CubiCasa and a Desktop Mess – an appraiser’s experience
By Jamie Owen
Excerpts: I called the listing agent on the property I was to appraise and asked if they knew how an appraiser might go about obtaining a floor plan (for my desktop appraisal). She had no idea and had never heard of this type of thing being needed. I was really at a dead end here. I called the bank and explained the situation. They ended up converting the assignment to a traditional type of appraisal so that I could just make the inspection myself.
I called the chief appraiser of the bank that ordered the appraisal. I know him well and have worked together with him on some complex assignments. He said the whole thing is a mess. Some appraisers are submitting reports where they have the listing agent hand-draw the interior walls on copies of the county auditor’s sketch outline. This is also a no-no. Fannie Mae will accept nothing hand-drawn in terms of the sketch…
I decided to test CubiCasa. I downloaded the software to my iPhone 11… I must tell you that I was very impressed! The scan took 15 minutes to do. By the way, I measured the home also. It took about 15 minutes for me to measure the home. But it would have taken a lot longer if I had to add walls and doors!
In less than a day, the sketch was sent to me via email, and it was awesome! It was professional-looking and had all the data that I needed. Its measurements were within 15 square feet of mine on a home that was just over 2,400 square feet. It also broke down the square footage of each floor and the dimensions of each room and its gross living area calculations.
I have been using it and then comparing my measurements with its measurements. It is consistently within 1-3% of my measurements. The 3% variance is with larger homes with complex angles and tricky areas to measure. In my view, that’s pretty good!
To read more and see a fun video and animated gifs, click here
My comments: Desktop appraisals are a new type of assignment for appraisers. I wrote about CubiCasa and Desktops in recent newsletters. I tested it and spoke with knowledgeable people. I am using it. No more exterior measurements!
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NOTE: Please scroll down to read the other topics in this long blog post on Retirement, real estate market changes, ANSI, Appraising luxury homes, unusual homes, mortgage origination stats, etc.
5 Mansions Priced Under $ Million
5 Main St, Richmond, ME – Photo above
Built around 1870, the 7,508-square-foot mansion has been restored multiple times over the decades. Most recently, it was converted into the Southard House Museum, complete with an observation room in the top-level turret. That spot affords you views of the Kennebec Bridge, Swan Island, Kennebec River, and downtown Main Street.
It could be used as a multifamily home, a vacation rental, or a bed-and-breakfast. The carriage house on the property offers flexible space for an office, gym, storage space, or garage.
There are nine bedrooms and six bathrooms in the mansion and a half-bath in the carriage house. In addition, you’ll find four kitchens, paved parking, and a studio apartment.
The other mansions are in Indiana, Washington, Maine, and Minnesota
For lots of photos in this listing, click here.
To read about the other four houses, click here.
My comments: Too much maintenance! What does $1,000,000 buy where you live? In my area, not much, with the median price at $1,300,000 and few listings under $1,000,000.
4 Top Reasons to Become a Luxury Home Appraiser
Excerpts: A “luxury” home is not so much about price tag as it is about quality and customization. At its core, it’s any home that is a step above typical or even high-end traditional homes in the area. So, you don’t have to live in an area full of sprawling mansions and multi-million-dollar homes to become a luxury home appraiser. There are many reasons why appraising luxury homes is recommended for real estate appraisers. The following are just some of the top reasons.
1. The luxury market is stable
Unlike the traditional real estate market, the upper-tier real estate market tends to be less influenced by economic fluctuations, providing insulation that the traditional market just doesn’t have. As wealth is transferred from generation to generation and Millennials start to accumulate assets and purchase property, it is very likely the luxury real estate market will continue to see positive growth for years to come.
To read three more reasons: click here
My comments: Is your lender business slowing down? Thinking about diversifying? I know appraisers who have specialized in this market for many years. They work for lenders/AMCs and are on special lists. They have few competitors, as most appraisers “just say no.” Fees are much higher than for other home appraisals, of course.Getting too many ad-only emails?
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Retirement: To Stay or Not to Stay
That is the question!
For many who retire, something happens, causing you to decide.
– Hate appraising and don’t think it will change.
– Spouse retires
– Health problems
– Influence of family and friends who have successfully retired
– Children graduate from college
– It’s the right time: finances are in good shape and emotionally ready for the changes that retirement will bring
Doing appraisals after you give up your state license
This is usually the “trigger” for retiring from appraising is giving up your license. I don’t recommend doing this unless you are sure you will never want to appraise again; even an occasional non-lender appraisal is an easy way to increase your retirement income if needed.
In most states, you renew every two years and must decide then. Fortunately, there is a more extended period before deciding.
You can appraise without a license in many states (non-mandatory), including California, but it isn’t easy and isn’t easy to get work. No lender work and many other clients want to know if you are licensed. When licensing first started, I knew appraisers who did not get licensed because they had never worked for lenders. They had to get licensed because their clients wanted it, particularly attorneys.
