Advice for Working with Difficult Clients

Excerpt: Even if the bulk of your appraisals are fairly cut and dried, and require minimal interaction with a human client, any appraiser will occasionally have to work with a difficult client. The assignment might require you to work with a specialty property that is hard to appraise, or with a client who is personally disagreeable, or exceptionally exacting, or who has an agenda that you don’t understand or can’t go along with. Here are some tips for working with difficult clients. Three of the topics:

– Working with AMCs and banks: Time management

– Working with non-lenders: Expectations management

– Deal with complaints immediately

To read the tips, click here

My comment: Some great, practical tips!! Maybe I will try some of them instead of Firing clients, my most popular option ;>

My motto: Appraising would be great except for the darn clients!!

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Will Big Data Put Appraisers Out of Business?

By Dustin Harris

Although Zillow (and other similar companies) keep their algorithms proprietary, they do give us enough information that we can get a pretty good idea as to where the data comes from. For example, according to Zillow’s own website, “we use public and user-provided data for house attributes, and some areas report more data than others.”

As an appraiser for over two decades, I see a blaring problem here. Very few areas have accurate public information for size, quality, condition, and other important features of houses. As you know, these are features that can dramatically affect an accurate value. This is especially true in non-disclosure states where I work such as Idaho, Wyoming, and Utah. As for user-provided data? This is information coming from places like the home owner themselves. Nothing biased there. If Zillow depends on good data to provide good estimates, the phrase “garbage in – garbage out” comes to mind.

To read more, click here

My comment: Real estate data is overall poor, except for a maybe conforming newer subdivisions. No standardization for public records. MLS data provided by real estate agents. Most data not standardized. That means human appraisers will be needed.

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10 Private Islands for Sale Right Now!

Dream about Escaping for a Few Minutes!!

Excerpt: Owning your own home is nice and all, but staking a claim on your very own private island—now that’s the ultimate in getting away from it all !

Ideal for separating yourself far from the crowds, an island retreat might be just the antidote to all your physical distancing concerns.

Here are two:

Cedar Island, MI Price: $499,000

Terra’s Key FL Price: $15 million

To read more, click here

My comment: I have been a sailor for many years. My dream is living on my own island, especially if it has a narrow road or a long walkway, to get there, like the foto for Terra’s Key, above!!

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ANSI Z765 square footage standards for homes changing

Excerpt: This standard, which has been in use since 1996, addresses the need for uniformity in calculating and reporting square footage (area) measurements of dwellings in the United States.

Home Innovation Research Labs, who is doing the changes, is an ANSI Accredited Standards Development Organization

To see the proposed standards, comments and lots of info click here

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To view a webinar on what appraisers say, click here

Potential Changes to ANSI Square Footage Standard

Appraiser eLearning with Bryan Reynolds with John Dingeman and Hamp Thomas

My comment: I don’t know if any appraisers participated in the planning meetings, but I am sure we wanted some changes.Getting too many ad-only emails?

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The August issue of the paid monthly Appraisal Today, focuses on Appraisers and COVID-19.

It will be available Free to all appraisers.

Watch your email inbox August 1 for the link

The April issue, available at www.appraisaltoday.com/coronavirus, discussed the basic science issues, which have not changed much. However, since then the amount and speed of scientific research has greatly expanded. New guidelines such as 20-45% (estimates vary widely depending on location, etc.) of people infected are asymptomatic, vaccines being tested, being outside is much better than inside, airborne particles inside with virus spreading widely, etc. have changed how we understand and fight COVID-19. There is more new information every day, even hourly.

Why am I writing about COVID in an appraiser publication? Almost all residential appraisers go inside homes, which is risky. The desktop and exterior alternatives have not been widely adopted by lenders and AMCs. Commercial appraisers have similar issues with going inside properties. I discuss appraiser PPE, virus transmission, research on risks inside small spaces, physical distancing, density of people in a home, and many other topics. We are all waiting for a vaccine so we can go back to somewhere close to the way it was before – no worries about getting infected when appraising, visiting friends and relatives, etc., etc.

