Cost to Cure
(Plus very funny handyman video)
Excerpt: On a regular basis, I appraise homes that need some type of repair. It may be as simple as replacing an outlet or as complicated as renovating a home. In the appraisal process, the appraiser has to estimate a cost to cure many types of repairs.
Why do appraisers use the term, cost to “cure” instead of a cost to “fix” a repair? Are appraisers just trying to use fancy vernacular to try and impress the reader of the report?
Appraisers think in terms of value. The term “cure” may make you think of someone who suffers from an illness for which a cure is desired. Appraisal Cost to Cure is very different.
To read more and watch the very funny 3-minute video near the end, click here.
My comments: Written for homeowners. This very good for appraiser marketing. But, there are lots of reminders and maybe some new ideas for appraisers.
The best part: The “Weird Al Yankovic” Handy 3 minute video at the end. Very, very funny. Total Escape!! Just what I needed for the election ;> I have been following Weird Al for decades.
Once Again, Jamie Owen finds the best photos, animated gifs, and videos. Extremely Creative!!
Unfortunately, I cannot insert a video into these emails.
If you don’t have time to read the blog post, to watch the 3-minute video, click here
Click Read More below for the rest of this long blog post!!
NOTE: Please scroll down to read the other sections of this long blog post on One-Mile Myth, Appraisal Foundation, Hobbit House, appraisers sued?, mortgage origination stats, Covid tips for appraisers, etc.
The One-Mile Myth: Vanquished!
It’s a myth that comparable sales used in an appraisal report must be within one mile of the subject property. See how the myth has been vanquished by the Noble Appraiser, who is spreading the word that the best comparables are chosen using facts and data.
To watch the 1 minute, 45-second video click here
To visit Fannie’s appraiser page click here
My comments: The video made me smile ;> Very well done. I’m not sure about the term “Noble Appraiser,” though… Maybe they did extensive research to decide: focus groups, Facebook surveys, someone’s last name, etc.…???
Dave Towne’s reminder: Keep in mind that this only relates to FNMA. Other ‘insurers’ and ‘guarantors,’ plus individual clients may have different requirements for how the distance between the subject and comps is treated. You need to carefully read engagement instructions for every assignment.
The Appraisal Foundation – where’s the money?
Junkets, Petitions, and the Need for Clawbacks with Jeremy Bagott
Appraisal BuzzCast Video
From Interviewer Joan Trice: Jeremy Bagott was a fascinating interview. I’d go so far as to say the most articulate on this given topic – appraisal regulations. Who would expect such an animated interview on the driest of topics? His 2020 book, “Dispatches from the Cosmic Cobra Breeding Farm,” has sounded a clarion call – a throw down if you will. He exhorts appraisers to become activists.
To watch the video, click here
To see all the Buzzcast videos click here
My comments: I wrote about his book and interviewed him for my paid monthly Appraisal Today newsletter article “Why is USPAP copyrighted? Why must buy it every 2 years?” (book review of “Dispatches from the Cosmic Cobra Breeding Farm” on March 1, 2020, issue of the paid Appraisal Today).
He is a Very Dedicated Investigative Reporter!! Jeremy’s focus is on investigating the Appraisal Foundation. He sends me emails about his latest Appraisal Foundation investigations. His book is fascinating. Purchase it at Amazon.
Hobbit Home in Tennessee
Excerpt: Despite the dirt overhead, an underground home in Tennessee still offers plenty of light. For a buyer in search of something different, it’s on the market for $425,000.
“I remember when I pulled into the driveway there, and I was like, ‘What in the world?’” says the listing agent. “It turned out, it’s a really nice house. It’s a unique place and very well thought-out.”
The three-bedroom, three-bathroom home on Forty Forks Road in rural Bethel Springs, TN, features a grass roof that does need regular maintenance.
To read more and see lots of photos, click here
My comment: Fun to see, but extremely hard to appraise!!Getting too many ad-only emails?
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New in the November Issue of Appraisal Today
- Increase your productivity by managing your email
- What is True and Correct per USPAP? By Tim Anderson, MAI
- CamScanner Review By Wayne Pugh, MAI
“When email was created, it was meant to streamline our communication and make it more efficient. And it still can, but more often than not, it morphs into a time-devouring, stress-inducing, legacy-work destroying monster. How can we vanquish the mighty beast that lurks in our inboxes and let peace once more reign throughout the land?”
Does your inbox get too full of emails? Spending too much time looking for them? Want to get to Inbox Zero? One good tip: turn off visual and audible email notifications – very distracting.
What is True and Correct per USPAP? Tim Andersen goes into the details of this issue. He is definitely The USPAP Expert. State Boards look at USPAP, not the value.
Ever used your cell phone to take a photo of a document at the subject property? CamScanner is a cell phone app that can make photos much more useful.
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What is a Studio Apartment?
