Appraisal News and Business Tips

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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. 

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Posted in: appraisal, appraisal business, Appraisal fees

5-22-20 Newz: Refis to Surge – Selling Over List – What’s Happening in Your Market?

Mortgage refinancings set to surge to a 17-year high

Lenders probably will originate $1.5 trillion in refis, a 51% jump from 2019, Fannie Mae says

Excerpt: Even as other parts of the economy tank, lenders will originate $1.5 trillion in refis in 2020, a 51% jump from 2019, according to the forecast. That would be the highest level since 2003 when $2.5 trillion of mortgages were refinanced, according to data from the Mortgage Bankers Association.

The lowest interest rates on record will bolster refis after the Federal Reserve began buying mortgage-backed securities to stimulate bond demand and grease the wheels of the credit markets. The average U.S. rate for a 30-year fixed mortgage fell to an all-time low of 3.23% at the end of April, according to Freddie Mac.

It’s probably heading even lower, according to the Fannie Mae forecast. The average rate probably will be 3.2% in the second quarter, down from 3.5% in the first quarter, and drop for the rest of the year.

To read more, click here

My Comment: And I thought my 3.5% rate loan was a low rate!! Everyone should refi!! Appraisers will be very busy!! Maybe more lenders will order external and desktop appraisals.

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Will Sex Sell? BDSM Dungeon in Arkansas Basement

Excerpts: A hidden door gives access to the dungeon, leading down a spiral staircase. At the bottom is a full nightclub, outfitted with an entertainer’s pole, along with custom-BDSM furniture Shayne made himself.

The couple says the neighborhood is quiet and an excellent place to raise a family.

Some of their neighbors know about the dungeon, and a few have been invited over. The space isn’t a dirty secret, and the couple is happy to talk about it with anyone who shows interest.

Despite the fact that the surrounding community is largely conservative, Shayne says the couple has had “zero negative feedback ”

For more info and lotsa fotos click here

Read more!!

Posted in: adjustments, appraisal how to, FHA, george dell, Mortgage applications, mortgage loan volume, real estate market, Strange homes, unusual home, weird homes

5-15-20 Newz: 700 Missing Sales – Comml Appraisals Down – 22 Unusual Homes

Weird or Wonderful? 22 Homes That Are Anything But Ordinary

JUST FOR FUN! TAKE A SHORT BREAK NOW. YOU DESERVE IT!!!

Excerpts: Homebuyers and renters who dare to be different often put down roots in alternative dwellings that others eschew. Even if your inner compass tells you to steer clear of the offbeat or the outlandish, you may enjoy window-shopping these eccentric estates with …

Here’s one – foto above:

Sky-high Single Family Home in Prescott, Arizona

Is it a bird? Is it a plane? No, it’s the Falcon Nest, a ten-story dwelling whose 124-foot stature makes it the tallest single family home in North America.

To read more, click here

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Fannie Appraiser Update

Undated. Received by email on 5-13-20

NOTE: This is about exterior only and desktops. These appraisals are NOT the same as the old “drivebys” where you assumed the inside was like the outside, no owner interviews, etc. The old Desktops (aka comp checks) are not the same now. Lots more research is required.

Excerpt: As Fannie Mae has begun to examine appraisals completed using our temporary appraisal flexibilities in Lender Letter LL-2020-04, Impact of COVID-19 on Appraisals, one issue we’ve observed is that some appraisals rely on assumptions about the subject property condition. Whether completing an exterior-only or a desktop appraisal, the appraiser must have a data source for all the relevant characteristics including interior condition. Obtaining that information, whether it be from homeowners or other sources, is not only encouraged, but is required. This is addressed in the FAQs regarding the temporary flexibilities (Q47):

As stated in Lender Letter LL-2020-04, the appraiser’s certification #10 was removed recognizing that the appraiser may have to rely on information from an interested party to the transaction (borrower, real estate agent, property contact, etc.) and additional verification may not be possible. The removal of this certification acknowledges this could affect the assignment’s results. If adequate information is not available to complete the appraisal, the assignment cannot be completed.

Excerpt:

My comment: Of course, a big problem is that few of them are being done now. I am sure this is the reason why there is so much confusion. They are a lot of work. You could decide just to turn them down if you get requests for very few of them.

Also, some clients order the “traditional” 2055, where you drive by, take a few photos, and assume the inside is like the outside. This is NOT acceptable for GSEs and VA. You MUST ask your client what type of 2055 they are ordering or, who are they selling the loan to. FHA does not use 2055s.

