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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

2-15-18 Newz//Fannie Appraiser Webinar, Magical Appraiser Wand, Refis Dropping

The Magical Appraiser Wand

By George Dell
 
Excerpt: Can you just give me some magical software which will calculate my adjustments?

I get asked questions like this often. Can you just show me how to do a graph a client wants? Can you just give me your class stuff so I don’t have to come all that way? So often, the question degrades into something like “Why does the regression software give stupid answers?” I pushed the magic button!

People do not like the answer. You’re paid to do an analysis, not wave a magic wand, or push a magical appraisal button. We have another name for that, it’s called an AVM.   In addition to a point value prediction, AVMs can be tested for reliability. This is called the FSD (Forecast Standard Deviation). The AVM. It gets results. It’s fast. It’s cheap. And it provides a measure of reliability – the FSD.

Why would a client want something slower and more expensive with no measure of reliability? Why hire a pesky appraiser?

Click here for the answer!!

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Posted in: adjustments, appraisal how to, appraisal waivers, evaluations, Fannie, Mortgage applications, mortgage loan volume, rental market, unusual homes

2-1-18 Newz//Fannie Selling Guide Update, Zillow sued, Cost vs. Value Remodeling

Fannie Selling Guide Update for appraisals

Announcement SEL-2018-01: Selling Guide updates

Two appraisal changes:
– Remove the requirement for a field review on certain properties valued at $1,000,000 or more.
– Require lenders to choose the most reliable appraisal when two appraisals are obtained for one property.

Also
– Detached Condo Projects
– Minor Litigation in Projects
Click here to read the announcement for more info

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Posted in: commercial appraisal, Fannie, hybrid appraisals, zillow

2 GREAT ways to get into appraisal trouble. Tales From Barry Bates

If you really WANT to get in trouble here are 2 ways to do it, (eventually) guaranteed to succeed

Advertise your uniqueness!
More important than earning a living, providing support for your family or
serving the general public is to let the world know who you really are!
When meeting a homeowner or commercial building owner for the first time,
take a few minutes to explain your facial tattoos, your exotic mode of medieval
dress and your political positions as shown by the 188 bumper stickers on your car. Some straights are freaked out by creativity, so it’s worth taking the time to
calm them down.

When I was Chief Appraiser for The Money Store, I got a call from a
prospective borrower in one of the northern rural counties of California. I had just
added another appraiser to the panel in an effort to improve coverage. The borrower reported that although the appraiser was pleasant of demeanor and appeared to be knowledgeable, there was no question that she was living in her car.

When I called her, I had to cite that stuff in USPAP that talks about inspiring trust of appraisers among members of the public, and told her to reapply to the panel when she would be able to present a more conventional appearance. I didn’t hear from her afterwards, but, sure enough, she was a duly certified California appraiser.

Pump that value!
It’s a “win win” for everyone! I mean, you’d think so, right? What refi borrower
complains about a high appraisal? The lender sure won’t complain. Even in
appraising for a loan to purchase, it will flatter the owner and facilitate the
borrower’s deal, right?

Actually, wrongamundo, Buckwheat. By far, the most frequent complaint I
saw while at BREA (California Bureau of Real Estate Appraisers) was inflation of value, tendered by the lender, the buyer, the seller, etc.

I recall one respondent, who appraised exclusively for VA lenders, assuring
me that he considered it his duty to make sure that if the veteran really wanted the property and his valuation could make it happen, he would find legitimate
comparable sales to support that sale price.

What was unclear was his understanding of the word “legitimate”. I guess it’s tough when another couple of grand is added to the price just for the VA guarantee, but doable, certainly, for someone with such a holy mandate.

As an 11-year Army veteran myself, I let him know that I appreciated his
devotion to cause, but I had to tell him that he was a crook. And that he should
reexamine his assumption of duty during his license suspension, during which he
had to find 25 hours of courses on ethics.

Editor’s notes: this is a very brief excerpt from Barry’s article in the December 2017 issue of the paid Appraisal Today newsletter. Click the graphic below for more info on the newsletter. Barry has had a wide variety of appraisal jobs over the past 40+ years, including a state regulator investigator. He is now retired from appraising but still giving his opinions!! Contact him at barrettbates@gmail.com

Posted in: bad appraisers, Barry Bates

1/24/18 News//New USPAP Q&A-Hybrids .Dying Appraisal Profession? .Cat Urine & Big Data

Is the Appraisal Profession Dying?