I have been following the new coronavirus since January and wrote about it first in this email newsletter on February 21. I studied biology and chemistry in college and worked in labs before I became an appraiser. I will always be a scientist. Even if I never do another appraisal, I will always be an appraiser.

Why did I give away the April issue and the August issue of this newsletter?

Because it is the right thing to do.

Below are a two helpful videos, relatively short, to watch while you are waiting for the very long newsletter on Monday, August 1. It will have links to reliable online sources for more news, analysis, and opinions of our future to help you keep up with the deluge of information, which keeps increasing every day.

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COVID-19 Video Updates – Dr. Anthony Fauci and Vaccines

Below is information on interviews on PBS Newshour relating to the “overall picture” of COVID topics. Judy Woodruff is an excellent interviewer that does not hesitate to ask the tough questions.

FYI, I recommend watching the videos rather than reading the transcript or listening to the audio, especially for Fauci.

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Dr. Fauci has been involved in epidemics since HIV/AIDS, a very controversial epidemic. He has advised 5 presidents, starting with Reagan and has been dealing with politicians for almost 40 years, plus speaking publicly to all of us. He states the facts, and gives his honest objective opinion, like an appraiser. Fauci is a very believable person who admits his mistakes and feels similar to someone you may want to have as a good friend.

When I saw this interview I had been working on my August big article on COVID and appraisers for a few weeks. I was depressed and discouraged about the recent surge in cases. Watching this interview gave me hope!! I really wish he spoke to us more often. We need him.

How Fauci says the U.S. can get control of the pandemic

Dr. Anthony Fauci – July 17, 18:44 minute interview

A few quotes:

” I believe that, if we hold together as a country, and we do the things that I have been talking about in this interview with you, that we can get our arms around this, and we can turn it around. I’m convinced of that.”

“If you look at the history… we have gone from the sequence of the virus to a vaccine development program in days. We went from that, 62 days later, to get a phase one trial going. ”

“And that is — and I will repeat it — that, by the end of this calendar year and the beginning of 2021, I feel optimistic. Nobody guarantees, but I feel optimistic that we will have a vaccine, one or more, that we can start distributing to people…”

To listen to the interview, Click here.

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What we know about the search for a COVID-19 vaccine — and what we don’t.

Miles O’Brien July 22. 7:38 minute interview

Interview with Miles O’Brien, a veteran, independent journalist who focuses on science, technology and aerospace. He regularly writes about COVID-19.

Very good, short overview of important vaccine issues.

A quote:

Here we are, about six months since the Chinese published the genetic code of the SARS-CoV-2 virus, the novel coronavirus, and, currently, there are about 140 vaccine ideas, not in human trials, and about two dozen in the midst of human trials.

Now, yesterday on Capitol Hill, representatives of three of the big pharma companies testified before Congress and indicated they are prepared to begin mass testing on humans to see if these vaccines are effective by the end of the year.

And I can tell you, no one would have predicted this six months ago…

To listen to the interview, Click here. 

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5 Lessons Learned About Giving and Business

By Michael Perry

Excerpt: In March of 2020, amid widespread business closures and economic turmoil, I decided to take action to help my community. By using the same principals we all must practice to run a successful business, I was able to turn fifty dollars into fifteen thousand dollars in just eight weeks for others in need.

This was done through a gift card raffle campaign in which I purchased $50 worth of gift cards from locally-owned small businesses and raffled them off to community members, then used those proceeds to purchase more gift cards, and so on. During this process, I learned many lessons about giving and the running of a business.

To read more, click here

My comment: Great to read about an appraiser giving back!!

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Freddie Mac Identifies 1.4 Million ADUs

Excerpt: Using the 1997-2019 Multiple Listing Service (MLS) transactions data, new Freddie Mac’s study identified 1.4 million properties with Accessory Dwelling Units (ADUs) in the United States. The study showed that first-time listings with ADUs grew most rapidly during the last decade, averaging 8.6% per year. The expansion of listings with ADUs was fastest in high-cost fast-growing areas in the South and West regions.