I sent out similar information last week. This is the “official” notice with references. You MUST take the time to learn about all the changes and do a lot more work than before. That is why you should charge the same for full appraisals, exterior, and desktops.

To read more, click here

Read more!!

Posted in: Appraisal fees, commercial appraisal, Coronavirus, desktop appraisals, Fannie, FHA, lender appraisals, Mortgage applications, real estate market, unusual homes, USPAP, webinars

5-8-20 Newz: Cash-out Refis Declining – Inspection Warnings – Snowboarding Cat

USPAP Q&A April 24, 2020

2020-04: Apppraisal Development – Inspections 

Personal Inspection of Exterior plus Remote or Virtual Inspection of Interior

Question: If an appraiser makes a personal inspection of the exterior of a property as part of a mortgage finance transaction (or in any other assignment) and then receives interior photos, video, or other technology-based view(s) of the subject, can the appraiser state that they performed an interior inspection?

Response: No. A personal inspection of the interior of the property by the appraiser is not the same as viewing the interior virtually or remotely. It would be misleading for an appraiser to indicate that an interior inspection of the subject property was performed, when, in fact, the appraiser only viewed interior photos, video, or other data from technological solutions. (See Conduct sectionof the ETHICS RULE, Disclosure Obligations of the SCOPE OF WORK RULE, and Advisory Opinion 2, Inspection of Subject Property.)

My comment: My apologies for last week’s very confusing explanation of this… The explanation plus USPAP references above is very clear.

To read the original document plus other recent Q&As, click here
Update to Fannie Lender Letter (LL-2020-04)

Impact of COVID-19 on Appraisals

May 5: Extension of effective date: extending the application dates eligible for these temporary flexibilities to Jun. 30, 2020

To read this Lender Letter click here. Has updates going back to March 23. Hard to keep track of all of them!

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Virtual Inspection Tools From Fannie’s letter above on April 14. 

Appraisers may use virtual inspection methods to augment the data and imagery that is used for either a desktop appraisal or an exterior-only appraisal. 

All traditional appraisals require the appraiser to perform a complete onsite interior and exterior inspection of the property. A virtual inspection cannot be used as a substitute for the onsite interior and exterior inspection for a traditional appraisal. 

Additionally, an onsite interior and exterior inspection is required for the Appraisal Update and/or Completion Report (Form 1004D) used to confirm completion of renovation for HomeStyle Renovation loans. Virtual inspections using video and photographs provided by the borrower or contractor can be used to evidence renovation progress to disburse additional renovation funds as described below.

My comments: YOU MUST GO INSIDE THE HOME FOR A INTERIOR INSPECTION APPRAISAL. YOU CANNOT:

– Stand outside the house and tell the borrower which photos to take.

– Take photos through the window.

– Use Virtual Inspection Tools

I guess appraisers are doing this. Don’t risk your license!!

Read more!!

Posted in: Appraisal fees, BATHROOMS, Freddie, humor, USPAP

5-1-20 Newz: Credit Unions Can Delay Appraisals – Bathrooms and Epidemics – Pandemic: Buyers and Sellers

 WOOPS! BATHROOM ARTICLE NOT INCLUDED. DARN!! TO READ IT GOOGLE BATHROOMS AND EPIDEMICS

75 percent alcohol disinfectant alcohol spray nearby a house concept of disinfecting the house

By Ryan Lundquist April 30, 2020
Excerpts: Buyers more sensitive about location & condition: For years buyers have been exhibiting sensitivity to adverse locations and homes that are not in pristine condition. In other words, buyers have higher expectations about what they are buying and they aren’t overlooking the true condition of a home or paying top dollar for junk. I expect going through a pandemic will only inflame this dynamic.
Cash out at the top: Some people are concerned about the market changing directions, so we’ll see certain owners try to cash out at the top so to speak. I’m not saying we’re at the top of a price cycle. I’m only saying some people think the pandemic has pushed us or will push us into a new price cycle.
To read more, click here

Personal note from Ryan: Appraiser John Carlson GoFundMe: John is a well-known appraiser in Southern California and he is going through a difficult time as he was diagnosed with cancer and hospitalized. I invite you to pray for him and donate if you can. To read more, click here.
My comments: I spoke yesterday with a local appraiser friend who is thinking about selling her house and moving to a smaller, lowered priced house. (She is 78 years old, one year older than myself, but still appraising.) No listings or pendings in her area. Seemed like a good idea to me.