By George Dell
Excerpts: Yes. Appraisal as we know it is dying.
Can it be saved?  No.
So what should I do?  What should “we” do?

To answer these questions, we need to look at causes and conditions. Some of these are obvious.
– Judgment is good; Analysis is better.
– Human generalization is excellent; Computation is fast…

So what can we do? If we cannot be saved. If computers are faster. If we have complete data. If we too have software.  If we too can provide results instead of opinions…  Leads to an obvious question: Can an experienced appraiser do these things as well as, or better than those others?

Worth reading at:

Read more!!

Posted in: appraisal business, Appraisal fees, appraisal management company, Appraisal Standards Board, appraisal waivers, bpos, desktop appraisals, evaluations, Mortgage applications, mortgage loan volume, square footage, USPAP

1-18-18 Newz//Hybrid Appraisal Rejected, Scope Creeping, UsPaP False Assumptions

Scope Creep – Head’em Off at the Pass!

By George Dell
Excerpt: Why do we have scope creep?
Possible answers include:
– The reviewer or clerk has to justify their existence;
– There is genuine concern about something;
– The work should’ve been there in the first place;

It’s important to remember that our entire system of appraisal production and review is belief-based.  It must be “worthy of belief.”  We have no objective standards.  Your work must be subjectively “credible” in the mind of the reader.

Read this short, interesting blog post at:

My comment: George Dell writes regularly for Appraisal Today. His articles are much longer than his blog posts, often expanding on a blog post.

UsPaP – A few of the more obvious false assumptions

By Barry Bates

Excerpt from blog post

The appraisal client is always the intended user.

A lovely concept out in the ether somewhere, but hardly ever the case in practice. The client (who engages the appraiser) is a lending technician or AMC drone; the intended user is an underwriter, servicer or portfolio manager. (This assumes the fact that only about 10% of appraisals are ever done for anybody other than a mortgage company.)

To read the full post, click here

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Posted in: AMCs, appraisal business, Appraisal fees, appraisal how to, appraisal management company, hybrid appraisals, Mortgage applications, mortgage loan volume, USPAP

UsPaP – A Few More Obvious False Assumptions

By Barry Bates

The appraisal client is always the intended user.

A lovely concept out in the ether somewhere, but hardly ever the case in practice. The client (who engages the appraiser) is a lending technician or AMC drone; the intended user is an underwriter, servicer or portfolio manager. (This assumes the fact that only about 10% of appraisals are ever done for anybody other than a mortgage
company.)

Pretending that they’re the same person (based on the legal concept of a corporation as a person, which facilitates all kinds of evil) allows the left hand, which is handing out cash, to avoid confronting the fact that the right hand is removing money from the borrower’s savings account.

USPAP is intentionally not specific

Finally, the old TAF argument in support of USPAP that its lack of specificity
is only the result of trying to avoid “micro-management” of the appraisal process is just what we former Army wiretappers used to call “cover noise”. It screens from hearing the fact that as it stands, USPAP can be used either to exonerate or
execute an appraiser on political motives regardless of the issue at hand. That’s
why more procedural detail is needed, not less.

Appraiser Judy fails the geocompetence test when she gets a citation from
her state for not having a subscription to local MLS. Yet when appraiser Willie
walks when he fails to check online sources or MLS after the property owner assures him the property is not publicly listed for sale. This same thread of delusion seems to run throughout USPAP, undoubtedly promulgated by crusty old MAIs. If any carbon-based life form tells you something, it’s okay to believe it’s true without any further investigation. Just throw in an extraordinary assumption, even though it’s invalid because it’s impossible or unreasonable.

Another reason for more specificity is the utter failure of the HVCC /Dodd-Frank AMC experiment. Instead of being coerced by a mortgage broker,
today’s appraiser is systematically coerced by onerous documentation
requirements, intimidating email, multiple requests for reconsideration and
arbitrary blacklisting. Appraisal quality is depressed by AMC expropriation of what
was once 50% of a normal appraisal fee. Moreover, residential fees in general
haven’t changed for 20 years.

NOTE: This is a very brief excerpt from Barry’s article in the January 2018 issue of the paid Appraisal Today monthly newsletter. More excerpts coming very soon!!

Posted in: Barry Bates, USPAP

1-11-18 Newz//Is it jUSt PAP?,Terrible Real Estate Agent Photos

Terrible Real Estate Agent Photos

Just For Fun!!

