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 over 15,000 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!!appraisal, appraisal business, Appraisal fees
Are Granny Flats Undervalued?
by Kathy Price-Robinson, The Appraisers Research Foundation
Whether you call them granny flats, in-law units, or something else, residential accessory dwelling units (ADUs) on residential properties excite municipal planners, homeowners, and others for social and environmental reasons. They are “green” by nature because of their small size and can provide great benefits to the owner.
But they can also perplex appraisers and other real estate professionals because of erroneous perceptions and various institutional policies that complicate lending on properties featuring ADUs.
To help clarify the estimation of value of residential properties with accessory units, researchers Martin J. Brown and Taylor Watkins conducted a study to test an income-based approach to valuation of properties with ADUs.
My comment: I appraise these types of units often in my city. Typically they are not legal. I consider them similar to detached bonus rooms, offices, guest quarters. If legal, the income approach would work to determine the added value of the ADU. Of course, income from airbnb, etc. vs. “regular” rentals is another big issue. The article does not address non-legal ADUs, the vast majority of them. FYI, The Appraisers Research Foundation has been around for a long time and regularly publishes (and gives grants for) research papers. For more info, go to http://www.appraiserresearch.org/ To see their other research, click on Research Results in the top menu bar.
Poll: On average, how long does it take you to complete a 1004 interior inspection appraisal report, including inspection and drive time?
www.appraisalport.com survey. This week’s poll is C/R fees in your area. Maybe future polls will ask about time required before HVCC and typical AMC fees in your area.
My comments: For many appraisers, driving time is long. Two years ago I started working almost exclusively in my small town. Driving time is very low. However, I very seldom appraise tract homes. My appraisal reports are very similar to pre-HVCC. I average about 5 hours per appraisal.
WHAT DO YOU THINK? POST YOUR COMMENT, AND READ OTHER COMMENTS AT WWW.APPRAISALTODAYBLOG.COM !!
8 homes under $100,000/One home for $1
8 homes under $100,000
in FL, OH, WI, NY, TN, etc.
My comment: no Detroit homes under $10,000… Nothing from CA. We do have some mountain/rural areas with low priced homes, but many under $100,000 except bad fixers.
The Odd Tale of the $1 Historic Home That No One Wants
You’ve heard it before, but we’ll say it again: The San Francisco Bay Area is a pricey place to live, where even decrepit shacks command six-figure sales.
But what if we told you there’s a Bay Area house for sale-for a mere $1? And what if we added that no one seems to want it? Not yet, anyhow.
Let’s ponder the price for a moment. A single-family house for a dollar. Less than a bottle of beer. Cheaper than a cup of coffee. A steal compared to bus fare.
My comment: Typical home prices in Hercules are under $500,000. A good price for the Bay Area!! Of course, it is a historic home fixer that has to be moved ;> It was a “company town” for a long time. The Hercules plant opened in 1881 and began producing dynamite. Dynamite manufacturing was ended in 1964.
NOT MUCH NEWS IN THE PAST TWO WEEKS. TIME FOR SOME FUN AND STRANGE PLACES!!
Funny listing photos
Just For Fun!! As we all know, listing photos are supposed to show what is good about a property (if you want to sell it). If there are no kitchen and bath photos, they have not been updated, etc.
Falling Car of Bordeaux, France
This Bordeaux parking garage has 712 indoor spaces, and one outdoor.
An early 1960s-era Mark 2, in British racing green, hangs precipitously over Cours Victor Hugo in central Bordeaux. Luckily, no Jaguars were harmed in the making of this parking lot.
Vanadu Art House – Hyattsville, MD
An intricately designed junk art house with four extravagant junk art cars hidden in the suburbs.
Ladybug Building in Milwaukee, MN
The bugs crawling down the front of this office building are almost as big as a ’68 VW Beetle.
In the December 2016 issue of the paid Appraisal Today
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– 2016 year-end tax planning for appraisers. What you can do now to save money on your 2016 taxes!! One good tax tip more than pays for your subscription!!
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– Practical tips for dealing with complex residential appraisals By Joe Lynch. A very good article with case studies and lots of tips. Something useful for all appraisers. I got some good ideas myself. Even after 40 years of appraising there is always something to learn!!
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Modernizing Appraisals Hearing
I watched this live 2-hour: Wednesday, November 16, 2016 (10:00 AM) – Subcommittee on Housing and Insurance (Committee on Financial Services) Hearing.
