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9-27-19 Newz: Bifurcated Appraisals and Inspections; Abandoned Resorts – New CA Independent Contractor Law

Crowdsourcing Appraiser Data

By Jerin Harper, IFA, ASA, CREA

Excerpt: Just imagine the possibilities of having a hyper-local database…

If you are not in the business of data you will be out of business. I’m not sure if I heard this somewhere or not, but this mantra has been in my head for a while now. Being in the data business is essential for every business today. We see it across all industries where the companies that embrace data are still in business, and the companies that didn’t make that pivot are out. In our profession we saw Fannie Mae get into the big data business with the creation of CU. CoreLogic took their data business to a whole new level when they bought Alamode. One of my favorite examples is sports: just in the last several years data & analytics have completely changed the way football, basketball, and baseball is played— and those sports have been around for 100 years. It doesn’t matter what business you’re in, you have to be able to capture the right data and communicate it effectively.

I suggest that appraisers start crowdfunding their data.

To read more, click here, plus the many comments,

My comment: A never ending idea… Who “owns” the appraisal data? I remember the days of the CMDC (California Market Data Cooperative) where appraisers, including myself, shared their appraisal data, long before the Internet. It still exists and is owned by FNC. Their historic data is available.

Read more!!

Posted in: AMCs, appraisal business, AVMS, bifurcated appraisals, CU, Fannie, lender appraisals, Mortgage applications, USPAP, weird properties

9-20-19 Newz: Fannie Update – Domes – Low appraisals – Avengers

Fannie Mae September 2019 Appraiser Update

Sept. 13, 2019

Topics include:

– Forms for appraisers performing PDC and desktop appraisal

– Desktop appraisals, assumptions, and hypothetical conditions

– Locked rooms

– Consumer protections

– State board notifications

Only 5 pages. Easy to read and informative. To read more, click here

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Fannie Mae Appraiser Home Page

Everything Fannie In One Place!!

To read more, click here

Read more!!

Posted in: appraisal business, Fannie, george dell, Mortgage applications, real estate market, unusual home, weird properties

9-13-19 Newz: FRT issues – Why Suburbs Look the Same!

Fuggerei

In this truly magical place, rent hasn’t been raised since the year 1520! Just For Fun!!

Excerpts: After minting coins for the Vatican and making a name for himself as one of Europe’s greatest early entrepreneurs, Jakob Fugger (aka “Jakob the Rich”) turned his eye toward those in need. What emerged from this vision has persisted as the world’s oldest charitable social housing complex.
In the year 1517, construction began on Fugger’s vision for what would become the golden-walled enclave of Fuggerei, which he created as a way of providing affordable homes for day laborers, artisans and their families. Though it sustained heavy damage during a bombing raid in WWII, the community was restored to its pre-raid condition, where it has remained uninterruptedly inhabited since its founding in 1520. The city-within-a-city consists of private residences including 67 houses, 147 apartments, St. Mark’s Church, and an administrative building.
To read more, click here

My Comment: Wow!! Really gives me a perspective on rent control here in California and in my small city. Rents are increasing all over the country.

Read more!!

Posted in: Appraisal Foundation, Appraisal Qualifications Board, appraisal regulations, Appraisal Standards Board, bifurcated appraisals, evaluations, Fannie, fees, hybrid appraisals, lender appraisals, Mortgage applications, real estate market, rental market, Strange homes, unusual homes

9-6-19 Newz: Bidding Wars – Dumb Mistakes – U.S. Abandoned Places

Can Smart Appraisers Make Dumb Mistakes?

By George Dell, ASA, MAI, SRA

Excerpt: I am a smart and educated, award-winning appraiser. It is not possible for me to be irrational. Of course not. You can see that. I can see that.

A high IQ and education won’t necessarily protect you from highly irrational behavior—and it may sometimes amplify your errors. David Robson, in an Excerpt from The Intelligence Trap

Oh No! Who is this guy!? Doesn’t he know how smart I am? Why, even my peers have said I am smart. I pride myself on my critical thinking. Even my kids say that! What more proof do you need? Let’s get this straight: I am rational, smart, of high IQ and extremely educated, especially in my chosen field!

