What’s your favorite part of the appraisal process?

Excerpt:

Number 1. Data collection and property description (38%)

“The best part is the property review. I enjoy seeing what people have done to their properties and talking to them about their homes.”

“I enjoy viewing/observing the subject home.”

“Detective work”

“Each dwelling is different, and not every appraiser takes the time to clarify the differences in the dwellings. The quality, the construction, the egresses, and especially the correct way to calculate GLA or measure a dwelling.”

Number 2. Data analysis (27%)…

To read more about favorites, click here

My comment: I love working in the field, so my choice is Number 1. But, my very best choice is getting paid ;>

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Two Kinds of Bedrooms & Bathrooms

Excerpt: As an appraiser, occasionally a homeowner will call me and point out that my report does not reflect the accurate bedroom and/or bathroom count. My first thought is that I may have missed something. However, most of the time, upon double checking my work, I realize why there is another reason for the confusion.

There are two types of bedrooms and bathrooms. You might be wondering how that can be, which is completely understandable. Let’s look at an example. How many bedrooms and bathrooms do you see in the sketch below?…

Foto above: “Emergency” exit from basement living area.

To see more fotos and sketches plus read more, click here

Excerpt: Appraisers separate the above grade area from the below-grade or basement area because this is the protocol established by ANSI standards. Any level of a house that is below the ground is considered to be the basement and it is listed separately.

One concern I get from those that I explain this to is that we are not giving any value to the basement. This of course is not the case and I will explain why.

As I mentioned above, when the price per square foot of a home is calculated you start off with the sale price of the home. The sale price reflects the value of all features of the home, which includes all of the levels including the basement.

To read more, click here

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Excerpt: Appraisers separate the above grade area from the below-grade or basement area because this is the protocol established by ANSI standards. Any level of a house that is below the ground is considered to be the basement and it is listed separately.

One concern I get from those that I explain this to is that we are not giving any value to the basement. This of course is not the case and I will explain why.

To read more, click here
My comment: Written for home owners and agents. A good explanation when you have questions about finished basements. The article above on Bedrooms and Bathrooms is also useful for basements.

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The Pros and Cons of Septic Tanks

Excerpts: Failed drain field: The success of the septic system is only as good as the drain field. Compacted soil in the area due to cars driving over it, tree roots encroaching, or groundwater saturation can cause a drain field to fail…

Repairs are your responsibility: If a municipal sewer pipe leaks or backs up on your property, the government is responsible to fix it. But if your septic system backs up or a pipe leaks, the cost of repairs is on you. However, knowing how the system works and being vigilant about calling for service when a drain slows or a soggy patch appears in your yard will prevent significant problems.

To read more, click here

My comments: This article has good info on septic tanks. Written for home owners but helpful for appraisers to avoid Septic tank liability claims. Septic tanks are the Number 2 most common non-value claim issue for appraisers. Number 1 is square footage. My July newsletter discussed this topic and many more reasons for E&O claims, plus recommended disclaimers. Claim example: appraiser said home was on sewer but was on septic.

I have appraised many homes with septic tanks. I also lived in homes with septic tanks. Definitely problems as compared with public sewers. I was also a consultant on a lawsuit where the appraiser said the home was on sewer, but they buyer found out it was on septic. It was in a developed area but for unknown reasons a small number of homes on one block were not on the public sewer. The seller said it was on sewer.Getting too many ad-only emails?

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Coming in the August issue of Appraisal Today

How to Keep Safe From COVID-19 When Appraising

In the July issue

  • Reduce your liability: Sample disclaimers/statements for your appraisals
  • Welcome to Appraisal Purgatory! A day in Appraisal Camp, Sedona, Arizona
  • E&O insurance – where to get it, reducing liability, most frequent claims, etc.
  • 2020 E&O insurance brokers

In the June issue

  • How to communicate with appraisers online. What’s the best way for you?
  • Fannie Temporary Appraisal Requirement Flexibilities – What they mean for you

In the April issue

  • COVID-19: Data, Comps, and Values
  • Data and Comps. It’s all about the data!!
  • Vaccines, Immunity and Q&As

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

If one of these articles gave you one good idea, it is worth the subscription price!!

