Newz: 10 Appraisal Myths, AMCs – Appraiser Ripoffs – AMC Junk Fees
November 29, 2024
What’s in This Newsletter (In Order, Scroll Down)
- LIA – Intended Use and User
- Don’t Fall for These 10 Real Estate Appraisal Myths
- Extraordinary 4-Story Megamansion With Rooftop Putting Green and 2 Pools Lists for $78 Million
- Now What? On a New Trump Administration
- Outrage Over Connect by ValueLink’s New Monthly “Junk Fee”
- Mortgage applications increased 6.3 percent from one week earlier
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- Appraisal Business Tips
Humor for Appraisers -
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10 Real Estate Appraisal Myths
By Tom Horne
Excerpts: In this week’s post, I dispel some common appraisal myths that have been around for years.
10 Appraisal Myths
Myth #1: All real estate appraisers are the same
Myth #2: Appraisals are the same as the Zillow Zestimate
Myth #3: The appraisal always comes in at the contract price
Myth #4: The appraiser is working for the buyer
Myth #5: Cost always equals value
Myth #6: Comps must be within one mile of the subject property
Myth #7: Agents and appraisers cannot talk
Myth #8: Appraisals and home inspections are the same
Myth #9: Assessed value will equal market value
Myth #10: The “new” appraisal methods are better than the old
To read more, Click Here
My comments: I’m sure you have heard some, or all, of these questions. I have heard them. Read the full post to see the answers you can use.
This blog post is written for newer real estate agents, but a good reminder of what many other people think. For example, when I say I am a real estate appraiser, many people ask if I have any listings. They think I am an agent and don’t know what appraisers do. Unfortunately, that is the main reason appraisers have difficulty when trying to communicate appraisal issues. Few listened to appraisers speaking out about fraud before the 2008 crash. What did we residential lender appraisers get to “fix” the problem? AMCs.
I don’t know why the appraisal associations have never done much to let people know about what appraisers do.
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Extraordinary 4-Story Megamansion With Rooftop Putting Green and 2 Pools Lists for $78 Million
Excerpts: 9 bedrooms, 11.5+ baths, 21,927 sq.ft. 0.92 acre lot, built in 2017
Nestled along 150 ft. of Biscayne Bays pristine coastline, the estate offers an unparalleled experience on nearly an acre. Soaring ceilings, expansive open spaces, & impeccable finishes, every detail reflects modern elegance.
Highlights include: rooftop oasis complete w/ a putting green, shuffleboard deck, heated jacuzzi, & sweeping bay views, along w/ 2 heated saltwater pools one privately tucked into the expansive terrace of the principal suite.
State-of-the-art movie theatre, outdoor kitchen, & Crestron smart home technology.
To see the listing with a virtual tour and 37 photos, Click Here
Now What? On a New Trump Administration
By John Russell
November 25, 2024
Excerpts:
Topics:
- On GSEs and FHFA
- On Bias and Discrimination
- On the Consumer Financial Protection Bureau (CFPB)
- On Housing Affordability and Mortgage Costs
- On Appraisals Generally
- Lastly, on Congress
Final Thoughts
…This is not what I want them to do, but rather a distillation of how various documents and comments can inform expectations.
The recent expansion of appraisal waiver eligibility likely does not sit well with those poised to take on leadership roles in the next Trump administration, as it underscores creep from the GSEs missions. You could also argue that the GSEs effective capture of the mortgage-related appraisal process falls into that category, though it’s difficult to see an unwinding of the new Uniform Appraisal Dataset and Forms Redesign.
We have clear answers on what we can expect from the Trump administration on bias and discrimination, if we take at face value the Project 2025 statement on the matter: “Immediately end the Biden Administration’s Property Appraisal and Valuation Equity (PAVE) policies and reverse any Biden Administration actions that threaten to undermine the integrity of real estate appraisals.”
…the winding down of PAVE seems almost inevitable. This also opens the door for pushback on related changes, such as the expansion of the Nondiscrimination rule of the Uniform Standards of Professional Appraisal Practice, or the addition of valuation bias education to the Real Property, to the extent that either of these would include content that goes beyond what exists in statute already. Whether and to what extent changes are sought in appraisal standards or appraiser qualification criteria—and how a Trump administration might pursue such changes—is open for interpretation.
While it’s hard to know in advance whether any administration’s work will be net positive or negative for the appraisal profession, it would be fair to characterize the past four years as ones where appraisers and appraisals were a constant focus—especially through the lens of bias and discrimination.