Recently, scientists have started to measure what things go with irrationality. There is even a name for this field of study, this measure: dysrationalia. The studies roughly parallel the studies of dyslexia and dyscalculia (difficulty in dealing with number things).

Understandable, Well Written and Interesting!! To read more, click here

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Posted in: adjustments, bifurcated appraisals, george dell, hybrid appraisals, Mortgage applications, mortgage loan volume, real estate market, weird homes, weird properties

8-30-19 Newz; 99.99% Price Drop – Curious Bathrooms – Amazon’s $105K House

Once listed for $1 billion. Sold for $100,000. What just happened?

Excerpt: A heated court battle, a last-second offer and a sparsely attended auction behind a fountain in Pomona — this chapter of the famed Mountain of Beverly Hills ends not with a princely sum but a sale price more like that of a sports car.

Touted as the city’s finest undeveloped piece of land, the 157-acre property redefined the luxury market when it listed for a record $1 billion last year. On Tuesday, it sold for a mere $100,000 at a foreclosure auction, a fraction of the $200-million loan outstanding on the property.

A markdown of 99.99%, of course, comes with some fine print. Any other buyer would have been on the hook to repay that loan — and this buyer has to eat that loss

To read more, click here

My comment: Quite a story!! Only in LA, of course!! FYI, I am in Northern CA… very different here. We think we are superior to LA ;>

Read more!!

Posted in: appraisal how to, AVMS, Mortgage applications, real estate market

8-23-19 Newz: Deminimus = $400,000 – Highest and Best Use – Fannie Cost Approach

Highest and Best Use – Residential Appraisers Need To Understand It!

Excerpt: There are many valuation products out there. CMA’s, BPO’s and AVM’s to name a few. What you will likely not see in those kinds of valuations, is the specific zoning class for the property being valued. Why?

With these types of valuations, a highest & best use (HBU) analysis is generally not made. However, if you hire an appraiser to value your home, we will perform this analysis. What is a highest & best use analysis? Why is it important in the development of an opinion of value? How is zoning involved?

To read more and see the fun animated gifs click here

My comments: My Most Frequent Residential Appraisal Rant!! I started at an assessor’s office in 1975. The First, and Most Important, Question was “What is the highest and best use?” In 1986 I started doing residential lender work. The form was just a check box for HBU. If you checked No, it was a big problem for the lender. Many residential appraisers don’t check the zoning, general plan, etc. One good way is to just drive around and see what is happening. For example, lots of small homes being torn down and McMansions being built. Or, lots of houses on a busy street converted to office uses. Or, a small house on a big lot with apartments all around it. A common residential issue is a possible lot split.

Don’t forget the General (Or Specific) Plan. It tells you what the city wants today and in the future for land use, which is not discussed in this article.

I have appraised a lot of older commercial properties for lenders, which often had a HBU different than the current use. I discussed it in my appraisals.

When there is a big difference in value between two appraisals, it is often due to a difference in opinion of HBU. Don’t get into trouble. Be sure to think about HBU!! If you’re not sure, contact an experienced appraiser, particularly one who does a lot of non-lender work and/or commercial appraisals.

In the Feb. 2017 issue there is an excellent article written for residential appraisers by Denis Desaix, “Residential Highest and Best Use Analysis: more than Just a “Check box” available to paid subscribers. See below.

Read more!!

Posted in: appraisal how to, deminimus, Fannie, Mortgage applications, unusual homes, weird properties, zillow

8-16-19 Newz: Refi Mania – Paper vs. Google Maps – GLA Split/Bi-level homes

Refis Way Up: Almost 20 Million Homeowners Could See A Mortgage Rate Drop

According to new data from the Mortgage Bankers Association, refinances have doubled since late. They’re now at their highest point since mid-2016.

The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume, rose 21.7 percent on a seasonally adjusted basis during the week ended August 9.

Freddie Mac shows the average rate on a 30-year, fixed mortgage is just 3.6% — a 15-point decrease from one week prior.

To read more, click here

My comment: Don’t work for cheap fees! Make money while you can!!

See below for the full MBA report on the refi boom.

Read more!!

Posted in: adjustments, appraisal business, AVMS, evaluations, square footage, zillow

8-9-19 Newz: Evaluations and USPAP – Zoning Codes – Inspection Standards?