On June 29, McKissock had a webinar ” Appraising in a Pandemic”. In the last half hour, Ryan gave the best presentation I have ever seen on what to put in your report about the current market, not just a “I don’t know anything disclaimer”. He also had a sample statement slide. The recording was not available by my deadline. I will send it to you in next week’s email.
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DO NOT use photos or videos, taken by the owner while you remain outside, for an appraisal requiring interior inspections!!

This is NOT ALLOWED by USPAP. When the assignment requires the appraiser to do the interior inspection and photos, use of secondary source photos and interior characteristic detailing is prohibited. Google Appraisal Foundation Q&As and scroll to 2020-04: “Personal Inspection of Exterior plus Remote or Virtual Inspection of Interior.”

Or, you are standing outside taking photos through the window or directing the owner to do photos, facetime or other videos. Even if the owner is using a Virtual Inspection Tool, it is not allowed. Don’t risk your appraisal license!!

Read more!!

Posted in: Coronavirus, Mortgage applications, real estate market, state appraiser regulators, UAD, USPAP

4-24-20 Newz: Markets Changing? Free Webinars – UFO Homes

NOTICE TO READERS: No covid analysis this week except for this market discussions. Taking a break from Covid. To read my April 3 newsletters, with lots of mostly scientific info, plus updates in these emails since that April 3, go to www.appraisaltoday.com/coronavirus

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House with epidemic influenza and Coronavirus Covid-19 concept

By Ryan Lundquist

Excerpt: FIVE WEEKS AGO: About five weeks ago the real estate market started to have a strong reaction to the coronavirus. I look to March 12th as our day of change as that’s when things started to kick into high gear with events cancelling and sellers and buyers backing off the market.

OBSERVATIONS RIGHT NOW:

1) Pendings and listings declined heavily for a few weeks.

2) Pending contracts have begun to increase again.

3) More new listings are hitting the market.

See how Ryan analyses his market – lots of graphs. Also watch a video interview with Ryan. To read more, click here

My comment: See how the Burmingham, AL is analyzed below. What works for your market?

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Do We Have To Wait To Know How The Pandemic Will Affect Our Market?

Ryan’s interview with Dustin Harris, the Appraiser Coach

Excerpt: Many appraisers are in a “wait and see” pattern, but should we be doing more to be on top of the market? My friend Ryan Lundquist joins me today to talk about his recent article on Sacramento Appraisal Blog called “Seven Things To Watch In Real Estate During a Pandemic.” This is a timely topic for all appraisers.

To listen to the 30 minute audio recording click here

My comment: Ryan’s “Seven Things” article had a huge number of clicks last week. If you missed it, click here

Read more!!

Posted in: adjustments, Fannie, Mortgage applications, Strange homes, webinars, weird properties

4-17-20 Newz: 7 Things to Watch in your Market – More Fannie Updates – Funny Fotos

NOTES TO READERS: To read my April 3 newsletter: Covid 19 Data Comps and-Values, with lots of science info relating to the pandemic, such as pandemics in the past, stages of a pandemic, personal tips, etc. go to www.appraisaltoday.com/coronavirus

For the previous two weeks I sent out two newsletters a week. Got too burned out. Only one newsletter this week, so it is long.

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Seven things to watch in real estate during a pandemic

April 14, 2020 By Ryan Lundquist

Excerpts:

1) Listings: We often think about listings increasing as a way to see the market changing, but right now many markets across the country are seeing fewer new listings. So at times change is best seen with less of something rather than more. It’s not a surprise to see fewer new properties during a pandemic, right?…

7) Prices: In real estate we are so obsessed with prices, but that’s really the last place to look to see the market. What I mean is change happens first in the areas above before showing up in sales stats a couple months down the road. In short, for now the slower pandemic trend hasn’t infiltrated sales price figures as of yet in Sacramento. This doesn’t mean the market is stable in every price range and location. All I’m saying is regional and county stats don’t show price declines right now. Normally I pull monthly price data, but I’ve switched to weekly in order to see the trend sooner rather than later.

To see the other 4 factors plus lotsa graphs and many appraiser comments , click here

Read more!!

