.27 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.06 percent from 3.02 percent, with points increasing to 0.40 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.09 percent from 2.94 percent, with points increasing to 0.31 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

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