Pulling comps from the other side of the freeway
By Ryan Lundquist
Excerpts: It can be a REALLY bad idea to pull comps from the other side of the freeway, but not always. Today I have some thoughts about location, comp selection, and lenders freaking out when schools are mentioned in appraisal reports.
I don’t normally pull comps across a highway
In so many cases it’s an awful idea to cross a major road or highway to pull comps because a highway sometimes separates markets that are far different in age, square footage, lot size, architecture, price point, school district, etc….
But, crossing the highway does work here
With that said, I want to show you an example of a local neighborhood where I have zero hesitation about pulling comps from both sides of the highway. The areas north and south of Highway 50 below represent the College-Glen area…
Why it’s no biggie to pull comps like this
A) Prices are similar: Prices are similar on each side of the highway. I’ve found this when pulling comps through the years, and I’ve also shown this when making graphs. I will say the north side tends to have a slightly larger square footage than the south side (same with west vs east), which is something to consider when we compare stats. But it’s still not a major difference.
B) Buyer Behavior …
C) School System …
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NOTE: Please scroll down to read the other topics in this long blog post on time saving tips, Waivers, Non-lender appraisals, Tax savings, unusual homes, mortgage origination stats, etc.
Large beach front home in Milton, Delaware for $2,588,170
4 bedrooms, 3.5+ baths, 2,991 square feet, 0.34 Acre lot.
The fully furnished contemporary home has ocean views from nearly every room, and its price was recently reduced by $100,000.
The four-bedroom home was built in 2019 in the gated neighborhood of Back Bay Cove. It comes with a mile of private deeded beach.
The 2,991-square-foot interior features floor-to-ceiling windows that overlook the National Prime Hook Wildlife Refuge. Other highlights include a 150-bottle wine closet, two outdoor showers, a hot tub, and an interior grilling room.
The location is just a short drive to shops, a golf course, and Rehoboth Beach.
To see a virtual tour and 50 photos Click Here
Best Time-Saving Tips for Real Estate Appraisers
Excerpts: If you operate as an independent real estate appraiser, you know that time is money. Are you looking for new ways to improve your efficiency? As part of our monthly survey series, we asked our community of real estate appraisers, “What’s the BEST way to save time in your workweek?” The number one recommendation, by far, was to use technology to your advantage.
Use technology to your advantage (45%)
“Streamlining processes with technology is a big time saver!”
“Use sketch app, laser device for measuring.”
“Technology allows some aspects of developing appraisal reports to go much faster. It is easier to streamline and automate certain parts of my reports thanks to the technology available.”
“I think for us old timers we have a hard time trying things new and there are many new things out there that not only improve our reports but help us efficiently run our daily operations. It’s hard sometimes keeping up with all the changes, but we need to grasp it as our industry is ever evolving.”
– Reduce revision requests by writing more detailed reports (23%)
– Take comp photos at the same time as the inspection (14%)
– Reserve one office-only day with no appointments (8%)
To read lots more plus appraiser comments, Click Here
My comments: Business is slow now for most appraisers. Now is the time to look at these time saving ideas, especially technology.
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2023 Year-end tax planning for appraisers.
You can still save on your 2023 taxes!
In the December 1 issue of Appraisal Today.
If your business is slow, saving on taxes is even more critical than when you are busy. Every Dollar Counts!!
Your most important tax decision now is if you expect your total taxable income (personal and business) in 2023 to go up, be stable, or go down from 2022.
If you expect your taxable income to be lower next year, make as many purchases, donations, etc., before year-end. Also, defer 2023 income until 2024, such as delayed billing.
If you expect your 2024 income to be higher than 2023, consider deferring purchases, donations, etc., as you will need them more in 2024.
If you expect no change in income for the next year or are unsure, you can make some year-end purchases and other deductions.
How to maximize deductible expenses by timing payments
Pay as many bills as you can by the end of the year, such as property taxes, software maintenance agreements, etc. I do this every year.
Credit card payments for charitable donations made by December 31 are deductible. Then, pay it off when you receive your credit card statement. I do this every year. I keep good records of all my deductions to Goodwill, including receipts and photos of personal and business items.
Clean out your closets and contribute your unwanted items to a charity for a deduction. Be sure to get a receipt for all donations and contributions, regardless of the amount. Photos can also work well for verifying your donations.
Keep an accurate mileage log.
The IRS targets business mileage. I could not obtain any statistics, but I am sure many small businesses, including appraisal, may need more accurate business mileage records. Always record your mileage at the beginning of the year. Try to schedule maintenance or repair close to the start of the year so you have a receipt with a record of your mileage at that time. If your records still need to be completed, now do it for 2022 using the appraisal addresses you appraised and drove by.
