How to Account for a Superadequacy
By: McKissock
Excerpts: What is superadequacy?
Per The Dictionary of Real Estate Appraisal, 6th Ed., superadequacy is defined as “an excess in the capacity or quality of a structure or structural component; determined by market standards.” It’s a type of functional obsolescence in which the structure or one of its components is overly improved to a capacity or quality than a prudent buyer or owner would build or pay.
While we provide more detailed illustrations below, a simple example would be a 5,000 square foot luxury home built in a neighborhood comprised of two and three-bedroom mid-century ranch homes.
Example #1: Superadequate custom fireplace
Example #2: Superadequate 12-car garage
To read more, Click Here
My comments: Although the blog post references luxury homes, this can occur anywhere. Have you ever driven closer and closer to your subject and noticed that the homes are much smaller or have standard designs? You keep getting closer, hoping it is not your subject. It Is! This definitely has happened to me. Large unusual additions, two large kitchens, very extensive landscaping, etc.
Maybe you were busy and forgot to check it out in public records, MLS or speaking with the owner or agent (if a sale) when scheduling the appointment.
Market Your Appraisal Services: 59 Ways to Get More Business Now
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NOTE: Please scroll down to read the other topics in this long blog post on answering your phone, appraiser censorship, bias, how to do graphs, unusual homes, mortgage origination stats, etc.
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12 Days of Appraiser Christmas
Very funny!! 3.5 minute video
Note on video: opens in youtube.com
Here are two of the days: 8 mega mansions, 5 REOs
Many thanks to Gary F. Kristensen, SRA, ASA, AGA at A Quality Appraisals in Portland, Oregon.
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More appraiser censorship
By Bruce Hahn, CCIM, MAI, SRA
Excerpts: More appraisal censorship is here! Have you noticed this new regulation that censors California appraisers and flat out appears to prohibit accepted sound appraisal methodology and practice?
For instance, if you are appraising a day care center licensed for pre-school children between the ages of 2-5 years old, you may not consider age in your analysis of the real estate. Even though a review of US Census data showing how many 2 to 5-year-old children are located within the subject market trade area, as well as for each of the comparable data points, are highly relevant and should be analyzed!
Appraisal methodology for single family residences analyzes a market to determine base employment and overall employment trends. Does that constitute employment status as described above?? Hard to determine as the language is very broad and not very specific.
What is happening in your state?
To read more, Click Here
My comments: I read yesterday about proposed draconian appraiser regulations in New Jersey “N.J. Senate approves penalties for discriminatory real estate appraisals.” Hopefully will not pass! To read the article, Click Here
Yesterday I sent in my 4-year renewal for my California Brokers license, renewing Feb. 23, 2024. $300 ($75 per year) and no CE required as I am over 70, with 30 years of having a broker’s license. I got my license primarily to get MLS access in 1986 when I started my appraisal business. I will never give it up. Very difficult exam and cheap to keep it! Current number of licensees is 202,852.
In dramatic contrast, my 4 year California Certified General $1,030 license renewal is June 23, 2024 ($275.50 per year). Licensees have fallen from about 20,000 in 2006-2007 to under 9,000 now. I expect renewal fees to go up.
Required are: 56 hours of CE with 14 hours of required classes including USPAP, State and Federal Regulations plus two new classes this year (2 hour bias and 1 hour cultural competency). Most required classes have very little new material, are boring, and with little useful information. Appraisers have had discrimination issues in classes and lender guidelines since the 1970s, after redlining finally stopped.
More appraisers are getting tired of this and are adding it to their list of why they are retiring or quitting (plus client hassles and low fees, of course). It makes me less interested in keeping my CA appraisal license but who knows what it will be like in 4 years for my next renewal. Hopefully better. I am an optimist.
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Business Tip – Phone Calls
If They Can’t contact You, They Can’t Give You Any Work!
Your Voicemail Greeting
In my office, we regularly call monthly paid newsletter subscribers about credit card changes and other subscription issues, such as checking to see if they are getting the newsletter. About 50% of the time, we get “joe here” or 511-244-2555 or “leave a message”. The word “appraiser” is never used. The caller often hangs up. You are not perceived as a professional appraiser and experienced business person. I have the same problem when returning phone calls from appraisers wanting advice on a business or appraisal issue.
Answer Your Phone Calls!
If you want more appraisal business, you must answer your phone when someone calls. If you have an office and cell number, for example, be sure your calls are forwarded to your cell when not in your office.
Sometimes prospects have a list of appraisers. If their call goes to voicemail, they hang up and go to the next name.
Answering all calls, including those that look like telemarketing is good. You may consider trying those identified as spam by your phones.
If you are out of town or trying to get appraisals done in your office, you can use an answering service. I used a local one for many years.
I communicate with friends and family mostly by text but seldom use text for business purposes. Businesses run on email and phones.
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How to make Ryan Lundquist’s graphs in Excel
A good free way to upgrade your appraisal skills!
Excerpts:
How to use the spreadsheet to download neighborhood MLS data (40 minute video)
I made a template to download data from MLS. This can be used in any MLS system as long as you have the capability of setting up a custom export.
THE GOAL
To understand more what is happening in neighborhoods and create visuals for personal use or sharing on social media. This spreadsheet can be used for a ZIP code, county, neighborhood, or even a segment of the market (cash, FHA, under $500K, etc…).
There is a learning curve here, but this is highly doable. It transformed my real estate career when I started getting more visual, and I hope some will have a similar experience. You don’t have to be an Excel nerd to get this either.
