Appraisal News and Business Tips

Blog

About this blog

This blog has recent full FREE email newsletters (that start with the date and Newz) plus excerpts from the email newsletters where you can post comments. This newsletter has been sent out almost every week since June, 1994. I started with 6 subscribers on Compuserve. Now it is up to 17,000 subscribers!! To subscribe to the free email newsletters and get them them when they first come out, go to www.appraisaltoday.com and sign up in the big Yellow Box!!

Looking for a topic? Use Search box on the right side. There are hundreds of posts on this blog, starting in 2012. 

Read more!!

Posted in: appraisal, appraisal business, Appraisal fees

4-3-20 Newz: COVID-19: Data, Comps and Values

Download your FREE copy of the April paid Monthly Appraisal Today!!

Click here to download traditional 3-column format 12 pages

Click here to download the wordprocessing version. Read on your ipad or computer. About 24 pages.

NOTE: To find what you want, search (control – F) is useful. I use it myself all the time!

Why am I giving my newsletter to everyone? It is the right thing to do.

This newsletter discusses many topics in detail

Some of the topics:

  • It’s all about the data!! Limited testing data and what it means
  • The comps: current and past epidemics and pandemics
  • Being used for analysis of the future now.
  • Health and safety issues for appraisers
  • Masks, gloves, booties, etc.
  • When will we go back to our normal lives
  • Pandemics – the stages and what they mean
  • Immunity, Vaccines

======================================

Everything is changing so fast, it is very hard to keep up!

For example, in the April issue I wrote a lot about the CDCs recommendation on masks (only for heath care workers) and why I thought lots of people should be wearing them and why. A few days ago, the CDC is saying maybe they should recommend what I was saying. Had to revise my April newsletter!! I am sure some of what I wrote will be changing soon (finished on Wednesday), or has already changed.

Read more!!

Posted in: Coronavirus, liability, real estate market, weird properties

4-1-20 Newz: Effects on Value; FHA/VA; Return to Normal?; Fun Video

The paid Appraisal Today April newsletter will be free on April 3, Friday.

It focuses on what COVID-19 means for appraisers. I researched and discuss details: why data is the key, what are the comps, etc. Topics such as using gloves and face masks. There is lots of mis-information out there. I use the experts – scientists, especially epidemiologists.

==============================================

SOCIAL DISTANCING IS CRITICAL. WE ALL MUST WORK TOGETHER TO SO THAT FEWER PEOPLE GET THE VIRUS. WE MUST MAKE PERSONAL SACRIFICES. FOLLOW THE ADVICE OF YOUR STATE AND LOCAL HEALTH DEPARTMENTS.

Louisiana is an example of what happens when lots of people gather together. Mardi Gras was February 25. No one knew much about it then.

On March 5 I took an appraisal class. No one did social distancing, even myself, or even talked about it. Some hand shaking. One person coughed and quickly said something got caught in his throat so attendees were somewhat aware of it. Hard to remember what those days were like… when there were live classes or meetings…

————————–

BE GRATEFUL THAT YOU CAN STILL WORK!!

We all see shuttered stores, many businesses shut down, employees laid off. Appraisers are still working. Lenders need appraisals. You choose which personal protection to use. You decide which appraisals to accept. You can drive around while most of us are staying in our homes.

———————————-

Interior Inspections: Tough Choices for Appraisers

More comments in workingre article here:

http://www.workingre.com/interior-inspections-tough-choices-for-appraisers/

————————————————————

You already know what think – Just Say No.

Here are a few ideas:

  • Turn down FHA with interior inspection. way too risky!!
  • Raise your fees a lot for interior inspections. They are risky.
  • Drivebys and desktops will take a lot of time getting photos from borrowers. Asking questions, Etc. Ask higher fees than you used to ask.
  • Take fewer assignments.
  • This will not last very long. Lenders are shifting to drivebys and desktops. Why risk heath and safety you, your family and others, for a few appraisals?