9 Very Funny Quotes for the Self-Employed Appraiser

Just For Fun!!

Some great, very funny, animated gifs ;>

Here are a few comments:

“The crappy thing about being self-employed is I never believe myself when I call in sick.”

“Things people say: ‘It’s Friday!’ Things self-employed people say: ‘It’s Friday?’”

To read more, click here

My comment: We all need some appraiser humor! Something for everyone in this blog post!! Unfortunately, animated gifs usually don’t work well in these email newsletters. You Just Gotta See Them!!

Read more!!

Posted in: appraisal how to, appraisal regulations, Appraisal Standards Board, bifurcated appraisals, evaluations, FHA, Google, Mortgage applications, USPAP

8-2-19 Newz: Frank Lloyd Wright Fixer- Spreadsheet Shackles – Homes under $100,000

Spreadsheets: A Shackle to the Appraisal Profession? 

Excerpts: How can spreadsheet software hinder the profession? A Wall Street Journal article, and a presentation at the Appraisal Institute National Conference have similar stories. One addresses accountants, the other is about appraisers.

The 2015 AI meetings presentation: Will Appraisers Have to Learn to Use Real Analytics Software? was given by George Dell. The main point was that accountant’s software was primarily developed for record-keeping, mimicking paper columns and rows, with analysis a later goal. Other points are:

  • Validating and tracking data is difficult.
  • No built-in audit trails, nor tracking of changes.
  • Regulatory compliance is difficult to accomplish.
  • Susceptible to trivial human errors ETC.

To read more, click here

My comment: Read this article. I totally agree. I started using spreadsheets in 1981 for financial analysis. When I started my appraisal business in 1986, commercial appraisers were using spreadsheets for Discounted Cash Flow. I knew the many problems with spreadsheets’ reliability.

They are particularly unsuitable for statistics as they are not statistics programs. In my MBA program in 1979, I used SPSS for multiple regression analysis, connecting to a large computer.

Read more!!

Posted in: appraisal business, george dell, Mortgage applications, real estate market, statistics, unusual homes, weird homes, weird properties

7-26-19 Newsletter 25th Anniversary! – Appraiser vs. Zillow – $11 Million View

25th Anniversary of These Weekly Free Email Newsletters!!

On June 17, 1994, I sent out my first weekly email update to Tracy Taplin, Bruce Hahn, Tom Cryer, and John Warr. Bruce Hahn still subscribes. The topic was FIRREA/deminimus. I missed a few weeks (computer problems, traveling) but subscribers became “hooked” on their weekly news, jokes, rumors, and tidbits! The distribution list is over 17,000 appraisers now, and growing every day.

This newsletter started with my Compuserve account, then shifted to my personal email (Eudora) after the first web browser made the internet email much easier to use. I mostly had people write down their names and email addresses when I was teaching, speaking or doing my annual conference. It is very hard to figure out hand written email addresses!

I set up my website in 1998 and had an email form to fill out to subscribe. It took a lot of time to manually enter the names and email addresses. Keeping track of email changes was a nightmare. In 2003 I started using Sparklist to help manage the addresses but it was klunky to use and was getting very expensive. I got up to about 3,500 subscribers. In 2008 I started using Constant Contact, which is very affordable and easy to use. I put a signup form on my website home page. The number of subscribers increased rapidly and is now at over 17,000.

In the early years it had just a few paragraphs. By 2003 it was up to about 3-4 pages long. Since 2008 it has been about 4-5 pages, but was formatted to be much easier to read.

The topics have changed over the years, starting with FIRREA in 1994. Mortgage loans and appraisal orders have gone up and down significantly over the years. Significant mortgage broker pressures from about 1995 to the mortgage crash in 2008, AMC takover, Fannie’s CU in 2015, etc. etc.

I started my paid newsletter in June, 1992. In 2008, I switched to PDF-only and quit printing it. Lots more flexibility in length, plus a lot less expensive! Started with 12 pages. Now typically well over 12 pages, up to about 18 pages.

Note: I somehow forgot about it last month ;>

Read more!!

Posted in: adjustments, AVMS, deminimus, FHA, forecast, future, Mortgage applications, real estate market, weird properties, zillow