And if you don’t want to use my spreadsheet, just learn how to make a custom export so you can start looking at data more specifically in neighborhoods. You can easily export neighborhood data into an Excel file so you can just quickly see whatever you want (maybe similar to my export or other stuff that might be important to you).
To read Ryan’s December 13 blog post and watch the video, Click Here
Scroll down the page to the video
My comments: Details on using the spreadsheet are also in the text below the video on youtube.com, including a transcript, specific steps for downloads and much more.
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America’s Best Ski Towns for Homebuyers and Sellers
Photo Above from Ludsen Mountains, on the North Shore of Lake Superior, a picturesque and historic ski destination. Since the 1880s, Lutsen has evolved from a pioneer settlement into a year-round Midwestern resort community.
Excerpts: or those whose love of the crisp mountain air and snowcapped vistas is matched only by the rush that comes with carving a line through fresh powder, turning that passion into a way of life is a common dream. The key to making it a reality is finding a home to buy in a true ski town.
America’s ski towns often emerged from humble beginnings, many rooted in remote mining operations before mechanized lifts transformed them into high-capacity, thrill-seeking destinations, with vibrant communities that followed—each with a distinct character, but the same love of snow sports.
But recently, living the alpine dream has come with a heftier price tag, as the national housing shortage has deepened and home prices and mortgage rates have shot up. Over the past three years, home list prices in ski towns—already more expensive than the average—have risen faster than the national housing market’s rapid appreciation during COVID-19.
There are still places, though, where it’s possible to live frugally and near a ski resort, although buyers might have to travel a bit farther off the beaten path. The good news: We found these places.
To identify these locations, we aggregated Realtor.com home listings in ski towns over the past three years…
To read about the 15 locations and see an excellent graphic, click here
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Top Appraisers Advise on How to Generate New Business
By Joseph Dobrian
Excerpts: How do the top appraisers market themselves? We interviewed three leaders in the appraisal profession to find out. Keep reading to learn their expert marketing tips and strategies, as well as techniques to get your name out there and make yourself more marketable as an appraiser.
Leaders in the profession agree that having an online presence is essential. So is a network of contacts in all areas of the real estate industry, not just the lending community. The basic idea most in play, nowadays, is that your appraisal skills may have applications in areas you hadn’t thought of.
“Most appraisers are older folks, so they’re not as plugged into the social media side of things as they might be, nor as willing to make changes,” says Falkner. “When I started working here, the only marketing was door to door; I’ve tried to manage our Facebook and LinkedIn accounts. We’ve also started a monthly newsletter that has got pretty good reception.”
“The most important thing an appraiser can do to generate new business outside of AMCs is to have an online presence,” insists Gary F. Kristensen, SRA, ASA, IFA, AGA, appraiser at A Quality Appraisal (Clackamas, Oregon). “That starts with a company website and social media pages that highlight your skills and experience. If you don’t know anything about Search Engine Optimization (SEO), learn or hire someone who does. SEO takes time but pays back for years and years. If you don’t have time for SEO, you can purchase Google ads. If customers can’t find you when they’re searching for an appraiser in your area, you will not get the job.
20 ideas to get your name out there as an appraiser (partial list)
- As a supplement to the expert advice above, here’s a quick list of 20 simple ways to promote your appraisal business:
- Here are a few:
- Get out and talk with people.
- Go to networking events.
- Attend real estate meetings.
- Reach out to colleagues in the appraisal industry. Let them know you’re seeking assignments in a certain appraisal niche (e.g., luxury appraisals, green home appraisals, divorce and estate work, expert witness assignments).
To read more, Click Here
My comments: Read more about what individual appraisers say. I love the list of 20 ideas. Something for everyone!
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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, 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.
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Mortgage applications decreased 1.5 percent from one week earlier
WASHINGTON, D.C. (December 20, 2023) — Mortgage applications decreased 1.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 15, 2023.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week and was 18 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 4 percent compared with the previous week and was 18 percent lower than the same week one year ago.
“With the positive news about the drop in inflation, and the FOMC projections proclaiming a pivot towards rate cuts, the 30-year fixed mortgage rate reached its lowest level since June 2023, declining to 6.83 percent,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “At least as of last week, borrowers’ response to this rate move was rather tepid. VA refinance applications jumped 18 percent for the week, but otherwise, both refinance and purchase applications showed small declines.”
The refinance share of mortgage activity increased to 39.7 percent of total applications from 39.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 6.3 percent of total applications.
The FHA share of total applications decreased to 15.5 percent from 16.1 percent the week prior. The VA share of total applications increased to 15.6 percent from 14.2 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.83 percent from 7.07 percent, with points increasing to 0.60 from 0.59 (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) decreased to 7.12 percent from 7.22 percent, with points increasing to 0.55 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 30-year fixed-rate mortgages backed by the FHA decreased to 6.65 percent from 6.84 percent, with points decreasing to 0.69 from 0.72 (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 6.41 percent from 6.67 percent, with points increasing to 0.77 from 0.58 (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 6.33 percent from 6.47 percent, with points decreasing to 0.57 from 0.76 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Please Note:
MBA Offices will be closed Monday, December 25, 2023 and will reopen on Tuesday, January 2, 2024. Due to the holiday, the results for weeks ending December 22, 2023 and December 29, 2023 will both be released on January 3, 2024.
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.
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
Online: www.appraisaltoday.com
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