GSEs/FHA/VA and bank commercial lenders are trying to protect appraiser’s health and safety by eliminating interior inspections. Freddie Mac has new guidelines for apartment appraisals.

Read more!!

Posted in: appraisal business, Appraisal Foundation, Coronavirus, Fannie, FHA, unusual homes, va

3-27-20 Newz: Fannie Update/Resources – 1004 for drivebys, forms changes, inspection, etc.

NOTE: This information is changing on a daily, and often hourly, basis. The amount of information is almost overwhelming. What you read today may change tomorrow. Most of the info below is summary with more details in the monthly newsletter next week. Also, lots more on personal COVID-19 such as data availability, safety, etc. I am spending 10+ hours per day trying to keep track of it so I can let you know.

Per Fannie, this is a “fluid event”. There are many questions about health and safety for the appraiser and the borrower (and their contacts if infected) when doing interior inspections.

There is lots of appraisal misinformation online. It is not a good source unless it includes a link to the correct information or the source that can be located online. I only use email chat groups that I have used for many years, such as National Appraisers Forum To read more, click here

Read more!!

Posted in: Coronavirus, Fannie, fees

3-20-20 COVID-19 and Appraisers. What are lenders doing? – FREE Webinar – Interior inspections?

There are many, many issues which seems to be changing on a daily basis. I wrote this yesterday. There have already been changes I am sure. I am including links to relevant information below

The big refi boom is causing lots of desperate lenders and AMCs trying to find appraisers.

You don’t need more info on keeping safe as it is available all over. What I discuss today is shift from interior inspections to drivebys, forms, what lenders are saying, what real estate agents are doing, the market changes (maybe), liability, etc.

What are lenders and AMCs doing?

Some direct lenders, such as Citibank, are sending out emails about what they recommend. On the other side AMCs are acting like nothing has happened and sending out email blast low fee appraisal request. FYI, it is a lot easier for one lender to change. AMCs work for many lenders.

Info on what Citibank is recommending from VaCAP:

Many are fearful exterior only appraisals will be the end of the traditional appraisal as we know it. Right or wrong, exterior only appraisals are a possibility that may be acceptable in certain situations. VaCAP does not believe it will end traditional appraisals with interior inspections. The profession has been down this road before. It will not fly long term, especially if the market turns downward.

Some lenders are establishing COVID-19 protocols to follow and some have remained quiet on the subject. There are rumors that one lender has instructed appraisers not to inquire as the health of the occupants of the home due to privacy laws. Others like Citibank have developed their own protocol on how appraisers should handle COVID-19 concerns. There is great flexibility to the appraiser. See Citibank’s protocol below:

Worth reading. To read more, click here

Read more!!

Posted in: appraisal business, Coronavirus, va, weird properties

3-13-20 Coronavirus & Inspections – AVMs & Wonder Bread – Toilet Race

Appraiser’s (Changing) Role

Q&A with Mark Verrett, Chief Innovation Officer at Accurity Valuation

Excerpts: WRE: How can appraisers adapt to meet the profession demands?

Verrett: I think there are several ways to adapt to these challenges. The first is to work toward diversifying your practice away from 100 percent mortgage business niches. Our firm is a leader in green valuation, rural valuation, valuation consulting and litigation support and we help our offices diversify into those spaces. However, this solution isn’t for everyone….

To directly take on the challenges facing appraiser relevancy in the mortgage space, significant change is required. Appraisers need to unite to create a like-minded national voice that is not rejecting proposed changes for the profession, but rather working with stakeholders (regulators, lenders, clients, etc.) in conceptualizing, testing, tweaking, and ultimately modernizing the appraisal process on the mortgage side.

The appraisal community has a tough assignment in their role in this modernization. To be useful in the discussion, we need to challenge ourselves to be creative and open-minded, yet diligent in maintaining or, even better, improving the quality of the valuation being produced. I think it is extremely important for appraisers to listen and understand the needs of their clients and to creatively develop solutions that meet those needs.