Since ADUs are legally part of the same property as the main house, the Census and most other government housing surveys fail to identify them. In places, where construction of ADUs is now legalized, building permit data can serve as a good proxy for the number of new legally built ADUs but do not capture unauthorized units coming to the market illegally. As a clever alternative, the Freddie Mac team analyzed over 600 million MLS transactions going back to 1997 and identified listings mentioning ADUs for the first time, thus estimating monthly additions to the national ADU inventory.

Good writeup with data and a graph plus link to Freddie’s original information.

To read more, click here

My comment: Very creative research! In my city, we have lots of these types of living units, built in the past, mostly illegal, of course. ADUs can be expensive and a hassle to build, but local regulations have been loosening. People I know build them to retire in themselves and rent their big house, or as a place for older parents or other relatives to live. Some are looking for additional income.
Excerpt: Graphs for analysts and appraisers are how we see. It is difficult to vision a median or clusters or market relationships using just numbers. It is even blurrier when someone uses p-values, R-squared’s, and t-scores, claiming these somehow ‘support’ their personal opinion of value. Bad enough in regular work. Even worse gobbledygook when used as ‘evidence’ in litigation ‘expert’ witness practice.

For valuation and asset assessment, data visualization is important to communicate results. But there is more, much more. Visualization using graphs is the only real way to see markets.

It is easy to forget that what appraisers do is measure markets. The only real purpose of comparables is to estimate markets. Once selected, comparables also become an easy way to ‘support’ an opinion. It is circular thinking, but it works where data is sparse or difficult to collect…

To read more, click here

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Excerpt: Graphs for analysts and appraisers are how we see. It is difficult to vision a median or clusters or market relationships using just numbers. It is even blurrier when someone uses p-values, R-squared’s, and t-scores, claiming these somehow ‘support’ their personal opinion of value. Bad enough in regular work. Even worse gobbledygook when used as ‘evidence’ in litigation ‘expert’ witness practice.
For valuation and asset assessment, data visualization is important to communicate results. But there is more, much more. Visualization using graphs is the only real way to see markets.
It is easy to forget that what appraisers do is measure markets. The only real purpose of comparables is to estimate markets. Once selected, comparables also become an easy way to ‘support’ an opinion. It is circular thinking, but it works where data is sparse or difficult to collect…
To read more, click here

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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 4.1 percent from one week earlier,

WASHINGTON, D.C. (July 22, 2020) – Mortgage applications increased 4.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 17, 2020.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 4 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week and was 122 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 2 percent compared with the previous week and was 19 percent higher than the same week one year ago.

“Mortgage applications increased last week despite mixed results from the various rates tracked in MBA’s survey. The average 30-year fixed rate mortgage rose slightly to 3.20 percent, but some creditworthy borrowers are being offered rates even below 3 percent. As a result, these low rates drove a 5 percent weekly gain in refinances and a robust 122 percent increase from a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “There continues to be strong homebuyer demand this summer, as home shoppers have returned to the market in many states. Purchase activity increased again last week and was up 19 percent compared to last year – the ninth straight week of year-over-year increases.”

The refinance share of mortgage activity increased to 64.8 percent of total applications from 64.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 3.0 percent of total applications.

The FHA share of total applications decreased to 10.8 percent from 11.1 percent the week prior. The VA share of total applications decreased to 10.8 percent from 11.0 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 ($510,400 or less) increased to 3.20 percent from 3.19 percent, with points increasing to 0.35 from 0.33 (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 $510,400) decreased to 3.51 percent from 3.53 percent, with points remaining unchanged at 0.29 (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 3.13 percent from 3.24 percent, with points remaining unchanged at 0.29 (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 increased to 2.71 percent from 2.70 percent, with points increasing to 0.35 from 0.32 (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 decreased to 2.89 percent from 3.00 percent, with points increasing to 0.12 from 0.02 (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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