Appraisal News and Business Tips

2-16-17 Newz .Land surveys in 1784 .Common appraisal errors

 Land Surveys in 1784 – Alexander Hamilton vs. Thomas Jefferson

Metes and bounds vs. Meridians

Excerpts:
In 1784, Thomas Jefferson and Alexander Hamilton squared off over the best way to divvy up newly American territory.
The two factions also had different ideas about how to divide the land. Jefferson and his allies wanted to use an innovative system of land division, which would use meridians and other abstract geographical reference points to measure out uniform parcels of land. Hamilton and his allies thought that would take too long. As long as settlers had been grabbing up land in America, they’d operated according to a principle of free settlement-essentially, first-come, first-serve. Hamilton wanted to divide up the land using the more traditional “metes and bounds” system, in which landmarks and other features of a piece of land are used to describe its borders.
The Public Land Survey System was created because, in the 1780s, the new United States of America needed money. The Revolutionary War had left the federal government with debts, and its leaders planned to raise funds by selling off land where American colonists had yet to settle.
My comment: Fascinating!! We all study how our country is divided geographically in our basic appraisal classes. George Washington was also a land surveyor. Surveyors were the predecessors to appraisers. RICS (Royal Institute of Chartered Surveyors), the largest international appraisal association was founded in London in 1868.
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Common Appraisal Errors – Part 1
by Joshua Walitt, SRA, MNAA
Excerpts on adjustments: You don’t need to write a book. In fact, most adjustments can be summarized relatively succinctly. Consider the following when summarizing your adjustments:
* What specifically is the difference between the subject and the comp? This is normally apparent for garages and GLA, but may not be as easily discerned for condition or quality. In other words, regarding quality-related components, what specific characteristics make the comp different from the subject?

* Did you use paired sales, a cost-based method, grouped sales comparison, a statistical analysis, or a different technique to derive the adjustment amount? If the adjustment is unusual, large, or somehow complex, consider adding a few extra sentences so your user understands.
To read the full article, go to:
My comment: Good, practical advice, on what to write in your appraisals about adjustments, highest and best use, scope of work, reconciliation, etc. The author works for an AMC, and was a fee appraiser and has a good “insider” perspective.
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Residential Highest and Best Use Analysis: More than Just a “Check Box” –
Reviewers and state boards 
want to see more explanation
By Denis Desaix, MAI, SRA

 
In the February 2017 issue of the 
paid Appraisal Today
Excerpt: 
“Fannie Mae will only purchase or securitize a mortgage that represents the highest and best use of the site as improved.” And, the USPAP says: “An appraiser must analyze the relevant legal, physical and economic factors to the extent necessary to support the
appraiser’s highest and best use conclusion(s)”.
Today, with increasing Scope Creep, residential appraisers are expected to include more explanation of H&BU. To me, the primary issue is: “Why risk your license for doing a misleading appraisal when H&BU is not the current use?” You need to think about H&BU for all residential properties. Also, clients are expecting to see more H&BU analysis in your reports, especially when the subject is unusual for the neighborhood. H&BU analysis keeps you out of trouble. For example, the home is in commercial zoning. A H&BU analysis is needed, but you need to know about commercial
properties. You turn down the assignment.
The article includes short case studies, with sample explanations for your reports, such as:
  • Renovated home – market strong with nearby new construction
  • Older home needing updates- stable market
  • Fixer needing repair- market weak three adjacent parcels needing valuations for estate purposes in a suburban neighborhood of $1,000,000+ homes with many issues including encroachments, old home with un-permitted additions, etc. 5 appraisers turned this down.
To read the full article, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
 
If this article helps you avoid reviewer questions, 
it is worth the subscription price!! 
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If you are a paid subscriber and did not get the February 2017 issue, emailed February 1, 2017, please send an email to info@appraisaltoday.com  and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it
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The 10 Snobbiest Cities In America
Excerpts: Before you look down your nose at this post, you might want to see if it’s about you.
The top 5 cities
1. San Francisco, CA
2. Washington, D.C.
3. Seattle, WA
4. Scottsdale, AZ
5. Oakland, CA
Click here for the full city list and how it was compiled.
Snobbiest mid-size cities
My comment: Oakland CA?? I live across a narrow tidal channel from Oakland, 10 miles from San Francisco, but no one would say my city was snobby ;> Some very interesting results in the small and mid-size cities also.
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America’s Top 10 Towns for Pest Infestations
Top 5:
  1. Houston TX
  2. New York city
  3. Washington DC
  4. Atlanta GA
  5. Philadelphia PN
Check out these related articles (links in the original article:
9 of the Worst Pest Infestations We’ve Ever Seen
5 Spine-Tingling Stories From Exterminators and What They Learned
And more…
My comment: I am so glad I live in (snobby) California ;> Pests don’t like our very dry summers (Mediterranean climate). I used to hear horror stories from a former roommate who grew up in Plant City, FL.
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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 www.mbaa.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 https://www.appraisaltoday.com/products.htm 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
WASHINGTON, D.C. (February 8, 2017) – 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 February 3, 2017.

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 6 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The refinance share of mortgage activity decreased to 47.9 percent of total applications, its lowest level since June 2009, from 49.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.9 percent of total applications.

The FHA share of total applications decreased to 11.9 percent from 12.1 percent the week prior. The VA share of total applications increased to 12.7 percent from 12.4 percent the week prior. The USDA share of total applications remained unchanged at 0.9 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,000 or less) decreased to 4.35 percent from 4.39 percent, with points remaining unchanged at 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,000) decreased to 4.27 percent from 4.32 percent, with points decreasing to 0.31 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.16 percent from 4.17 percent, with points increasing to 0.37 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.55 percent from 3.61 percent, with points increasing to 0.34 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.39 percent from 3.33 percent, with points decreasing to 0.18 from 0.22 (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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