Valuing Appraiser Professionalism: A Blueprint for Survival
By Jo Traut, McKissock Learning
Excerpts: Having spent nearly three decades in the field of real estate appraisal, I’ve witnessed firsthand the evolution of our profession, particularly with respect to technological advancements. However, alongside these positive changes, I’ve also observed a troubling trend toward increased unprofessionalism. This phenomenon isn’t unique to our discipline. It’s permeated other careers, from medical professionals to teachers to business managers.
What professionalism means in the appraisal profession and how we can all work toward achieving it.
Integrity
Remain steadfast in your commitments, stay true to your word, and uphold your principles, even if this requires declining an appraisal assignment or future work with a client or their agent. By staying honest and true to your values, others are more likely to trust and collaborate with you or recommend you and your business.
Expertise
Professionals strive for proficiency in their field, continually enhancing their knowledge through education, webinars and personal development efforts. It’s not just about acquiring designations but staying informed about market dynamics, industry changes and emerging trends.
Commitment to Excellence
True professionals are prepared, which entails advance planning, dedicating sufficient time and giving proper attention to tasks. Before delivering work to clients, conduct a thorough review to mitigate potential errors. Acknowledge and address any skill gaps or lack of competency promptly and transparently, ensuring a commitment to excellence in every endeavor.
To read more, Click Here
My comments: I have always done “Remain steadfast in your commitments, stay true to your word, and uphold your principles.” I was first trained as a scientist, starting with my high school biology class. After graduation, I worked in labs for 7 years.
I have always been a professional appraiser since I started in 1975, trained at an assessor’s office to do what is in this article. I hate the word “industry” when applied to appraisers. I try to avoid using the word “industry”. Since licensing, residential appraising has become more of a “trade” than a professional career. I quit residential lender appraising in 2005. I know about the conflicts, which have been getting worse.
Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!
NOTE: Please scroll down to read the other topics in this long blog post on Easement Liability, college degree requirement AQB, Fannie June Update, ADUs, unusual homes, mortgage origination stats, etc
===========================================================
=======================================================
Renovated Modernist Mansion in Salt Lake City for $3.699M
Excerpts: 4 bedrooms, 4 baths, 4,660 sq.ft., 0.5 Acre lot, built in 1962
John Sugden, a disciple of Mies van der Rohe and a luminary in architectural design, crafted this home with a robust U.S Steel frame and expansive floor-to-ceiling glass, featuring pioneering design elements like smokey gray glass eyelids.
The original wall-to-wall terrazzo flooring and St. Charles kitchen cabinets have been preserved and restored, blending seamlessly with luxurious modern updates like fine wool carpeting in the bedrooms and sophisticated new kitchen and bathroom fixtures.
To read more, Click Here
To see the listing with 83 photos, Click Here
===========================================================
College Degree Requirement Needed?
DEADLINE FOR COMMENTS: JULY 27, 2024
On May 28, 2024, the AQB released:
Concept Paper – Assessment of College Degree Requirements within the Criteria and Reference Material for the Concept Paper
To read the 12 Page summary of the exposure draft (PDF), Click Here
To read the AQB Exposure Drafts page with all the links, including 166-page reference materials and previous drafts, Click Here (Scroll down the page)
The comment period is open until July 27, 2024. To submit comments, Click Here
Excerpts:
The plan is comprised of three main phases:
• Phase one includes reassessing the importance and worth of college requirements and related requirements as part of the Criteria.
• Phase two explores the potential of allowing experience from related professions as a potential alternative pathway to meet qualifications within the Criteria.
• Phase three studies the structure and requirements of the National Exams for each of the credentials.
Therefore, the initial phase of this reassessment, and the main topic this Concept Paper addresses, entails revisiting college requirements. Stakeholders have recently urged the AQB to eliminate these requirements. In response, the AQB has recognized that this request is just one aspect of a broader inquiry.
At the center lies this crucial inquiry: Are only essential requirements included in the Real Property Appraiser Qualification Criteria? Acknowledging this query encompasses the entire Criteria, for this phase, we are focused on the requirements that include college level course work or degrees.
The college requirements1 have been a part of the Criteria (in one form or another) since the AQB initiated public discussion of these requirements in 2001, formal adoption in 2004, and subsequent implementation in 2008.
My comments: My apologies for waiting so long to write about this topic.
I attended an early AQB meeting in San Francisco. I was one of the few who opposed the requirement. I have a degree in Biology, where I learned statistics, scientific professional standards, and more.