Posted in: adjustments, appraisal classes, appraisal regulations, Coronavirus, desktop appraisals, Fannie, FHA, Freddie, FUN, real estate market, va

4-10-20 Newz: Fannie New FAQs; Appraiser Recovers From Virus; Risky Business

Fannie Mae COVID-19 Frequently Asked Questions – Selling Updated: Apr. 08, 2020

From Dave Towne:
On Wed, April 8, 2020, FNMA issued a new FAQ bulletin regarding mortgage lending and appraisals during the Covid-19 “modification” period.
Click here to download Dave’s PDF. I have extracted the FAQ questions relating directly to appraisals/appraisers. I suggest you print these 6 pages.
Q54 – Q60 have ‘new’ info appraisers should review.
NOTE: While this FAQ is written by FNMA, it also applies to reports which will be sold to FreddieMac – because both GSE’s are working cooperatively in terms of how appraisal reports are to be completed.
NOTE 2: If you are doing an assignment for FHA, USDA or VA, you need to follow THEIR instructions because they have different guidelines for report completion.
Link to original full 14-page Fannie document https://singlefamily.fanniemae.com/media/22326/display

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Appraiser/Educator Bryan Reynolds is recovering from COVID-19

I had a bit of a difficult time with this podcast. We like to think we’re invincible, immune, unaffected, but that’s silly. We are, at the end of the day, all vulnerable. This chat with my long time friend and partner, Bryan Reynolds, brought that realization home, in stark reality and made it tangible and personal.
People, we damn near lost Bryan. Please give this podcast a listen. I’ve posted it here, largely unedited. This podcast is the epitome of authentic.
Hal Humphreys
Partner Appraiser eLearning
My comment:Listen to this podcast!! I saw the last podcast live on March 26. Hal Humphreys was the moderator, speaking from his front yard. He said that Dave had coronavirus. I am so glad that he is recovered! To watch his webinars, go to https://www.youtube.com/channel/UClb6iDQvzQqj4GOiKSCp8EA

Read more!!

Posted in: appraisal business, appraisal regulations, Coronavirus, Fannie, FUN, humor, Mortgage applications

4-8-20 Newz: SBA Assistance – Inspection Survey Data – T.P.

SBA – $10,000 Disaster Loan Emergency loan/grant and Paycheck Protection Program (PPP)

Check to see if the SBA has issued a disaster declaration in your area. COVID-19 has been declared a disaster.

The two programs are very different. 

1. The Economic Injury Disaster Loan Emergency Advance – up to $10,000 loan – does not have to be repaid. For all appraisers. Sign up now! Appraisers reporting that it is very easy to do. They got their money quickly. Per SBA “within three days of a completed application by a qualifying business.”

2. Paycheck Protection Program – have to get from a bank that is doing them. Can be difficult to get now. See below.

An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.

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The Economic Injury Disaster Loan Emergency Advance – up to $10,000

This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid.

Apply for this now! 

For more info https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

To sign up. Covid19relief.sba.gov

Should you sign up for this? I did not think I was having any economic issues. I don’t do any lender apraisaals and am not exempt from stay at home. Then, I realized I am paying $725 per month for an office that I can only use for file storage and picking up mail. I can only do desktop appraisals. I don’t know if the IRS will accept them. I may be able to postpone them, but I have no idea for how long. I am applying today, after I go to my office and find the information I need.

For most appraisers, the future is very uncertain for lender work. Some are getting much less work because they will not do interior inspections. No one knows how long lenders will straighten this out. Or, maybe you’re thinking about not doing interior inspections, but will lose appraisal work until lenders shift to desktop and drivebys.

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Paycheck Protection Program (PPP)

An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. It must be done through a bank that participates in the program. Lots of information is required. 

This program is designed to help keep people employed by giving loans to businesses. It is being swamped with business that have closed. Drive down the street in your city or a shopping center and see how many businesses are closed. Large companies are shutting down. In California, many construction projects have been halted.

This program started April 3. Lots of problems as lenders are not sure about how to set it up.

A few tips for applying:

1. Most Important. Contact the bank where you have a loan or an account.

2. Check local social media. I got posts from alignable with some banks to check out.

3. Call banks. May take quite a few phone calls. Check the local newspapers for who is offering the loans.

I emailed the manager at my local bank. I have known him for over 30 years. I have had all my business and personal accounts there for over 30 years. They replied that were totally swamped with inquiries, but were only considering their own customers. It is now a branch of another Bay Area bank, which is relatively small.

For some appraisal companies, this allows you to keep paying employees. For example, you are doing non-lender work. This is not exempt in most states. Your business will be much lower. I am not sure about residential appraisal companies doing lender work that are very busy now.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp

Read more!!

Posted in: appraisal business, cat, Coronavirus, Fannie

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

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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.

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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…

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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.

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Interior Inspections: Tough Choices for Appraisers

More comments in workingre article here:

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

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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