I know from many conversations I’ve had, there is real fatigue out there among appraisers who simply want to do their job as best they know—objective, unbiased, and impartial. If nothing else, the early days of the Trump administration may provide some respite from a tumultuous period for the profession as other priorities take center stage.
To read more, Click Here
My comments: This is one of the best analyses of possible changes coming for appraisers I have read. Well written and understandable. I also look at Project 2025 to see at what might happen for appraisers in my articles.
John D. Russell, JD, has fifteen years of experience working on issues affecting the valuation profession. More info on the author is below the comments section.
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2024 Year end tax planning for appraisers. You can still save on your 2024 taxes!
In the December 2024 issue, available December 1.
When your business is slow, saving on taxes is more important than
when you are busy. Every Dollar Counts!!
Your most significant tax decision now is based on if you expect that total
taxable income (personal and business) in 2025 will be going up, stable, or down from 2024.
If you expect your 2025 income to be higher than 2024, consider deferring
purchases, donations, etc. as you will need them more in 2025. If you expect it to be lower in 2025, take all the deductions you can.
Take advantage of all business deductions not paid out of business checks
or business credit cards. Review your records and cancelled checks carefully to take advantage of all business deductions. Be sure your deductions are adequately supported by written records that indicate time, amount and business purpose.
Be sure to check for any business expenses paid using a personal
checkbook or credit cards. For example, sometimes a vendor will not accept my business Amex credit card, so I use a personal credit card. Also, I sometimes use a personal credit card for paying expenses on my rental property. Every year I go through my personal checking account and credit cards to be sure I don’t miss a deduction.
I hate cash purchases as I don’t keep track of them very well and sometimes
forget to throw the receipt into a special “petty cash” box.
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Outrage Over Connect by ValueLink’s New Monthly “Junk Fee”
Excerpts: The recent announcement from Connect by ValueLink has sparked outrage among appraisers. Effective January 1, 2025, the company plans to institute a new $19.99 monthly user fee for all appraisers utilizing their portal to receive and submit appraisal orders. This fee will be in addition to the existing technology fees already charged on a per-appraisal basis. Understandably, many appraisers are up in arms over this development, viewing it as yet another “junk fee” that will only serve to erode their already-thin profit margins.
What makes this particularly galling for appraisers is the fact that it is often appraisal management companies, mortgage brokers and lenders, not the appraisers themselves, who have chosen to work with the Connect by ValueLink platform. These clients have essentially mandated the use of this portal, leaving appraisers with little choice but to comply if they wish to continue receiving orders.
The sentiment among appraisers is clear: they are the indispensable ingredients in the proverbial “cake,” and without their participation, the entire system will grind to a halt. As such, appraisers are rallying their colleagues to collectively stand firm and reject this latest attempt to nickel-and-dime the profession, sending a strong message that the appraisal community will not be taken for granted or exploited.
To read more, Click Here
My comments: Another AMC Ripoff. Just Say No.
The data below tells 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. We are all waiting for rates to drop in 2025.
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Mortgage applications increased 6.3 percent from one week earlier
WASHINGTON, D.C. (November 27, 2024) — Mortgage applications increased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 22, 2024.
The Market Composite Index, a measure of mortgage loan application volume, increased 6.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 119 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 12 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 52 percent higher than the same week one year ago.
“Purchase activity drove overall applications higher last week, as conventional purchase applications picked up pace and mortgage rates declined for the first time in over two months, with the 30-year fixed rate dropping slightly to 6.86 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. With the growth in for-sale inventory and signs that the economy remains strong, buyers have remained in the market even though rates have increased recently. The increase in conventional purchase applications helped push the average purchase loan size to $439,200, its highest level in almost a month. The decline in refinance activity was driven by pullbacks in FHA and VA refinances. Applications were significantly higher than a year ago by most measures, but this was compared to the week of Thanksgiving 2023, which was a week earlier than this year’s holiday.”
The refinance share of mortgage activity decreased to 38.8 percent of total applications from 41.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.6 percent of total applications.
The FHA share of total applications decreased to 16.0 percent from 16.6 percent the week prior. The VA share of total applications decreased to 12.4 percent from 13.6 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 ($766,550 or less) decreased to 6.86 percent from 6.90 percent, with points remaining unchanged at 0.70 (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) decreased to 6.97 percent from 7.03 percent, with points increasing to 0.63 from 0.53 (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 6.61 percent from 6.68 percent, with points increasing to 0.99 from 0.90 (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 6.29 percent from 6.32 percent, with points remaining unchanged at 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 remained unchanged at 6.34 percent, with points increasing to 0.63 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. Base period and value for all indexes is March 16, 1990=100.Ann O’Rourke, MAI, SRA, MBA
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