Appraiser vs. AVM vs. Zestimate… Ten Properties

Excerpt: On a regular basis, my opinion of value of a property I am appraising, is frighteningly similar to an AVM’s value. While that is the case, as you will see in this article, that is not always the case. You might be wondering what an AVM is? AVM stands for Automated Valuation Model. It is a computer program that uses mathematical modeling to derive a value based upon the data it is provided.
In this article I differentiate the typical AVM from Zillow’s Zestimate because Zillow claims to be more accurate than other AVM’s, due to the technology they use. Zillow’s Zestimate is an AVM.
To read more, click here
My comment: Try this on appraisals you have recently done and see the accuracy in your market. Read the article comments and leave your comment.

NOTE: Please scroll down to read the other sections of this long blog post on Credit union deminimus increase, Fascinating rock formations, $11 million view, mortgage origination stats, etc.

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25th Anniversary of These Weekly Free Email Newsletters!!

On June 17, 1994, I sent out my first weekly email update to Tracy Taplin, Bruce Hahn, Tom Cryer, and John Warr. Bruce Hahn still subscribes. The topic was FIRREA/deminimus. I missed a few weeks (computer problems, traveling) but subscribers became “hooked” on their weekly news, jokes, rumors, and tidbits! The distribution list is over 17,000 appraisers now, and growing every day.

This newsletter started with my Compuserve account, then shifted to my personal email (Eudora) after the first web browser made the internet email much easier to use. I mostly had people write down their names and email addresses when I was teaching, speaking or doing my annual conference. It is very hard to figure out hand written email addresses!

I set up my website in 1998 and had an email form to fill out to subscribe. It took a lot of time to manually enter the names and email addresses. Keeping track of email changes was a nightmare. In 2003 I started using Sparklist to help manage the addresses but it was klunky to use and was getting very expensive. I got up to about 3,500 subscribers. In 2008 I started using Constant Contact, which is very affordable and easy to use. I put a signup form on my website home page. The number of subscribers increased rapidly and is now at over 17,000.

In the early years it had just a few paragraphs. By 2003 it was up to about 3-4 pages long. Since 2008 it has been about 4-5 pages, but was formatted to be much easier to read.

The topics have changed over the years, starting with FIRREA in 1994. Mortgage loans and appraisal orders have gone up and down significantly over the years. Significant mortgage broker pressures from about 1995 to the mortgage crash in 2008, AMC takover, Fannie’s CU in 2015, etc. etc.

I started my paid newsletter in June, 1992. In 2008, I switched to PDF-only and quit printing it. Lots more flexibility in length, plus a lot less expensive! Started with 12 pages. Now typically well over 12 pages, up to about 18 pages.

Note: I somehow forgot about it last month ;>



NCUA Raises Commercial Deminimus from $250,000 to $1,000,000.

“The NCUA Board of Directors today quadrupled – from $250,000 to $1 million – the appraisal threshold for nonresidential real estate loans. NCUA is the National Credit Union Administration…

Increasing the threshold would drastically increase the number of nonresidential real estate loans that would not require an appraisal.”

To read more, click here

My comment: Last year the FDIC raised the commercial deminimus from $250,000 to $500,000. The FDIC has proposed raising the residential deminimus from $250,000 to $400,000.

I didn’t know that credit unions made any, or maybe a only a few, commercial loans! There are no AVMs or Zillow for commercial properties. Who will they use for “evaluations”, especially in non-urban markets with very little data. Who will they have to review the evaluations?

What does this mean for residential? More increases in deminimus?
FYI, Fannie can still require appraisals. When FIRREA passed in 1989, with a $250,000 deminimus, they still required appraisals for many loans, as they do now. We all thought residential lender appraising would be in big trouble. Fortunately, we were wrong!!


Future changes in appraising and how they will affect you!

  • Fannie’s big changes: New Forms, Revised UAD and Bifurcated (Hybrid) Appraisals
  • Old Versus New: Conflict or Opportunity?
  • The Appraisal Industry at the Crossroads of Change and Re-invention

To read the articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

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Amazing Rock formations from the U.S. and other countries

Just For Fun!