I had planned on writing an article for my paid newsletter about it. But, I could not think of anything much to say, even after reading the prepared testimonies and watching it again. The people testifying said nothing new. The legislators did not have much to say either. When I write an article I need a “hook” or something that makes it relevant to appraisers. Unfortunately, I could not find a good hook. Maybe you can. There were lots of suggestions, but no conclusions.
It is interesting to watch, to see what those giving testimony said and comments from the legislators. Watch it here:
Links to the prepared testimonies and lots of appraiser comments:
Several of those who posted comments mentioned that it is worth watching. I recommend watching it also as it goes over many appraisal issues and listen to comments from the committee members.
As of early 11/22/16 there were 3,162 views. Lots more than most of the other House Subcommittee meetings, probably mostly appraisers.
Fannie’s Property Inspection Waiver starts 12-10-16
No one really knows how many loans will be affected. Below are some links. The latest news is that as of January 1 2017, Fannie will not be requiring a fee for the PIWs. Underwriters are looking forward to having fewer appraisals to review.
Trump Treasury pick: Fannie Mae and Freddie Mac will be privatized – Steve Mnuchin tells Fox Business: “We’ll get it done reasonably fast”
Excerpts: Rather than be wound down, as some including another rumored choice to lead the Treasury, Rep. Jeb Hensarling, advocate for, Mnuchin said the government-sponsored enterprises will be taken out of “government ownership,” restructured, and privatized.
If the government were to release the GSEs back into private hands, it would be an absolute boon for the hedge funds that bought Fannie and Freddie stock when it was trading at pennies, betting that privatization may happen again in the future.
As it stands now, the government holds all of the senior stock in the GSEs, but the other GSE stockholders, many of whom sued the government for sweeping all the GSEs’ profits into the Treasury Department’s coffers, could stand to make a fortune as well.
As Timiraos notes in his tweet, Fannie and Freddie’s stock shot up on the news of the day, both up more than 30% as of 12:30 pm Eastern
My comment: I have no idea what this means for appraisals. But, I shoulda bought some F&F stock ;>
More commentary on the anticipated GOP battle at:
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, go to www.mbaa.org
Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to https://www.appraisaltoday.com/products.htm or send an email to firstname.lastname@example.org . Or call 800-839-0227, MTW 8AM to noon, Pacific time.
Mortgage applications decreased 9.4 percent from one week earlier
WASHINGTON, D.C. (November 30, 2016) – , according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 25, 2016. This week’s results included an adjustment for the Thanksgiving holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 9.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 38 percent compared with the previous week. The Refinance Index decreased 16 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.2 percent from one week earlier. The unadjusted Purchase Index decreased 34 percent compared with the previous week and was 3 percent higher than the same week one year ago.
The refinance share of mortgage activity decreased to 55.1 percent of total applications, the lowest level since June 2016, from 58.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 5.7 percent of total applications, its highest level since June 2016. The average loan size for purchase applications reached a survey high at $312,400.
The FHA share of total applications decreased to 10.4 percent from 11.7 percent the week prior. The VA share of total applications decreased to 11.7 percent from 12.5 percent the week prior. The USDA share of total applications remained unchanged at 0.8 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since July 2015, 4.23 percent, from 4.16 percent, with points increasing to 0.41 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to its highest level since July 2015, 4.18 percent, from 4.04 percent, with points decreasing to 0.29 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to its highest level since July 2015, 4.00 percent, from 3.90 percent, with points increasing to 0.44 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since October 2014, 3.48 percent, from 3.35 percent, with points increasing to 0.33 from 0.32 (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 3.23 percent from 3.24 percent, with points increasing to 0.44 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate increased 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.Posted in: appraisal, Fannie, forecast, Freddoe, lender appraisals, Mortgage applications, mortgage loan volume, unusual homes
Poll: On average, how long does it take you to complete a 1004 interior inspection appraisal report, including inspection and drive time? www.appraisalport.com survey. This week’s poll is C/R fees in your area. Maybe future pools did will ask about typical AMC fees or how long it took pre-HVCC.
My comments: For many appraisers, driving time is long. Two years ago I started working almost exclusively in my small town. Driving time is very low. However, I very seldom appraise tract homes. My appraisal reports are very similar to pre-HVCC. I average about 5 hours per appraisal.Posted in: appraisal
Thanksgiving – What are you giving thanks for?
