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Posted in: appraisal, bias, Fannie

Tags: appraisal, bias, Fannie

How Do Driveways Affect Appraised Value?

By Ann O'Rourke on December 10, 2021 / Leave a comment

What’s The Size of Your Driveway?

By Jamie Owen

Excerpt: It really depends on how the appraiser is looking at it. Are they reporting the width of the driveway, the depth, or how many cars can fit on the driveway?

Most appraisers reflect the width of the driveway. Why? For one thing, many lenders prefer the driveway size to be reported this way. This is likely because it is less subjective. For instance, if the appraiser reports the driveway size based upon the number of cars that can fit on it, what kind of automobile are they using for their measurement? After all, a driveway may be able to accommodate a larger number of smaller cars than bigger ones.

Does it affect value? As is the case with nearly every aspect of a home, the answer is, it depends.

For instance, in high-density neighborhoods where street parking is limited, the size of the driveway could make a difference in value. On the other hand, in other high-density neighborhoods, many homeowners may use public transportation. If this is the norm for the neighborhood, the size of the driveway may not have any impact on value.

To read more and see fun animated gif, click here

My comments: Worth reading. Lots of topics are covered. Check out the fun animated gifs, etc.

In San Francisco, for example, off-street parking is at a premium in many neighborhoods. My brother bought a house 25 years ago with no off-street parking (primarily single family homes). I warned him, but he really wanted the house. It was a hassle then, but now, it is very difficult to find parking as many neighbors rent rooms to tenants with cars.

A significant issue with ADUs is where will the car(s) park? Will they take up the neighbors’ on-street parking?

I moved to San Francisco in 1968 and worked in a lab 20 miles away. The closest parking was 2-3 long blocks away when I got home from work. I moved from Tulsa, OK, where there was lots of parking everywhere. I never lived in a place without off-street parking again!

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Appraisal Business Tips

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Posted in: adjustments, appraisal, appraisal business, george dell

Tags: adjustments, appraisal business, appraisal how to, forecast, George Dell, real estate market

Appraisals Obsolete Now or Later?

By Ann O'Rourke on December 3, 2021 / Leave a comment

Is Appraisal Obsolete?

By George Dell SRA, MAI, ASA, CRE

Excerpt: Obsolete! Such a harsh word. Can it be?

Is the problem convolution?

Does it mean I will soon be obsolete? Not needed? Not loved? Terrible. What can be done?

Yet all the little signs are pointing that way. “Automated” valuation models have much of the market, and continue to gain. Other valuation methods and appraisal exempted transactions continue to grow. Evaluations, desktops, hybrids, auto-measurements, non-appraiser inspections, broker opinions.

To read more, click here

My comment: Another different perspective from George Dell! Check out “Appraisal startup Aloft closes $20M Series A” above! Not the first, and not the last, appraisal-related company to get millions in funding. Who needs experienced field appraisers when we have AVMs, hybrids, etc.?

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Posted in: appraisal business, Fannie, FHA, liability, zillow

Tags: appraisal business, Fannie, FHA, liability, zillow

Fannie Requiring Appraisal Floor Plans Coming?

By Ann O'Rourke on November 26, 2021 / Leave a comment

Are Floor Plans in Your Future?

By Dave Towne

Excerpts: In the Selling/Servicer Guides of FNMA and Freddie Mac, both GSE’s identify a ‘sketch’ to be a diagram of the subject as measured by the appraiser which shows exterior walls, and includes the dimensions. That’s it. They don’t even say that room labels are needed, but most appraisers include those.

Including a ‘sketch’ in reports as an exhibit is an additional Assignment Condition, beyond what USPAP requires in Standard 2, per the Assumption and Limiting Conditions on the residential forms. Both GSE’s require a more detailed diagram including interior wall locations when interior design abnormalities are discovered, and reported – which they call a “Floor Plan”.

I’ve talked with representatives from both GSE’s recently. Their line of thinking, at the present time, is a “Floor Plan” should be provided as an exhibit in the appraisal report even though the report signing appraiser was not physically present at the subject property when data was gathered. Their line of thinking is also slanted to having third parties provide the subject property data, believing appraisers are more valuable as ‘analysts instead of as observers and detailers of the property characteristics.

Thus the evolution to the new 1004 (Desktop) and 1004 (Hybrid) report forms, with different Scope of Work and Assumption and Limiting Condition statements in each version. (These forms are in your software forms package now.)

To read more and watch the video, click here

My comments: Read this post, watch Danny Wiley’s remarks in a video, and read many appraiser comments. Quite a while ago, Fannie started requiring detailed floor plans. This did not last very long, but I continued doing rough floor plans manually. I still do them but do not include the floor plans in the appraisal sketch. It keeps me from missing a small room, bathroom, etc. Of course, when there are floor plan functional problems, I put the details in the appraisal sketch. In my area, tandem rooms are common (usually from additions). They cannot be included as bedrooms.