Worth reading with some good ideas. To read more, click here

My comment: Accurity has franchisees and some very savvy appraiser officers and directors.

Read more!!

Posted in: AMCs, appraisal business, Appraisal fees, appraisal management company, AVMS, future, lender appraisals, Mortgage applications, mortgage loan volume, unusual homes, weird properties

3-6-20 Newz: Refi Mania – Corelogic AMC – Coronavirus & Housing Market

CoreLogic attributes its 4Q growth from shift to an AMC

Excerpt: Organic growth trends accelerated during the quarter boosted by market share and pricing gains. One example of accelerated momentum on the organic growth front relates to our new collateral valuation services model.

As you know, we successfully completed our AMC transformation last December. Our new service model has attracted significant market interest and we’ve recently secured major new contracts with two of the top 10 US mortgage originators. These wins together with a host of other new contracts for our reimagined service model are expected to generate strong double-digit underlying AMC revenue growth with higher margins in 2020.

To read more, click here

NOTE: Long article. Search for amc (21 references)

My comment: More staff appraisers? google corelogic AMC for more info.

======================================

Giant Roadside Curiosities

Just For Fun and Escape!!

Excerpts: American highways have something for everyone. Lots of litter. License plates galore. And, if you take the right route, a dinosaur car wash, or a supper club in the biggest fish you’ve ever seen.

To read more, click here

Read more!!

Posted in: adjustments, AMCs, appraisal regulations, Mortgage applications, mortgage loan volume, real estate market, weird properties

2-28-20 Newz: Adjustments – Appraiser Personalities – Data Standards

The One Personality Trait Every Property Appraiser Must Have

Excerpt:

Unbiased (46%)

“As an appraiser, you MUST give an unbiased opinion of value based on the data you have collected and your experience for it to be valid.”

“If you can’t be unbiased you should not be an appraiser. It is the hallmark of what an appraiser does.”

“Every appraiser needs to be unbiased. You can have knowledge, experience, patience, and all the credentials in the world, but if you are biased in either direction you are doing your client a disservice whether it benefits you or them.”

To read the other top traits and other interesting comments, click here

My comment: I was trained at an assessor’s office. When I first started working there I was told never to even have a taxpayer pay for your lunch. We were trained to be unbiased. Lending was a big shock for me later, with the pressure for values and non-disclosures. Most say that ethics come from within you. But, maybe fear of losing your appraisal license could be a motivator.

I don’t think that USPAP, licensing, regulations, etc. has done much about this. All it does is make us pay for a new USPAP book and class every other year. Plus way too many changing regulations. Plus very uneven state board enforcement. Before licensing, lenders knew who on their panels were ethical. When I started worked at a biotech company doing real estate management, I knew which local commercial appraisers were ethical and who was not after making a few phone calls. Of course, to many AMCs, all appraisers are the same, are sorta stupid and maybe unethical.

Read more!!

Posted in: adjustments, appraisal business, data, weird properties

2-14-2020 Newz: FIRREA Under Attack – Spectacular Spirals – Lending Up to 2005 Levels

FIRREA Under Attack!

Excerpt: Congresswoman Maxine Waters and Congressman William Lacy Clay request a formal study/investigation into Title XI (FIRREA) and the recent dilution of its intent by the Federal Agencies. The letter to Gene Dodaro, Comptroller General, Government Accountability Office, addresses threshold increases, regulatory exemptions, appraisal waivers, the North Dakota appraiser certification waiver and evaluations in lieu of an appraisal. It is clear the Chairwoman of the House Financial Services Committee and Subcommittee Chairman on Housing, Community Development and Insurance see the issues surrounding the recent events.

To read the press release and appraiser comments, click here

My comment: finally someone in Congress is noticing what is happening and complaining to the GAO!!

Read more!!