What am I thankful for this year? Good health. I always say that the richest person in the world would give everything they owned for good health. My health is better today than it was 20 years ago, in my 50s. I lost 40 pounds, workout every day, and walk with a friend. One of my brothers died in June at the age of 65 (liver failure due to hepatitis C). There will be an empty plate at the Thanksgiving dinner table. I am grateful every day that I am alive.
Modernizing Appraisals: A Regulatory Review and the Future of the Industry
I watched this very interesting live 2-hour session Wednesday, November 16, 2016 – Subcommittee on Housing and Insurance (Committee on Financial Services) Hearing.
I usually check email, etc. when listening to something like this. Not this time. I tried doing one email and lost a few comments. I feverishly scribbled 16 pages of notes.
Here are a few tidbits:
- Very large room with speakers (and some other people in the back) and the Congress members on the other side. Empty seats in the middle.
- The Usual Representation: Appraisal Institute, ASC, AF, NAHB, a group helping people with foreclosures, and Joan Trice. Each with their own agenda except for Joan Trice, the author of the (in) famous appraisal regulatory graphic that I put in last week’s newsletter.
- The Big Issue – appraiser shortage affecting consumers – takes longer to close – FHA switch to certified, low fees, long training, lenders not allowing trainees to sign, etc.
- Lots of anti-AVM comments from congress persons mostly Federal vs. state regulations. Too many appraiser regulators.
- Each group had an agenda from its organization, of course, except Joan Trice.
- Big shortage of appraisers in rural areas. Congress person said there were no appraisers available in his county with a population of 25,000 to 35,000.
- No mention of Trump’s plan to dump Dodd-Frank. Way too uncertain and controversial, I guess. No questions from the other people in the room.
I will write up my full report and analysis in the December issue of Appraisal Today, including a few humorous quips, which are buried in my notes somewhere. The Big Gorilla, Fannie Mae and its CU, was not speaking to answer the AVM and data questions
Would You Cook in One of These Wacky Kitchens?
Take a break and check out these weird kitchens, including links for more info. FYI, the Flintstone house was listed but never sold and is not on Airbnb. Spend a night there!!appraiser shortage, Freddie, weird homes, zillow
How Man Caves Took Over America’s Basements
A man cave usually develops in spare rooms, such as bedrooms, offices, finished basements, or recreation rooms. The garage, another traditionally masculine space, is more often a workshop or place to make repairs. Its connotation with work (often frustrating and unsavory as any viewer of Home Improvement can attest) as well as its thermal issues (it’s rarely cooled or heated like the rest of the house) demarcate it from the man cave, an interior space.
While men have always had their sacred spaces in the home such as the garage or study, the domesticity of the 19th and early 20th century overall implied that the home was, of course, the woman’s place. In the previous centuries, men sought refuge outside the home in establishments such as gentlemen’s clubs (think more country club than strip club), and male-only social clubs and establishments such as the Freemasons.
Very interesting, especially the history!!
My comment: I live in California, where there are few basements. I do see garage “man caves”. But, they are not as fixed up as basements, mostly with a tv, beer fridge and some tools. Sometimes I see bedrooms set up as computer rooms.
Collection and Verification of Residential Data in the Sales Comparison Approach APB Valuation Advisory #8
Voluntary Guidance on Recognized Valuation Methods and Techniques:
My comments: This is advisory and not part of USPAP. Finally the Appraisal Practices Board has 48 pages of practical advice for practicing residential appraisers, the vast majority of appraisers. It discusses what different types of clients want, such as Fannie, VA, Rels, relocation, data, data collection, CU, etc. Scope of work examples are included. The last 17 pages are about verification. Worth reading.adjustments, appraiser shortage, data, Mortgage applications, mortgage loan volume, weird homes, zillow
2016’s Best Small Cities in America
Small-city dwellers enjoy tighter networks, shorter commutes and an abundance of land, just to name a few advantages. Granted, there are tradeoffs such as perhaps fewer restaurant options or shorter business hours. But one of the best perks of living in a city with a relatively smaller population is cheaper cost of living – generally speaking, that is. According to the Economic Policy Institute, a two-parent, two-child family would need to earn $49,114 a year “to secure an adequate but modest living standard” in Morristown, Tenn., compared with $106,493 in Washington.
So which small cities outshine the rest? WalletHub’s analysts compared 1,268 cities with populations between 25,000 and 100,000 based on 30 key indicators of livability. They range from “housing costs” to “school-system quality” to “number of restaurants per capita.” Continue reading below for the winners of the top spots, expert commentary and a full description of our methodology.