Great photos plus brief comments.

Photo above is from the empty tombs at Petra, Jordan that have the most amazing layers of colors from the different minerals in the rocks.

Photo above is from Western Australia – the Pinnacles Desert has thousands of rock formations jutting up from the sand.

For more info, click here

My comment: I took a beginning geology class my last semester in college. I loved it, but it was too late to change majors….


How Much Is a View Worth in Manhattan? Try $11 Million for Air Rights

Excerpt: In New York City’s forest of tall buildings, having a view is an inestimable commodity, to be treasured and, when necessary, fought over.

There have been pitched battles over Brooklyn Bridge vistas blocked by waterside apartments, and the shadows cast by billionaires’ apartment towers over Central Park.

But when the residents of a 12-story loft building in Chelsea learned that a proposed tower next door threatened to darken most of their windows and block their Empire State Building views, they tried a less confrontational approach.

They banded together to make the developer an unusual offer: $11 million not to build. (They purchased the air rights.)

To read more, click here

My comment: Wow!! Of course, lots of people are very protective of their views. I have done several litigation reports over blocked views by neighbor’s trees.


Course Title: NEW
FHA Appraisal Training — Ft. Worth, TX

Wednesday, August 14, 2019, 8:30 AM to 4:00 PM (Central)
Check-in begins 30 minutes before the start of the session.

Event Location:
Hurst Conference Center
1601 Campus Drive
Hurst, TX 76054

Jurisdictional Host:
Denver Homeownership Center

Registration Link: 

This free, on-site training will cover FHA appraisal requirements, including FHA appraisal protocol and updates to FHA appraisal policy as outlined in FHA’s Single Family Housing Policy Handbook 4000.1. This training also takes an in-depth look at a variety of appraisal-related topics including: property acceptability criteria; minimum property requirements; property defects; appraiser responsibilities and requirements; and, much more.

This training is intended primarily for appraisers; however, other industry professionals may also benefit from attending. Priority will be given to appraisers.

Special Instructions:
Advance registration is required by August 7, 2019; seating is limited and is available on a first-come, first-served basis.
For additional information, contact Deborah Byers via email at: or by phone at (800) 225-5342.


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 7AM to noon, Pacific time.

Mortgage applications decreased 1.9 percent from one week earlier,

WASHINGTON, D.C. (July 24, 2019) – Mortgage applications decreased 1.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 19, 2019.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week and was 81 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 6 percent higher than the same week one year ago.

“Mortgage applications were down last week, even as rates moved lower across the board, with the 30-year fixed rate at 4.08 percent. Refinance activity was lower, but we did see government refinance applications increase, driven solely by a 12 percent rise in FHA applications,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Mortgage rates right now are comparable to the average rate of 4.10 percent for June, but refinances last week were 7 percent lower than last month. This is an indication that as we see rates lower for longer, borrowers need more of a drop in rates to consider refinancing.”

Added Kan, “Purchase applications decreased for the second straight week and have been somewhat volatile lately, but were still 6 percent higher than a year ago.”

The refinance share of mortgage activity decreased to 49.8 percent of total applications from 50.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.7 percent of total applications.

The FHA share of total applications increased to 11.3 percent from 10.6 percent the week prior. The VA share of total applications increased to 13.1 percent from 12.9 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.08 percent from 4.12 percent, with points decreasing to 0.33 from 0.38 (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 $484,350) decreased to 4.04 percent from 4.07 percent, with points increasing to 0.25 from 0.21 (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 3.98 percent from 4.01 percent, with points increasing to 0.31 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.45 percent from 3.48 percent, with points remaining unchanged at 0.32 (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 decreased to 3.57 percent from 3.58 percent, with points remaining unchanged at 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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.


Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105, Alameda, CA 94501
Phone 510-865-8041 | Fax 510-523-1138

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