1-6-23 NEWSLETTER
Appraisers Share Their Top Professional Goals for 2023
By: McKissock (Survey)
Excerpts:
- Maintain my current business (26%)
- Earn a designation or certification (16%)
- Grow my business (15%)
- Prepare for retirement (12%)
“I would like to turn over my appraisal business to my daughter, who is certified.”
Should have retired last year but put it off due to the high amount of requests!”
After 23 years in appraising, which was very beneficial for me and my customers, I’m preparing for retirement.”
- Achieve a better work-life balance (10%)
- Other (6%)
To read more, including personal comments from appraisers, click here.
My comments: The post has links to some topics above with many tips. I have recently been writing about many of these topics since the market changed.
I write about non-lender work, staying up when business is down, retirement planning, and more in my monthly newsletter. I will be writing soon about upgrading to Certified General. I have always done both commercial and residential. My business has been much more stable as I can shift between them when the appraisal markets change, especially fees.
What are you planning to do in 2023? Now is the time to learn all the features in your MLS and forms software, upgrade your skills by taking seminars and classes, and more.
The future of residential appraising
Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!
To read more of this long blog post with many topics, click Read More Below!!
NOTE: Please scroll down to read the other topics in this long blog post on USPAP and non-traditional appraisals, Non-lender appraisals, reos, tear downs, unusual homes, mortgage origination stats, etc.
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Appraiser with brain cancer needs our help!
Kevin McDonald is a New Jersey appraiser diagnosed with brain cancer in December. A friend said he was “acting funny” and suggested he go to the Emergency Room. Kevin was diagnosed with advanced brain cancer and had a 5-hour surgery very soon.
He will have six weeks of radiation and cannot work for over three months. Kevin will have chemotherapy for a year, on and off.
Like many of us, Kevin is self-employed and had little appraisal business in 2022. Even his 4-county VA appraisals dropped to just a few.
This could happen to any of us. My sister had Stage 4 Breast Cancer and survived but had to quit working. Everyone I have spoken with who has cancer chemotherapy said: Very Bad!
No one knows how the chemo will affect Kevin. There will be medical bills and lost income. It would be greatly appreciated if you could help defray the costs and give him some peace of mind during his time of need.
Click here to go to his Go Fund Me page: https://gofund.me/078fe14e
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I live in an airplane in the woods for $370/month — take a look inside
Very good video, the best I have seen on airplane living.
To watch the video, click here
Excerpts: Bruce Campbell, 73, lives in a Boeing 727 200-passenger jetliner that is 1,066 square feet and weighs around 70,000 pounds. He bought the plane for $100,000 in 1999 and spends $370/month on property taxes and electricity.
It all started when Campbell was 15 years old, and he saw an airplane salvage yard on TV. For some reason, he decided that he wanted to live in one when he grew up. So around the turn of the 21st century, he decided to work on making his dream come true. He just didn’t know how to exactly go about it. He already had the land, having purchased 10 acres in a suburb outside of Portland, Oregon, for $25,800. He just needed a plane to put on it.
To read lots more and see photos, click here
My comments: I have read about many converted airliners, but this one has lots of details, great photos, and an excellent video with personal comments from the owner!USPAP and Non-Traditional Appraisals – Tim Andersen, MAI 8.5 minute Podcast
Excerpts: Is it time to expand and diversity your appraisal business? USPAP and non-traditional appraisals may be just the proper answer you’ve been looking for! In this podcast we do not discuss hybrid or desktop appraisals. We’ve already done that.
Instead, in this podcast we consider expanding and diversifying your business by accepting assignments from other than traditional lenders, evil AMCs and the GSEs. This is because there is another universe of appraisal out there. It has the generic term “private work”.
But it means appraisal work for other than refinancing an existing mortgage or applying for a first mortgage loan to purchase a house. And what’s wonderful is that we can do these private appraisals, too.
To read more and listen to the podcast, click here
My comments: Tim is my Go-To Appraiser Expert for USPAP questions when writing about non-lender appraisals. He specializes in USPAP writing, teaching, podcasts, and helping appraisers stay out of trouble in his consulting business.4 ways to get only the FREE email newsletters
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In the January 2023 issue of Appraisal Today
Get started in attorney work by doing divorce appraisals – significantly higher fees, no UAD, no underwriters, no AMCs
There is a lot of divorce work available for residential appraisers. Often commercial appraisers appraise homes, but lack the expertise you have by specializing in residential appraisal work.
You won’t be competing with desperate lender appraisers who bid $450 (or less), when the typical divorce appraisal fee is $1,000 minimum plus $250 to $250 per hour (or more) for testimony, etc., depending on your local market. Find out what other appraisers charge. You can ask appraisers you know or a local instructor.
What type of reporting format to use – NO Fannie forms
Do NOT use any Fannie Mae forms. The primary problem with using the form is the adjustment grid.
Your forms appraisal software has many non-lender forms available.
Consider using relatively short narrative reports. I always use narrative reports if court testimony may be required.
How many of your adjustments are “fully supported”?
Attorneys can attack adjustments on the grid in forms intended for mortgage lender work.
Most appraisers use short narrative reports or GPAR forms. You select the pages to use. Your software vendor has many other non-lender forms.
I only put dollar adjustments in my appraisals if it is critical to the valuation, such as a view. I quit making any dollar adjustments in my lender appraisals many years ago after my state regulator said they were required.
I have done many divorce appraisals, including expert witness and depositions.
To read much more about this topic, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.
If this article helped you understand how to do divorce appraisals, it is worth the subscription price!
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If you have any comments or info on any topics, please hit the reply button!! I’m always looking for something new ;>
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Nine Percent of new homes are teardowns
Excerpts: There is a moderate amount of geographic variation in the share of teardown/rebuilds. See graphic above.