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Top 10 mortgage lenders of 2019

Excerpts: HMDA data shows which lenders originated the largest number of loans

The Consumer Financial Protection Bureau released its annual report on Home Mortgage Disclosure Act data on June 24 with reports from 5,496 financial institutions.

The report stated banks collectively originated 32.4% of all reported originations in 2019 with 2.6 million loans. Credit unions followed with 714,000 loans making up 8.8% of originations. Independent mortgage companies took the lion’s share in 2019, originating 4.4 million loans. That accounts for 54.5% of all reported loans.

To read more, click here

My comment: Number 1 was Quicken Loans. I worry about non-bank lenders as they are not heavily regulated like banks, for example banks are required to have substanial cash reserves. #2 was United Wholesale Mortgage. #3 was Wells Fargo

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COVID-19 Humor. What we all need!!!

You may have seen the “official” chart of risk ratings, such as going to grocery store, gym or restaurant. This “alternate reality” graphic is lotsa fun and includes weird stuff such as risk rankings for shoplifting at a grocery store and axe catching contest ;>

To see the Funny Graphic, Click here

Click here to see an official risk chart with numeric ratings from Texas Medical Association

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Mr. Toilet House

Excerpt: Sim Jae-Duck, the one-time mayor of the city of Suwon, South Korea was born in a toilet at his grandparents’ house, which may explain his life-long obsession with healthy latrines.

As mayor of Suwon in the 1990s and early 2000s, he led an effort to clean and beautify the city’s public toilets. He later founded the World Toilet Association, dedicated to doing the same for the world. Appropriately, he became known as “Mr. Toilet” by reputation.

In 2007, in honor of the founding of the WTA, he demolished his home and had a new one made, designed by Go Gi-wong to look like a giant toilet. It was Sim’s dream house.

To read more, click here

My comment: Unusual house plus a Very Interesting backstory.

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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 paid monthly 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 7AM to noon, Pacific time.

Mortgage applications increased 5.1 percent from one week earlier

Mortgage applications increased 5.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 10, 2020. Last week’s results included an adjustment for the Fourth of July holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 5.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 16 percent compared with the previous week. The Refinance Index increased 12 percent from the previous week and was 107 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index increased 5 percent compared with the previous week and was 16 percent higher than the same week one year ago.

Mortgage rates continued their downward trend, with the 30-year fixed rate falling 7 basis points to 3.19 percent – another record low in MBA’s survey and 63 basis points lower than the recent high in late March. The drop in rates led to a jump in refinance activity to the highest level in a month, with refinance loan balances also climbing to a high last seen in March,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications fell over the week but remained 15 percent higher than a year ago – the eighth consecutive week of year-over-year increases. Purchase activity remains relatively strong, despite the continued economic uncertainty and high unemployment caused by the ongoing pandemic.”

The refinance share of mortgage activity increased to 64.2 percent of total applications from 60.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 3.0 percent of total applications.

The FHA share of total applications increased to 11.1 percent from 10.9 percent the week prior. The VA share of total applications increased to 11.0 percent from 10.4 percent the week prior. The USDA share of total applications decreased to 0.6 percent from 0.7 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.19 percent from 3.26 percent, with points decreasing to 0.33 from 0.35 (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 $510,400) increased to 3.53 percent from 3.52 percent, with points decreasing to 0.29 from 0.36 (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 3.24 percent from 3.31 percent, with points increasing to 0.29 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 15-year fixed-rate mortgages decreased to 2.70 percent from 2.77 percent, with points decreasing to 0.32 from 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 increased to 3.00 percent from 2.98 percent, with points decreasing to 0.02 from 0.10 (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.

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NOTE: NEW POSTAL ADDRESS

Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041

Email  ann@appraisaltoday.com 

www.appraisaltoday.com

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