When I used to do relocation appraisals, I always included a full interior floor plan with walls and doors. This was standard practice in my area. Doing an interior floor plan with walls and doors takes a lot of time, both measuring and using my sketch software.

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2-16-17 Newz .Land surveys in 1784 .Common appraisal errors

Posted in: appraisal business, george dell, humor, liability, real estate market

Tags: appraisal business, George Dell, humor, liability

How to Respond to a Reconsideration of Value for Appraisers

By Ann O'Rourke on November 19, 2021 / Leave a comment

How to Respond to a Reconsideration of Value (ROV) Request

By McKissock

Excerpts: While the ROV process is an appeal process, it is not to be used for changing the value or altering other assignment results simply because someone is dissatisfied with the outcome. Similar to performing an appraisal assignment, your role as an appraiser is to respond impartially, objectively, and without bias to an ROV request.

When you receive a reconsideration of value request, there are proven ways to handle these requests, adhere to USPAP and applicable regulatory requirements, and preserve a rock-solid relationship with your client. Best practice is to respond in a professional manner, remain positive, respond accurately and timely, and always operate ethically.

Twelve tips for responding to an ROV request. Here are the first five:

1. Confidentiality

2. Pause before responding

3. Meet deadlines, if attainable

4. Take the ROV seriously

5. Start with a positive

To read about all the tips, click here

My comment: Comprehensive with good tips. Well written. Read this if you do ROVs.

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The First Appraisal – About 3,200 Years Ago

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Appraisal vs Zillow vs AVM which is best(Opens in a new browser tab)

Posted in: AMCs, appraisal, appraisal how to, FHA

Zillow Quits Buying Homes – Their AVM Did Not Work Well!

By Ann O'Rourke on November 12, 2021 / Leave a comment

A ‘Fail’ Stamp vector over a white background.

Zillow Quits Buying Homes – AVM Did Not Work Well!!!

Two appraisers comment – Jonathan Miller and Ryan Lundquist

Goodbye Zillow

By Ryan Lundquist

Some of the topics:

Failure despite massive price increases
Zillow losing isn’t about the market
The school of hard knocks
Public perception
Cannot smell the cats: I gave a quote to Money.com last week, and I was especially excited they used my “Zillow cannot smell if 20 cats live there…” line.

To read more, click here

My comment: I love the “20 cats” comment. I appraised a house with at least that many cats. They were on all the tops of dressers, cabinets, etc., Very Creepy! I still have nightmares about it sometimes. A volunteer owned it for a local animal shelter. She had a large outdoor enclosure. Did not smell, but…

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By Jonathan Miller

Zillow Offers As A Proxy For ‘Big Data’ Shows The Lack Of Qualitative Analysis

Yes, big data usually infers ‘quantitative’ analysis, as in “relying on numbers.” The Zestimate legacy of profound inaccuracy finally reached a devastating conclusion with the collapse of Zillow Offers this week and the loss of hundreds of millions in shareholder…

To read more, click here

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This Just In: The ‘A’ in ‘Zillow’ Stands for ‘Accuracy’

Excerpt: Yet it would seem unlikely that Zillow Offers used something completely separate and conceptually very different from their ‘Zestimate’ because it would be quite expensive and extremely difficult to keep a radical new valuation concept a complete secret. All we know at this point is whatever valuation methodology they used was a complete fail. And to go a step further their Zestimate valuation methodology has long been a complete failure in the accuracy department. But it hasn’t been a complete failure in the consumer credibility department at all.

To read more and see fun videos, click here

Zillow (in) accuracy(Opens in a new browser tab)

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Dr. Seuss House aka The Goose Creek Tower

What is “retirement” for appraisers?(Opens in a new browser

Posted in: appraisal business, AVMS, bias, zillow

Tags: appraisal business, bias, zillow

Appraiser Retirement?

By Ann O'Rourke on November 5, 2021 / Leave a comment

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Appraiser Retirement?

By An Anonymous Appraiser

Excerpt: …retired 2 months ago, and I am SO GLAD I did. I’ve had enough. I decided on an appraisal career because I found real estate, and especially the valuation of homes to be extremely fascinating and challenging, and although I had heard that the appraisal profession was making changes back 30+ years ago, I “assumed” it was becoming a more upstanding, professional occupation, in the eyes of the lenders, politicians and general public, similar in stature to doctors, lawyers and accountants. In other words, they would would hold the appraiser’s opinion via “trust in the professionals opinion”.