In 2021, 9.1 percent of new single-family homes were built in an older neighborhood on a site where a previous structure had to be torn down and rebuilt, according to the latest Builder Practices Survey (BPS) conducted by Home Innovation Research Labs. Another 18.5 percent were built on an infill lot in an older neighborhood. The BPS places new homes built in one of four development categories.
In addition to “teardown” and “infill,” the categories include “new residential development” and ”not in a residential development.” New homes built not in a residential development in the BPS correspond roughly to the Census Bureau’s contractor-built custom homes, built one-at-a time on the home owner’s lot. Homes built in a new residential development are by far the most common type.
To read more and see the excellent graphics, click here
My comments: Worth reading. Lots of data analysis and good graphics.
Many residential appraisers get into trouble when they don’t recognize that homes are being torn down to build larger new homes near the subject. Why? The subject’s current home may not be the highest and best use. Maybe it should be land value plus demo cost.
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Are foreclosures and short sales coming back to the housing market?
December 19, 2022 By Ryan Lundquist
Excerpts: A foreclosure wave is coming!!! And short sales are about to be unleashed!!! That’s often the housing narrative, and let’s talk about that while looking at some changes we’re starting to see in the Sacramento market.
There is no longer a foreclosure moratorium in California, so we should see more foreclosures ahead. We should see more short sales too since a sharp change in prices lately will mean some people who bought over the past year especially will start to owe more on their mortgage than the house is worth. I realize this can bring up lots of PTSD from the last housing bubble, and the inclination is to say we’re on the cusp of The Big Short 2.0 (classic movie). But having more distressed sales ahead doesn’t automatically mean there will be a distressed property avalanche like last time. The truth is it’s impossible to predict how many distressed sales we will see, but right now delinquencies are low…
In all of 2022 there have only been ten short sales in the Sacramento region, but there are now 19 short sale listings. Some of these short sales are clearly due to market conditions (prices dropping), but others are personal circumstances. In other words, it’s not just one thing.
To read more, click here
My comments: Scroll down the page to see Ryan’s analysis and graphs. How can you use this to analyze your market(s).
Appraisers who went through it will never forget the 2008 housing crash with waves of foreclosures and short sales. The current market is different. But markets vary widely around the country. What is happening in your market? Neighborhoods and price ranges can vary a lot in a city. Don’t miss the signs of a crash!
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Louisiana Castle for Sale for $1.1M Comes With Drawbridge Door
Excerpts: Father wanted his son to grow up in a castle, so he built one. Now the 5,000-square-foot castle in Covington, LA, is for sale for $1,150,000. Completed in 2017, the three-bed, two-bath castle sits on a parcel of 8 acres.
“The owner built it with his own two hands. He’s a construction guy, and it’s a legitimate castle with lots of features that are medieval in nature, but it’s a newer construction property,” says listing agent Will Frederick, with Keller Williams Realty Services.
It’s got turrets like an actual castle does and the battlements and flagstone floors throughout. The front door is a reverse drawbridge that lifts up when you walk into it,” Frederick says. “It used to have a moat out front, which was a fun little addition. But he filled it in, so it is no longer there.”
To read more and see many interesting photos, click here
My comments: I have no idea why so many homeowners are building new castle homes or renovating them all over the country! Several websites only have castle homes.
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I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample go to www.appraisaltoday.com/order Or call 510-865-8041, MTW 7 AM to noon, Pacific time.
My comments: Rates are going up. Some appraisers are very busy, and others have little work. Varies widely around the country.
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Mortgage applications decreased 13.2 percent from two weeks earlier,
Mortgage applications decreased 13.2 percent from two weeks earlier ,according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 30, 2022. The results include adjustments to account for the holidays.
The Market Composite Index, a measure of mortgage loan application volume, decreased 13.2 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 39.4 percent compared with the two weeks ago. The holiday adjusted Refinance Index decreased 16.3 percent from the two weeks ago and was 87 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 12.2 percent from two weeks earlier. The unadjusted Purchase Index decreased 38.5 percent compared with the two weeks ago and was 42 percent lower than the same week one year ago.
“The end of the year is typically a slower time for the housing market, and with mortgage rates still well above 6 percent and the threat of a recession looming, mortgage applications continued to decline over the past two weeks to the lowest level since 1996,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications have been impacted by slowing home sales in both the new and existing segments of the market. Even as home-price growth slows in many parts of the country, elevated mortgage rates continue to put a strain on affordability and are keeping prospective homebuyers out of the market.”
Added Kan, “Refinance applications remain less than a third of the market and were 87 percent lower than a year ago as rates remained close to double what they were in 2021. Mortgage rates are lower than October 2022 highs, but would have to decline substantially to generate additional refinance activity.”
While the index changes were calculated relative to two weeks prior, the following compositional and rate measures are presented relative to the previous week only.
The refinance share of mortgage activity increased to 30.3 percent of total applications from 28.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.3 percent of total applications.
The FHA share of total applications increased to 14.0 percent from 13.1 percent the week prior. The VA share of total applications increased to 13.4 percent from 12.0 percent the week prior. The USDA share of total applications remained unchanged at 0.6 percent.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.58 percent from 6.42 percent, with points increasing to 0.73 from0.65 (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 $647,200)remained at 6.12 percent, with points increasing to 0.45 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.45 percent from 6.41 percent, with points increasing to 1.24 from 1.13 (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 increased to 6.06 percent from 5.97 percent, with points increasing to 0.70 from 0.57 (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 increased to 5.61 percent from 5.45 percent, with points decreasing to 0.62 from 0.95 (including the origination fee) for 80 percent LTV loans. The effective rate increased 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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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
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