Excerpt: What gives a studio the signature “studio” feel? The rooms, of course – maybe the room! Everything is found in a single open space: bedroom, living room, and kitchen. There is going to be a separate bathroom and maybe a closet if you’re lucky, but that’s about it.
Some studio apartments feature smaller sections that direct off from the primary living area. This layout is termed as an L-shaped studio or an alcove studio. This section can be made into a bedroom or dining area, especially if you use curtains or privacy dividers to cut off that area from the rest of the studio apartment.
To read more, click here
My comment: I have never lived in a studio apartment but have appraised many apartment properties with studios. This article is written from a tenant’s view, which is very useful for an appraiser. I learned more about them.
Are Appraisers Being Sued for COVID-19 Errors?
By Peter Christensen
Excerpts: Are appraisers being sued for errors relating to the COVID-19 pandemic? My short answer is “no” – there’s no pattern of that happening.
Professional negligence cases against appraisers filed during the pandemic relate more to the financial difficulties that some lenders and borrowers are facing because of the economic and business problems caused by the pandemic.
The alleged errors in appraisals that parties are suing appraisers over during the pandemic are the same types of errors that appraisers usually get sued over.
The article includes two case studies.
To read more, click here
My comment: The Primary Rule: You Can Be Sued by Anyone, Any Time.
COVID-19 Recent posts covidscienceblog.com
Dr. Fauci interview 10-28-20
One of the best Fauci interviews I have ever watched. 30-minute video interview with a timed topic list so you can find what you want to listen to. Topics include: Holidays, Face masks, Vaccines, and Herd Immunity.
To watch, click here
Two new CDC studies on indoor Covid risks
A home is not always safe from Covid-19
CDC is doing a study, over time, of 101 households, starting when the first person was infected.
A 53% household infection rate after one person is infected is higher than what has been documented so far. To date, related research has reported only a 20% to 40% infection rate.
An important finding of this study is that fewer than one-half of household members with confirmed Covid infections reported symptoms at the time infection was first detected.
For appraisers, see my comments below.
To read more, click here
New CDC guidance on accumulating 15 minutes of COVID exposure over time
A study of a correctional officer in a prison. He had multiple very short visits with prisoners. Over time he accumulated virus particles and got Covid.
Specifically, the new guidance suggests that those spending a total of 15 minutes of contact with an infectious person throughout a 24-hour period should be considered in close contact.
For appraisers, going in and out of the home doesn’t help a lot as you can accumulate the risk. Another reason to be very, very careful going inside homes.
To read more, click here
My comments: If crowded in a home or apartment, you need to be very careful. If the residents don’t wear face masks or maintain physical distancing, risk significantly increases. You can increase your PPP level or decline the assignment. Try to find out how many are living in the home.
The upcoming holidays: Crowding without masks is something to consider with family holiday events. Be careful. In my family, we are all having holidays at home with our own household members. We are planning a scheduled zoom with our 6 families.
This holiday season, very high virus risk will only be one time for a few months. Please be careful. The pandemic will be a lower risk in a year due to a vaccine. Plus, hopefully, more people will be using face masks and social distancing to reduce virus transmission.
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 email@example.com . Or call 800-839-0227, MTW 7AM to noon, Pacific time.Mortgage applications increased 3.8 percent from one week earlier
WASHINGTON, D.C. (November 4, 2020) – Mortgage applications increased 3.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 30, 2020.
The Market Composite Index, a measure of mortgage loan application volume, increased 3.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 6 percent from the previous week and was 88 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 25 percent higher than the same week one year ago.
“Mortgage rates continue to hover at record lows this fall. The 30-year fixed mortgage rate remained essentially unchanged at 3.01 percent last week, but rates for 15-year fixed-rate loans, FHA loans, and jumbo loans all fell to new MBA survey lows,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The drop in rates spurred an uptick in demand for refinances. Activity increased over 6 percent, with borrowers notably seeking conventional and government loans. After a solid stretch of purchase applications growth, activity decreased for the fifth time in six weeks but was still over 25 percent higher than a year ago and has increased year-over-year for six straight months. 2020 continues to overall be a strong year for the housing market.”
The refinance share of mortgage activity increased to 68.7 percent of total applications from 66.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 2.1 percent of total applications.
The FHA share of total applications decreased to 11.1 percent from 11.7 percent the week prior. The VA share of total applications increased to 12.2 percent from 11.4 percent the week prior. The USDA share of total applications remained unchanged from 0.5 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 3.01 percent from 3.00 percent, with points increasing to 0.38 from 0.35 (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 3.18 percent from 3.28 percent, with points decreasing to 0.30 from 0.31 (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 3.08 percent from 3.14 percent, with points decreasing to 0.26 from 0.35 (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 2.55 percent from 2.60 percent, with points decreasing to 0.35 from 0.37 (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 2.67 percent from 3.05 percent, with points decreasing to 0.52 from 0.64 (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
1826 Clement Ave. Suite 203 Alameda, CA 94501