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The housing market has shifted
May 11, By Ryan Lundquist
Excerpt: How I’m describing the market: Overall, the market still feels elevated in that we are seeing a higher-than-normal amount of competition. And frankly, sellers are still in the driver’s seat. Yet, there is no mistaking a blatant temperature change or shift about a month ago. It seems an inflection point occurred where we really noticed the effect of higher mortgage rates on buyers. Some buyers have backed off due to declining affordability, and others have become much more sensitive to price.
In other words, buyers are hyper aware of lofty monthly mortgage payments, so they have higher expectations about what they’re buying. It would be an error to call this market cold, but there is no mistaking a cooler temperature from the scalding temperature of January through March.
Fewer pending contracts (big news): We’ve seen a dip in pending contracts over the past few weeks, which speaks to shifting demand. The number of pendings was down 12% this April compared to last year. Where will this black line go in the coming time? That’s the big question. Will buyers adapt to a new environment of higher rates, or will we continue to see fewer buyers playing the market?
To read more click here
My comments: Read the blog comments to see what is happening in other parts of the country. What’s happening in your market? Don’t miss the downturn which is coming. You MUST go beyond the comps, which are always the past, not the present or future. Ryan has lots of useful graphs in this article you can use for ideas in your analysis.
Navigating Stairs with ANSI: Don’t Fall Down
Excerpt: When do stairs need special attention?
The only time stairways become an issue requiring special attention is when the stair opening is larger than the stairs themselves. For example, if a stair opening between the first and second floors is 10 feet by 10 feet, and the stairway (which fills part of this opening) is 3 feet by 8 feet, then the appraiser would subtract the opening (100 square feet) and add back in the stairs (24 square feet) to the second-floor level.
To read more, click here
My comments: Not all appraisers are following ANSI, which is only required for loans being sold to Fannie for now. I have not heard of any appraisal revision requests. Fannie is waiting a while I guess to start revisions requests. They are concentrating now on trying to get appraisers to do desktops. Getting Fannie’s required Desktop information is not always possible, such as a floor plan and sketch, so they are sometmimese upgraded to full appraisals. Then you can use CubiCasa for a floor plan and square footage. My February and March 2022 newsletters had lots of information on ANSI. The May issue reviewed CubiCasa and Desktops.
The Pavilion in La Jolla, California
Excerpt: In 1960 Sam Bell heir to General Mills (Bell Potato Chips) purchased a summer home with a spectacular view of the Pacific Ocean. His property extended down a 300 foot cliff to the mean high tide line of the surf below. His beach is isolated 4 miles from public access to the North, and is accessible only at low tide through rugged, slippery rocks from the south, and remains unused and out of sight. Only surfers, 100 yards away, can see the mushroom shape of the guest retreat.
Faced with the extraordinary challenge of developing access to the beach and guest retreat the owner assembled a design team to innovate. Elevator Electric Co. designer and builder of the 1st glass elevator in San Diego designed and constructed the 300 foot tramway. Because of the unusual nature of the project, workmen walked off of the job, requiring the three owners of the tram company to install the last 100 feet of the tramway railing with help from Jack Schultz..
To read more and see more fotos, click here
My comments: Wow! For almost 30 years, I lived in homes on the water with boat docks (level lots) on tidal estuaries of San Francisco Bay. Being on the water is way better than above the water. Looking down is not the same!
ANSI Z765-2021 Resources Web Page at www.appraisaltoday.com/ANSI
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.
My comments: Rates are going up. The number of appraisals is driven by refis. Make money while you can!!
Mortgage applications decreased 11.0 percent from one week earlier
Mortgage applications decreased 11.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 13, 2022.
The Market Composite Index, a measure of mortgage loan application volume, decreased 11.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 11 percent compared with the previous week. The Refinance Index decreased 10 percent from the previous week and was 76 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 12 percent from one week earlier. The unadjusted Purchase Index decreased 12 percent compared with the previous week and was 15 percent lower than the same week one year ago.
“Mortgage applications decreased for the first time in three weeks, as mortgage rates – despite declining last week – remained over two percentage points higher than a year ago and close to the highest levels since 2009. For borrowers looking to refinance, the current level of rates continues to be a significant disincentive,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications fell 12 percent last week, as prospective homebuyers have been put off by higher rates and worsening affordability conditions. Furthermore, general uncertainty about the near-term economic outlook, as well as recent stock market volatility, may be causing some households to delay their home search.”
Added Kan, “These results were consistent with MBA’s May forecast released earlier this week, which now calls for fewer home sales and mortgage originations in 2022 compared to a year ago.”
The refinance share of mortgage activity increased to 33.0 percent of total applications from 32.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 10.3 percent of total applications.
The FHA share of total applications increased to 11.1 percent from 10.5 percent the week prior. The VA share of total applications remained unchanged at 10.5 percent. The USDA share of total applications remained unchanged at 0.5 percent.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.49 percent from 5.53 percent, with points increasing to 0.74 from 0.73 (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 $647,200) decreased to 5.03 percent from 5.08 percent, with points increasing to 0.61 from 0.42 (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 decreased to 4.73 percent from 4.79 percent, with points increasing to 0.82 from 0.80 (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 4.42 percent from 4.47 percent, with points remained unchanged at 0.73 (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