I had never taken a class in economics, marketing, data analysis, financial analysis, etc. In 1980, I finally got an MBA, which made me a significantly better appraiser. My mini-thesis was Volatility in REIT stocks using multiple regression software (SPSS) on a networked computer.
I also got a California Broker’s license in 1986, which only required a college degree and no real estate experience. I got it for MLS access. Later, real estate sales experience was required.
What about a degree in another field that did not include any appraisal-related training?
I think requiring specific appraisal-related classes is much better than a “college degree” for residential certification. For example, classes in economics, business writing, statistics, finance, business ethics, marketing, and many more business topics. My first appraisal class on the income approach in 1978 was very, very difficult, as there were no pre-requisite classes. After I got my MBA, I challenged all the AI income classes.
What do you think? Submit your comments!
===========================================================
Are you getting too many ad-only emails?
4 ways to get only the FREE email newsletters and NOT the ad-only emails.
1. Twitter: https://twitter.com/appraisaltoday Posted by noon Friday
2. Read on blog www.appraisaltoday.com/blog Posted by noon Friday. You can subscribe to the blog in the upper right of each blog page. NOTE: the popular ads with liability tips are below the first topic on my blog posts.
3. Email Archives: https://appraisaltoday.com/archives
(posted by noon Friday) The link is above and to the left of the big yellow email signup form. Newsletters start with “Newz.” Contains all recent emails sent.
4. Link to the 10 most recent newsletters (no ads) at www.appraisaltoday.com. Scroll down past the big yellow signup block. The newsletters have abbreviated titles, taken from their blog posts.
To read more about the 4 ways, plus information on why I take ads, etc.
===========================================================
New in the July 2024 issue of Appraisal Today:
-
The Generative Shift: A Thorough Examination of AI in Appraisal by Jim Amorin, CAE, MAI, SRA, AI-GRS, CDEI – Book Review by Craig Gilbert, ASA, SRA, CRP
-
Residential to Commercial Transitions: The Three Legs to Success, by Denis Desaix, MAI, SRA
-
USPAP, AI and Uncertainty by Tim Andersen, MAI
The Generative Shift – the best practical explanation of how appraisers can use ChatGPT. Includes explanations of related appraisal issues, such as AI and bias, appraisal reviews, limitations, future.
Residential to Commercial: Denis Desaix did it, from residential sweat shop to MAI, including getting his college degree. Many practical tips for anyone thinking about getting a certified general and expand way beyond AMC appraisals.
USPAP is not a “how to” manual for appraising, which has no standards for adjustments for example. Discusses AI downsides and fee issues.
To read more about these topics, plus 2+ years of previous issues, subscribe to the paid Appraisal Today at www.appraisaltoday.com/order .
Not sure if you want to subscribe?
Sign up for monthly auto renewal for $8.25!
Cancel at any time for any reason! You will receive a prorated refund.
$8.25 per month, $24.75 per quarter, and $89 per year (Best Buy)
or $99 per year or $169 for two years
Subscribers get FREE: past 18+ months of past newsletters
What’s the difference between the Appraisal Today free Weekly email newsletter and the paid Monthly newsletter? Click here for more info.Subscribe to Monthly NewsletterIf you are a paid subscriber and did not receive the July 2024 issue emailed on Monday, July 1, 2024, please email info@appraisaltoday.com, and we will send it to you. You can also hit the reply button. Be sure to include a comment requesting it.
———————————————————————————–
Please hit the reply button if you have any comments or info on any topics. I’m always looking for something new ;>
===========================================================
June 2024 Fannie Mae Appraiser Update
Topics (excerpts):
Reconsideration of value — rights and responsibilities – Good, detailed analysis of ROVs – who does what (appraisers, lenders, borrowers)
Excerpt: Appraiser rights
This policy aims to protect appraisers’ rights through two mechanisms: First, ROV requests must meet minimum information requirements and be deemed relevant to support the dispute by the lender’s validation process. It limits the number of alternative comparables that can be shared with the appraiser to five. Also, it limits the borrower to one ROV request per appraisal. Second, it makes clear that the ROV policy in no way supersedes or changes our AIR.
Avoiding appraisal deficiencies – Examples
Excerpt: Issue: The appraisal relies on an adjustment for design, stating the subject’s design commands a premium. The appraisal includes no recent sales of similar design.
Short-term rentals (STRs) and Form 1007
Excerpts: When appraising an STR for conventional mortgage lending, the appraiser must take care to only include the real property in the value, not the personal property or the business/going concern.