Posted in: adjustments, appraisal, appraisal business, appraisal how to, appraisal regulations, data, E&O, Mortgage applications, mortgage loan volume, unusual homes, weird properties

2-7-20 Newz: Obsolete Appraisers – Apartment AVMs – Outlier Sales

Not getting distracted by outlier sales

By Ryan Lundquist

It’s been a record-breaking couple of years. In New York we saw the highest residential sale ever in the United States at $238M. Then a couple months ago California got a new record with the Beverly Hillbillies mansion at $150M. And now there’s a listing in Bel-Air that just hit the market at $500M. The truth is it’s easy to get distracted by the bling of outlier sales because of how lofty the prices are, but here are a few things to keep in mind….

1) These sales don’t pull the market up: Outlier sales don’t pull the rest of the market up, and they have nothing to do with the entry-level market or affordability for the average person.

2) I just gotta have it: My observation with the highest sales is sometimes cash buyers offer prices that seem disconnected from what looks reasonable on paper. This doesn’t happen in all situations, but sometimes it does where the buyer simply says, “I just gotta have it.”…

For lots more tips, plus a few graphs, click here

My comment: When doing any type of statistical analysis, it is important to look at the outliers, high or low, so you can eliminate them in your data set. Very easy to do.

Read more!!

Posted in: adjustments, appraisal, Appraisal Foundation, appraisal how to, AVMS, commercial appraisal, mortgage loan volume, Podcasts, unusual home, USPAP, weird properties

1-30-20 Newz: Tax Records SqFt. – Weird SFR Zoning – 5 ft. Wide Home

13516718 – white wood texture with natural patterns

Tax Records is not the definitive source for square footage!

By Ryan Lundquist

Excerpt:

Why is the appraiser saying it’s only 1,400 sq ft? Tax Records shows the home is 600 sq ft larger. This issue comes up ALL the time, so let’s talk about it.

The truth: The Assessor’s records are generally reliable, but I’m just saying sometimes they’re not. Why is this? At times it’s as simple as the original builder not turning in accurate information when a house was built. Or maybe an owner took out permits but official records were never updated. Of course we’ve all seen instances where the tax roll shows two units on one lot, but there’s really just one house nowadays. Let’s not forget sometimes owners do an addition without permits, so the Assessor might actually be correct even though the house is technically larger or has even sold on MLS as a larger home. For reference, here are ten reasons why an appraiser’s sketch might be different.

For lots of comments and more info, click here

My comment: This one of the main reasons that AVMs will never be very successful for all homes. Over and over again, statistical analysis shows GLA is the most important physical feature overall.

Also, how bedrooms are determined varies a lot, depending on the local market and can vary over time. The assessor number of bedrooms may not match the appraiser’s. For example, tandem rooms. Finished basements can vary also.

I started appraising at a CA assessor’s office in 1976. In CA, State Board of Equalization regulated county assessors offices, so the procedures and terminology are very similar all over the state. However, GLA from the assessor may have different requirements than other sources, such as ANSI.

Proposition 13 passed in 1979, which only allowed an annual 2% increase in assessment per year, unless there was a sale or improvements (determined by permits). Over time, the information has become more and more out of date.

Data is not available for smaller counties if the assessor says it is confidential. Until the 90s, my county did not release any data, so I had to “guesstimate” on square footage for sales and listings. We finally got it when an MAI was elected assessor.

In the early 90s, I researched assessors records around the country. In some small rural counties the records were kept at the assessor’s home. They were not digitized and available for purchase by data companies.

Appraisers need to know which areas are not accurate. Someties GLA is “political”. Within a city, accuracy can vary. In my city the least accurate records are in the “Gold Coast” with many of the city’s larger, historic homes. In other nearby cities, some properties have low GLAs to keep the property taxes lower.

Read more!!

Posted in: adjustments, Appraisal Foundation, appraisal how to, Mortgage applications, square footage, Strange homes, unusual home, weird homes