Most Excellent Photos and Very Creative Captions!!
Very, very funny and weird!!
You just gotta see them! Cannot be described.

10 Homes for Under $100k

Here are a few:
1701 Cleveland Ave, Waco, TX Price: $97,000
1724 Myrna Ln, Memphis, TN Price: $85,000
94-6428 Palaoa Rd, Naalehu, HI Price: $92,000

Click on each one for the full listing info. They are not all fixers or tiny homes!!

Check them out at:

My comment: I want the Hawaii house ;>

Read more!!

Posted in: AMCs, appraisal management company, real estate market, USPAP, weird homes

Is it jUSt PAP?

By Barry Bates

Appraisal is not rocket science, but it’s been around for about 300 years and it worked pretty well when the principles were kept simple and the consequences for ignoring them were disastrous. It would also have been nice if individual lending institutions still had to hold their own loans into perpetuity.

The “Just Pap” is more unpopularly known as the Uniform Standards of Professional Appraisal Practice, which came into being after the last big residential mortgage greeding frenzy (the failure of S&Ls in a 17%-mortgage-rate environment during the late 1980s).

Before your friendly author proceeds violently to eviscerate this not-even-very-well-meaning document, let’s get a minor but nonetheless irritating question off the table. Now you have to pay $75 for a copy of USPAP when, as a matter of public law, it should have been free to read. The solution? The  Appraisa; Foundation put it out on the web where it’s free to read (uspap.org), but you can’t download it or search it effectively. So you still have to pony up the bucks.

My central thesis today, children, is still that a bunch of crusty old MAIs and soulless bank appraisers saw an opportunity in 1986 to create a bureaucracy that funds free trips to meetings where crusty old MAIs and soulless bank appraisers can assemble to get pleasantly drunk. This entity became The Appraisal Foundation, an organization designed to foster high appraisal standards that are written in weasel words even Donald Trump could circumvent.

It’s hard to know where to start; there are so many things wrong with USPAP. As an overview, suffice it to say that its structure appears to be designed so that over the long haul, most responsibility for bad loans can be offloaded to appraisers making less than $100K per year.

NOTE: This is a very brief excerpt from Barry’s article in the January 2018 issue of the paid Appraisal Today monthly newsletter. More excerpts coming very soon!!

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About Barry Bates

I have known him personally for over 30 years. He has a wide variety of appraisal “experiences” over the years, which he writes about. In his 42 years of appraising he has had different jobs, from a staff appraiser to senior management. He is lots of fun to chat with!

Barry would like to hear from you!! Send an email to barrettbates@gmail.com

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Want to read more of Barry Bates’ controversial, humorous and really Out There comments? Subscribe to Appraisal Today monthly newsletter!!

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To find out more about the newsletter, click the ad below.

Prices: 1 year subscription is $99, $89 for automatic renewals. Monthly and quarterly payments are also available (credit card only).

Posted in: USPAP

1-4-17// Newz .National MLS Database?, No college degree?, .AMCs in trouble?

A National MLS Database?

Excerpt: Instead of considering the consolidation of the governance and management structures of the MLS, thereby providing coast-to-coast cooperation among brokers, we should instead focus on MLS data and technology infrastructure, and support the movement toward a national database system.

This would create a vast information network available to application developers who, until now, couldn’t offer tools to agents and brokers without expensive and time-consuming customization for every individual MLS.

My comment: The author is vice president of Business Development for Realtors Property Resource® (RPR®), created by NAR. More info at www.narrpr.com . Very interesting and worth reading. Poor real estate data has been a problem forever. Non-standardized MLS data is a nightmare for appraisers. This database would be accessible to appraisers, CU, and AVMs I assume. Of course, we all know how accurate MLS data is…

No bath tubs?

Excerpts: For years, the common wisdom among both brokers and designers was that every home needed a tub. But changing lifestyles and the demand for more space are now driving some homeowners to swap out their tubs for chic, high-end showers.

There is no definitive data on whether ripping out a tub could harm resale value – or any way to quantify how many people are doing that – said Jonathan J. Miller, president of the appraisal firm Miller Samuel. But “for a young family, not having a tub is an issue,” he added, “so the risk of impacting the value rises as the apartment size rises.”

My comment: Just something to think about… I often see bath tubs that are seldom used. But rarely see a home with no tub.

Read more!!

Posted in: AMCs, appraisal business, Appraisal Qualifications Board, CU, data, Fannie, Mortgage applications, new appraisers, real estate market, unusual home
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