What we got, was 30+ years of complaints from the lenders and politicians who blamed appraisers for all of the lenders and political wrong doings. And the public believed them! Why? Because appraisers NEVER got together as an organization to support other residential appraisers! Oh yes, there was the Appraisal Society and the Appraisal Institute, of which I became a candidate, but when I realized that they catered to commercial appraisers, and recently to their own needs, I decided there was no reason for me to join. Besides when licensing came along, the license was the main criteria for selecting the appraiser.

To read more plus many appraiser comments, click here

My comments: Many appraisers are getting older and retiring now for various reasons.

I am 78 years old and have been appraising for 45 years. I love appraising!! (I have not done any lender res appraisals since 2005.) I have friends near my age who are still appraising and like it. They work for direct lenders mostly and do little AMC work.

What is “retirement” for fee appraisers? One of the great reasons to be a fee appraiser is choosing when, where, what you appraise, and whom you work for. In the past, I worked long hours 7 days a week on properties in a wide geographic area. It has been many years since I worked that hard. Many of us just fade away gradually ;>

I recently spoke with two 55-year-old female appraisers. They had both invested in real estate and were retiring early. I have known appraisers over the years who did this. Why aren’t there more? Risk avoidance, I guess. I invested in a duplex in 1986 ($120,000 purchase price). I am living there now after selling my large home. My tenants pay mortgage, insurance, and taxes. I shoulda bought more when the prices were way down here!

I have written about appraiser retirement in my monthly newsletter many times over the years. Be sure you have “tail” insurance to cover any e&O claims after you retire. Mine is free from my E&O company. My most recent article is from May 2021, “Retirement: To Stay or Not to Stay. That is the question!!” Lots of issues to consider. Tip: don’t start taking Social Security until you are 70. I get $3,235 per month now, before the cost of living coming increases. The maximum is $3,985 per month.

Appraiser retirement plans?

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Top Ten Reasons Why It Is Great to be an Appraiser Humor

Posted in: appraisal business, Appraisal Subcommittee, bias, real estate market

Tags: appraisal business, Appraisal Subcommittee, bias, real estate market

Haunted House Appraisal Adjustments

By Ann O'Rourke on October 29, 2021 / Leave a comment

Inspired by Italy, a Conical Home in Indiana

Excerpt: On the market for $424,900, the home consists of two main silolike buildings with shake conical roofs. Inside the round compound is a total of 3,111 square feet of living space.

The design was inspired by the trulli homes of the Itria Valley in Puglia, Italy. They were typically built from limestone and had conical roofs. The structures were chiefly designed as temporary shelters or storage areas in the 19th century. Today, they endure as charming residences in southern Italy. Back in Indiana, this home’s architect, Evans Woollen, combined details from trulli homes into his design.

“The house is a midcentury version of a 200-year-old village in Italy,” Landrigan says.

To read more and see lots of photos, click here

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Posted in: adjustments, appraisal forms, FHA, liability, real estate market

Tags: adjustments, appraisal forms, Fannie forms, FHA, liability, real estate market

Sewer vs. Septic for Appraisers – Don’t get into trouble!

By Ann O'Rourke on October 22, 2021 / Leave a comment

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Posted in: appraisal business, Fannie, Fannie Forms, Freddie, lender appraisals

Tags: appraisal business, Fannie forms, liability

Appraising Fixer-Uppers

By Ann O'Rourke on October 15, 2021 / Leave a comment

What About Those Fixer-Uppers?

Insights from a Seasoned Appraiser

By Steven Vehmeier

Excerpt: We’re all familiar with the term “fixer-upper.” For many different reasons, properties can come on the market in less-than-par condition. The degree and cost to cure become an issue to buyers and sellers, and a challenge for appraisers. At some point, it’s no longer “normal market value minus cost to cure equals as-is value.”

The terms “entrepreneurial incentidddve” and “entrepreneurial profit” are typically discussed in terms of investment property, but the principles involved can also be applied to the many fixer-uppers—whether the buyer is a “purely investor type” or an “owner-occupied investor type.” Maybe a couple of new terms should be discussed: “sweat equity incentive” and “sweat equity profit.”

To read more, click here

My comments: Most of my appraisals are for estates (date of death). I have never appraised a home that was ready for sale when the person died: staged, new paint and floor coverings, yards cleaned up, etc. I very seldom have any repair estimates or structural pest control or home inspection report.

I always assume the home is empty of furniture and “broom clean,” which I learned doing lots of REOs in the past. If a home is cluttered with personal stuff, the price will be lower. But, it can be fixed easily and inexpensively. If it is a mess, I tell the executor to call me when it is cleaned out so I can see what the walls, floors, kitchen countertops, etc. look like. If I can’t see, I disclose this in the appraisal and do my best to figure out a condition estimate.

Very few MLS listings here are not fixed up for sale. I look for “fixer”, “contractor”, “as is”, “handyman”, etc. in the description.

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