How do we value a brand new house in an old neighborhood?

By Ryan Lundquist
Excerpt: Tip #5. The wrong one & modern homes: Just because something is brand new does not mean it’s going to fetch top dollar. If it’s the wrong type of house for the neighborhood, buyers might actually pay less for the property. It’s like when someone builds a plain earth-tone stucco tract home in a classic area with Tudors and Bungalows. Despite being new it might actually sell with a price discount if it doesn’t have any hint of era charm for the neighborhood. On the other hand there are modern homes popping up all over Sacramento (CA) and beyond that seem to defy this idea. These homes definitely don’t blend into the neighborhood at all in terms of design, but they’re still fetching high prices. Keep in mind though modern homes tend to carry wide appeal, so they are often able to break the mold of the neighborhood and still command a price premium because of their style. In short, modern homes are not vibeless tract homes, so it’s not really the same thing.
Click here to read the other 4 great tips plus some interesting comments!! 

Use Airbnb income to help buy a house?

Excerpt: …Loftium, a service in Seattle… will provide prospective home buyers with up to $50,000 for a down payment, as long as they are willing to continuously list an extra bedroom on Airbnb for one to three years and share most of the income with Loftium over that time.
If the link above does not work go to:

Transcontinental Valuations has gone out of business and stated that it can pay only 25% of the amount owed to each appraiser.

North Carolina requires AMC bonds for appraisal fees, but the bond is only $25,000.
Update on bond payments from surety company:
My comment: FYI, this info has been available since August, in this newsletter and other sources. When did you find out? This is the first of many AMCs going out of business. This may have been caused by losing a main client, similar to a fee appraisal business. Too dependent on one client. There was a comment posted in an appraiser email chat group that stated that one of their clients was purchased by another company and quit using this AMC, which seems reasonable.

What can you do? The Primary Rule: Do Not Be Dependent on Only a Few Clients. If you have a small AMC that seems to only place orders from a few clients, be very careful. Check online regularly to see if they are being purchased, having financial problems etc.

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Recent articles


  • How to get near the top of Google searches for FREE with no web site required!!
  • Residential Cost Approach  Part 2 –  Reconciliation, obsolescence, sample comments By Denis Desaix, MAI, SRA
  • Get started in attorney work by doing divorce appraisals – Significantly higher fees, no UAD, no underwriters, no AMCs
  • Why Does Regression Not Work? By George Dell, MAI, SRA, ASA
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PIVOT – Shift from Too Few Appraisers to Too Many Appraisers

Old News: Fees Going Up – Appraiser shortage 
Current News: Fees Going Down – Appraiser Oversupply
Just a few months ago, lenders, etc. were screaming about not being able to find appraisers, high fees, slow turn times, etc. AQB was working on lowering appraiser requirements, etc.

This is an inevitable consequence of the huge ups and downs of mortgage lending. Getting more appraisers licensed will not solve this problem.

Now, appraisers are getting desperate. Some are willing to do desktop appraisals with someone else doing the inspection. This has already started picking up. Lenders have always wanted faster turn times so they like this. They are not particularly fee sensitive like AMCs.

Did you ever do any ‘comp checks’? If not, you are unusual. These were free appraisal opinions but no one seemed to care. The same people are screaming about desktop appraisals.

What would I prefer? Driveby appraisals where the appraiser at least sees the exterior. We have been trained to look for negative factors. Real estate agents are sales people and have been trained look at the positive features. Much faster turn times than an interior inspection (shedule appointment, inspect interior, etc.)

Why did fees go up so much during the recent boom, for the very first time ever?

I will never forget my first appraisal association meeting (SREA) after I started my appraisal business in January 1986. From 1980 to 1985, mortgage rates were 18%+ and many residential appraisers left appraising as there were no jobs. (Most appraisers were staff appraisers for lenders at that time.) The room was filled with appraisers quoting turn times of 6 weeks or more. However, the same as the mortgage broker boom prior to 2008, there were relatively modest fee increases.

Why did fees go up so much in this last boom, for the very first time?? In 2008 the lending market crashed and there was an oversupply of appraisers.  The only factor that changed was aggressive bidding on orders done by AMCs looking for low fees. AMCs trained appraisers to compete on fee only. During the recent boom time, savvy appraisers started raising their fees. Fees almost doubled. They had never increased this much in the past, even with severe appraiser shortages such as in 1986.

What Does AMC Customary and Reasonable Fees Mean When Appraisal Fees Go Up and Down, Depending On Supply and Demand?

Fee surveys are for a specific time. But, fees went way up last year and are now coming way down. Why? Bidding – Supply and Demand. This starts with AMC fees, and then spreads to non-lender work. Apartment and commercial fees are not as affected, as they have did not spike up like sfr fees did last year. There was no commercial appraiser shortage due to increased demand.

The only published fees I know about are VA fees, which are very stable and cover a relatively wide geographic area. I strongly recommend getting on the VA fee panel. I wrote an article on this including lots of insider tips, available to paid Appraisal Today subscribers.

Of course, commercial fee appraisers have always done bidding. There have always been variable fees, depending on demand and supply, an individual appraiser’s workload, difficulty of the appraisal, purpose of the appraisal (litigation etc.)


Surviving the Residential Fee Wars

You Must reduce your competition on individual appraisals. Do not work for AMCs that broadcast orders. Some AMCs do not look for the lowest fees.

Work for clients with stable fees – VA and direct lenders have more stable fees.

Increase your non-AMC work. Although bidding has increased on 1-4 unit appraisals for non-lender work, bid requests are not broadcast and there are opportunities to speak with the prospect, to explain why the person should hire you. I will have an article on estate/trust appraising in next month’s newsletter or the next issue after that one.

The Best Option: Do non-lender work, especially for divorce, which can require testifying in court. Very, very few residential appraisers are willing to testify in court. Residential appraisers are particularly good at home appraisal, as they specialize SFRs. The typical ligation appraiser is an MAI, with relatively little SFR experience.

I will be writing about these options in future paid newsletters.
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 
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to or send an email to . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

Mortgage applications decreased 9.7 percent from one week earlier

WASHINGTON, D.C. (September 20, 2017) – Mortgage applications decreased 9.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 15, 2017. Last week’s results included an adjustment for the Labor Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 9.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12 percent compared with the previous week. The Refinance Index decreased 9 percent from the previous week. The seasonally adjusted Purchase Index decreased 11 percent from one week earlier. The unadjusted Purchase Index increased 10 percent compared with the previous week and was 2 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 52.1 percent of total applications from 51.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8 percent of total applications.

The FHA share of total applications remained unchanged at 9.9 percent from the week prior. The VA share of total applications decreased to 10.1 percent from 10.3 percent the week prior. The USDA share of total applications remained unchanged at 0.7 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.04 percent from 4.03 percent, with points remaining unchanged at 0.40 (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 $424,100) decreased to 3.99 percent from 4.00 percent, with points decreasing to 0.23 from 0.24 (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 increased to 3.97 percent from 3.94 percent, with points remaining unchanged at 0.34 (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 3.35 percent from 3.30 percent, with points increasing to 0.44 from 0.39 (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 3.30 percent from 3.17 percent, with points decreasing to 0.34 from 0.36 (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.

1 Comment
  1. Yep, especially in L.A. People pay big money for a concrete box (Leggo fetish) with glass and aluminum. After all, its the latest and greatest!

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