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Prevalence of GSE Appraisal Waivers (and other types of alternatives for mortgage loans)
September 2023 AEI (American Enterprise Institute)
Excerpts: Key Points:
• The share of appraisal waivers for both GSEs combined for September 2023 stood at 13%, up 0.3 ppts. from last month but down 36 ppts. from its series’ peak in March 2021. In August 2023, shares for Fannie and Freddie converged for the first time since June 2021 and have moved in lock step since then.
• Freddie introduced ACE+PDR* in July 2022. In September 2023, these shares stood at 7.9% and 3.5% for Cash-Out and No Cash-Out loans, respectively. Purchase loans had a minimal uptake of ACE+PDR.
• Fannie introduced Value Acceptance + Property Data (VA+PD)** in April 2023. In September 2023, the share of the new program was 6.9% and 3.5% for Cash-Out and No Cash-Out loans, respectively. For purchase loans, the uptake of VA+PD was 1.2%.
• The introduction of both programs subsequently reduced waiver shares, but the data show that both programs have not picked up the entire slack, suggesting further policy changes and/or slow
To see the full report with graphs and tables, Click Here and scroll down to the current report link.
To subscribe to the AEI Reports, Click Here
My comments: Check out the graphs and tables! I have subscribed to their email notices for this research for a long time. Waivers are being replaced by Waiver plus Property Data Collectors. 84.8% of loans had appraisals.
FREE Private Appraisal Tips on Zoom on December 8 at 11 AM PST by Ryan Lundquist
Ryan’s recent email (direct quote)
Appraiser friends, I’m going to do a private work Q&A thingy on December 8th at 11am PST. My goal is to encourage and give some ideas for putting yourself out there to get private work. I’ll go through a presentation, and then we’ll do Q&A.
One hour or more if needed. This is free. I’m not selling anything. Here is the Link to the Zoom (Meeting ID: 832 2414 3890 Passcode: 007).
ONLY for appraisers. This will not be recorded, so be there live if you’re interested.
For the link to the Zoom presentation Click Here
Full link if Click Here above does not work. Copy and paste.
My comments: Only 300 appraiser capacity in the Zoom room, so don’t be late. Many thanks to Ryan for this FREE Zoom session. See You There!!
Here’s a chance to own a piece of the Pullman-Standard history.
With a Western-themed interior, the former train car now offers three bedrooms in a 900 square feet of living space. The passenger coach, which was initially built in 1925, was refurbished and “mechanically overhauled” in 1998.
Enter into the Observation Room, then make your way along the hallway past the bedrooms to the Dining Room. All rooms feature Western accents including antler light fixtures, custom decorative window shades, cattle brand adorned woodwork, and many other features.
The possible uses for the TCRY 106 are plentiful, whether as a unique residence, vacation rental, tourist attraction or whatever would suit its new location.
To see the listing with 23 photos, including interiors, Click Here
My comments: I have seen airplanes and boats on land as homes but relatively few train coaches! Highest and Best Use, mobile home financing, personal property, move to another location?? I love traveling overnight on trains and have been up and down the West Coast, seeing places no one can see from the land. Fascinating! I also traveled partway across the country and made several trips from where I live to Reno, NV.
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, Click Here.
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 go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.
My comments: Rates are going up and down. Many appraisers are not busy. Some are busy, usually with non-lender appraisals.
Mortgage applications increased 0.3 percent from one week earlier
WASHINGTON, D.C. (November 29, 2023) — Mortgage applications increased 0.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 24, 2023. This week’s results include an adjustment for the observance of the Thanksgiving holiday.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 33 percent compared with the previous week. The Refinance Index decreased 9 percent from the previous week and was 1 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index decreased 31 percent compared with the previous week and was 19 percent lower than the same week one year ago.
“Mortgage rates decreased for the fourth time in five weeks, with the 30-year fixed rate dipping to 7.37 percent, the lowest level in 10 weeks. There was a slight increase in applications overall, driven by a five percent increase in purchase applications, but refinance applications decreased over the week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Rates have declined more than 50 basis points over the past six weeks, which has helped to spur a small increase in purchase applications, but activity last week was still around 20 percent lower than a year ago. The purchase market remains depressed because of the ongoing, low supply of existing homes on the market. Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”
The refinance share of mortgage activity decreased to 30.6 percent of total applications from 32.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.1 percent of total applications.
The FHA share of total applications decreased to 13.5 percent from 14.8 percent the week prior. The VA share of total applications increased to 12.6 percent from 11.3 percent the week prior. The USDA share of total applications increased to 0.5 percent from 0.4 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.37 percent from 7.41 percent, with points increasing to 0.64 from 0.62 (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 $726,200) increased to 7.54 percent from 7.51 percent, with points unchanged at 0.62 (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 decreased to 7.18 percent from 7.19 percent, with points increasing to 0.81 from 0.79 (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 6.88 percent from 6.89 percent, with points decreasing to 0.52 from 0.76 (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 6.59 percent from 6.76 percent, with points decreasing to 0.76 from 0.82 (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