My comment: Check your city – mine was listed!! But, did not rate high on cost of living with a median home price of around $800,000… But, you can see the mayor at the grocery store to complain about potholes ;>
Wells Fargo agrees to $50 million settlement over homeowner appraisal fees
Wells Fargo & Co (WFC.N) has agreed to pay $50 million to settle a racketeering lawsuit accusing it of overcharging hundreds of thousands of homeowners for appraisals ordered after they defaulted on their mortgage loans.
The proposed settlement, which requires court approval, was disclosed in a filing on Friday in an Oakland, California federal court. If approved, it will resolve nationwide claims that Wells Fargo charged much more than it paid for third-party appraisals, exploiting borrowers who could least afford it and driving them further into default.appraisal business, Appraisal fees, Collateral Underwriter, Fannie, fees, Freddie, future, Mortgage applications, mortgage loan volume, UAD, weird properties
The Coolest Empty Buildings in America
They’re weird, amazing, and available.
If you’ve got a few million bucks to play with, you’ll find that the country is littered with remarkable empty structures in various states of disrepair, just waiting for enterprising new owners with big dreams and deep pockets. Here are five of our current faves.
Here are a few:
Miami Marine Stadium: Miami, Florida
“Superman Building”: Providence, Rhode Island
Michigan Central Station: Detroit, Michigan
Fannie’s Property Inspection Waiver (no appraisal) effective 12/10/16 for all lenders
Notice dated 10/24/16. I suspected that this was where Fannie was going with UAD and CU. Refis only.. for now. $75 to waive the appraisal requirement. Fannie has been testing it for awhile with some lenders. You may see this referred to as “Day 1 Certainty”, the name Fannie has chosen.
Link to the 2 page fact sheet: https://www.fanniemae.com/content/fact_sheet/property-inspection-waiver-fact-sheet.pdf
Thanks to Dave Towne for this very interesting news!
My comment: I will have an article on this topic for my November newsletter, out November 1, including relevant details and what this means for you. Very interesting.
WHAT DO YOU THINK? POST YOUR COMMENTS AT www.appraisaltodayblog.com !!appraisal business, Collateral Underwriter, Fannie, Mortgage applications, mortgage loan volume, UAD
Notice dated 10/24/16. I suspected that this was where Fannie was going with UAD and CU.
Refis only.. for now. $75 to waive the appraisal requirement.
Fannie has been testing it for quite awhile with some lenders. You may see this referred to as “Day 1 Certainty”, the name Fannie has chosen. They are also waiving reps and warranties (buy backs) so it will be very popular.
9 Amazing Things Disguised as Boring Things
Look twice-these seemingly mundane objects are hiding something.
Narnia hid behind a wardrobe. Doctor Who’s Tardis was disguised as a blue police call box. With no signage and no flags, these out of the ordinary things are hidden away disguised as something utterly banal. In some cases, these things are camouflaged on accident; in others, they are secreted away so that only those in the know can find them.
Either way, the world is full of seemingly mundane places that are more than meets the eye. It reminds us to stay curious-one has to always be on the lookout for wonder. Here are nine places in the Atlas that may seem boring at first glance but are actually amazing once you take a closer look.
Here are a few:
1. Brooklyn Townhouse Secret Subway Exit
3. Mystery Soda Machine – insert 75 cents and see what you get
4. The Lonely Parking Meter
The only parking meter in Winters, CA
My comment: Just For Fun!! We all work in the field and discover strange things. This article will make me look closer at what I see ;>
Disciplinary Process-How It Works, Your Rights & Likely Outcomes
by Robert Weinstock, JD, MBA, CBA, CVA
While the number of licensed real estate appraisers nationwide has decreased, the number of complaints filed against appraisers has increased. For example, in my home state of California, complaints against appraisers have increased by 40% even though the number of appraisers has declined, according to the California Bureau of Real Estate Appraisers (BREA)….
The following is an actual 2015 disciplinary action against an appraiser in which the appraiser lost his license and was required to reimburse the state for its investigation and prosecution costs in the amount of $125,828. In addition, if the applicant should care to reapply for a new license, he shall be required to pay an additional $115,828.Mortgage applications, mortgage loan volume, state appraiser regulators, Strange homes, unusual home, unusual homes, weird properties