The 1007 was not designed for appraising single-family properties that are used as STRs. Specifically, the 1007 calls for the “Indicated Monthly Market Rent.” This means the appraiser needs to analyze competing properties leased on a monthly basis. It would be incorrect for the appraiser to use STR comparables and then multiply the nightly STR fee by 30 to estimate a monthly rent. Such an approach would fail to account for FFE, other services, vacancy rates, and business expenses.
To read more, Click Here
My comments: This is short and worth reading. Definitely read this before doing STRs on a 1007, which an AMC or lender requests.
===========================================================
Key Considerations for Appraising Accessory Dwelling Units (ADUs)
By Jo Traut
Excerpts: Appraising ADUs requires a nuanced understanding of market characteristics, legal frameworks, and property specifics. By staying informed and considering all relevant factors, you can deliver credible valuations. ADUs represent a growing segment of the housing market, and your expertise as an appraiser is crucial in reflecting their true value.
ADUs are not unique to urban locations and are becoming a crucial part of the housing market.
Topics include:
- Urban, Rural, Suburban
- Understanding the legal landscape
- Monitoring financial incentives
Key Factors in ADU Appraisal
- Property data and features
- Buyer types
- Zoning
- Misclassifying ADUs as duplexes
- Understanding new flexibilities
To read more, Click Here
My comments: I have followed ADUs in my local market since they started. They were difficult to build, and each city had its own requirements, etc. Finally, California set up state regulations subject to local requirements. In 2024, Assembly Bill 68 allows landlords and homeowners to add two more units—an ADU and a Junior Accessory Dwelling Unit (JADU)—on any residential lot.
Research is required to determine what is being done in your local city, county, and state.
===========================================================
Older Than America Herself: 5 of the Nation’s Most Historic Homes for Sale—All From the 1600s
Excerpts: Old homes have so much to offer: history, character, craftsmanship, and those one-of-a kind features you just can’t get in a new build.
But really old homes can be a rare find in the U.S.—and it’s especially hard to find historical dwellings in good shape.
Luckily, some of the oldest homes on the market right now are gems—with history around every corner and elegant renovations that give buyers the best of the past and present.
These five historic-homes, all built in the 17th century, have their own names (are we in a Jane Austen novel?), stunning original features, and a whole lot of stories.
Number 2. 125 County Rd, Plympton, MA (PHOTO ABOVE)
Price: $800,000
Excerpts: 3 bedroom, 2 bath, 2,503 sq.ft., 2 acre lot, Built in 1669
Historically restored: “The Stephen Bryant House” looks like it hasn’t been touched since the 17th century, but this three-bedroom property has been “meticulously restored and maintained” by the current owners, ensuring the home is both safe and comfortable.
It includes working fireplaces and leaded-glass windows, which are new but period appropriate. The kitchen also looks like a step back in time but it’s been updated with modern appliances: a fridge and an oven.
Outside, there’s a detached, one-car garage; herb gardens; and even a chicken coop.
To read more, Click Here
===========================================================
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 decreased 0.2 percent from one week earlier
WASHINGTON, D.C. (July 10, 2024) — Mortgage applications decreased 0.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending July 5, 2024. Last week’s results included an adjustment for the July 4th holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 20 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week and was 28 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 19 percent compared with the previous week and was 13 percent lower than the same week one year ago.
“The recent uptick in mortgage rates has slowed demand. Mortgage applications were essentially flat last week, as mortgage rates remained around 7 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase activity picked up slightly, driven primarily by increases in FHA and VA applications. Refinance applications decreased for the fourth consecutive week, in line with higher rates. Although home equity gains have been significant in recent years, most borrowers do not have much of an incentive to refinance at current rates.”
The refinance share of mortgage activity decreased to 34.9 percent of total applications from 35.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.2 percent of total applications.
The FHA share of total applications decreased to 12.5 percent from 13.1 percent the week prior. The VA share of total applications increased to 13.7 percent from 12.9 percent the week prior. The USDA share of total applications increased to 0.4 percent from 0.3 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.00 percent from 7.03 percent, with points decreasing to 0.60 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 $766,550) increased to 7.13 percent from 7.11 percent, with points decreasing to 0.38 from 0.50 (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 6.87 percent from 6.90 percent, with points decreasing to 0.92 from 0.95 (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 increased to 6.63 percent from 6.56 percent, with points increasing to 0.61 from 0.54 (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 decreased to 6.22 percent from 6.38 percent, with points increasing to 0.6 from 0.54 (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
Phone: 510-865-8041
Email: ann@appraisaltoday.com
Online: www.appraisaltoday.com
We want to know what you think!! Please leave a comment.