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Posted in: ANSI, appraisal business, desktop appraisals, real estate market

Tags: appraisal business, desktop appraisals, real estate market

Borrower Keeps Calling Appraiser

By Ann O'Rourke on May 13, 2022 / Leave a comment

Borrower Keeps Calling Appraiser

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What are Pass through Bedrooms for Appraisals

Posted in: appraisal how to, bad appraisers, bias, Freddie, hybrid appraisals

Tags: appraisal how to, Bad appraiser, bias, Hybrid appraisals

Green Home Appraisals – Ideas for Appraisers

By Ann O'Rourke on May 6, 2022 / Leave a comment

5 Tips for Appraising Green Homes

By McKissock

Excerpts:

1. Consider each home on a case-by-case basis

You must independently determine whether there is sufficient information available to develop a reliable opinion of market value for each individual property. That will depend on the extent of the differences between the green home and other types of houses in the neighborhood. It will also depend on the number of such properties that have already been sold in the neighborhood.

5. Compare improvements to those in the neighborhood

Any improvements should conform to the neighborhood in terms of age, type, design, and materials used for their construction. If there is market resistance to a green home property because its improvements are not compatible with the neighborhood or with the requirements of the competitive market because of adequacy of plumbing, heating, or electrical services; design; quality; size; condition; or any other reason directly related to market demand, address the impact to the value and marketability of the subject property.

To read more, click here

My comments: I have “Mediterranean” (mild) weather, without much solar. If you live in an area with high summer and/or low winter temperatures, there are probably more solar installations. Many classes are offered by various appraisal CE providers. Check with education providers, such as McKissock, the Appraisal Institute, and local offerings.

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Crazy Appraiser Stories!!

Posted in: adjustments, ANSI, desktop appraisals, lender appraisals

Tags: adjustments, appraisal how to, desktop appraisals, mortgage lending

Does A “Crazy” Neighbor Lower Value?

By Ann O'Rourke on April 29, 2022 / Leave a comment

Does A “Crazy” Neighbor Lower Value?

By Jamie Owen

Excerpts: It’s tax appeal season, and I’ve had several homeowners say that they feel their neighbors are negatively impacting the value of their homes for different reasons. Is that the case? Can that be the case?

The homeowners of one property stated that their neighbors are a nuisance. My clients said that one of their neighbors has people coming and going until late in the evening, most evenings. They also complained about there being noisy. Additionally, they claimed that the neighbor directly behind them is not a very nice person and is always causing neighborhood trouble.

Meanwhile, in a different neighborhood, a different homeowner claimed that their home was suffering a loss of value due to their neighbor’s home not being kept up and needing repairs and updates on the exterior. The neighbor’s property is an eye-sore.

The long-winded point I am trying to make is that the appraiser will need to find some evidence to support the claims that a neighboring property is really creating a loss in market value to its neighboring properties.

To read more, and see some fun animated gifs and videos, click here

My comments: As always, Jamie often writes about appraisal topics from a different “angle”! I have a crazy next-door neighbor also, who waits for me to come home to “attack” me with some perceived problem… since 1986 when I purchased the property.

Crazy Appraiser Stories

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AMC asks appraiser to remove photos of black cat

Posted in: adjustments, ANSI, Clubhouse, desktop appraisals, liability, real estate market, waivers

Tags: adjustments, CLUBHOUSE, desktop appraisals, real estate market, waivers

Crazy Appraisal Stories! We all have them!!

By Ann O'Rourke on April 22, 2022 / Leave a comment

Crazy Appraisal Stories!

Excerpts: Not Just Measuring Homes and Taking Pictures

I went to appraise a home for a movie producer in Brentwood, California. I knocked on the door, and one of the producer’s boyfriends opened the door and invited me in. He was completely naked. He told me that whatever I do, don’t let the cat out. As I went room to room taking photos, I met another naked boyfriend. He also told me not to let the cat out. As I went to the second floor of the house, I met the producer who was also naked. He told me again, “don’t let the cat out.”

I’m approaching the rear patio door to take pics of the rear of the house. Outside I see a beautiful pure-bred Persian cat. I know I didn’t let the cat out but I sure as hell better get it back in the house. I started chasing the cat in the rear yard. Finally, I grabbed it, but not before it ripped my blouse and caused my hands to bleed. Huffing and puffing from the chase, I tossed the cat back into the house and closed the door. A few moments later one of the naked boyfriends came over and said “that’s the neighbor’s cat. Get him out of the house.” I then had to chase the cat again. Finally, I caught the cat and put him out of the house. I was left there panting with a torn blouse and bleeding hands, thinking appraising homes is definitely not just measuring homes, taking pics, and typing up forms.

-Mary Cummins

To read more, click here

My comments: Just For Fun! We’ve all got these stories!

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Posted in: ANSI, desktop appraisals, forecast, future, humor

Tags: ANSI, desktop appraisals, Fannie, future

What is a “good” appraiser?

By Ann O'Rourke on April 15, 2022 / Leave a comment

8 Characteristics of a Successful Real Estate Appraiser

Excerpt: Here are two:

Unbiased

The ability to form an unbiased, objective opinion of value is absolutely essential in this line of work. According to this survey, many appraisers agree that this is the single-most-important trait you need to have as a real estate appraiser. In order to provide trustworthy results and uphold the integrity of the appraisal profession, you must be unbiased. Otherwise, you risk losing your professional reputation.

Analytical

It’s important for appraisers to be analytical, as each appraisal assignment will require thorough analysis and critical thinking.

To read more, click here

My comments: I was hooked on science in my first science class: high school biology. I studied biology and chemistry in college. I learned to be objective and unbiased, analytical, and open to almost any possibility. I have used these skills in appraising. I have always been curious, which keeps me up on what is new and other ways of looking at appraising a property. As far as I know, relatively few appraisers have science degrees.

Appraisers – The Past and The Future

Appraisal Business Tips

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The future of residential appraising(Opens in a new browser tab)

Posted in: desktop appraisals, Fannie, real estate market

Tags: desktop appraisals, Fannie, liability, real estate market

Appraisers – The Past and The Future

By Ann O'Rourke on April 8, 2022 / Leave a comment

Appraisers – The Past and The Future

The Path that Brought Us Here

by Richard Hagar, SRA

Excerpts: A wise man by the name of Jim Irish, former chief appraiser for the Federal Reserve Bank out of Topeka, Kansas, once told me something very profound: “The government is rarely proactive but always reactive.” Translation: laws, rules, and guidelines are usually developed after a problem smacks us upside the head. Since hearing this, I have found that it also applies to large enterprises.

Appraisers continued to tell lenders that they drove by each of the comparables used in the report. Years later, when lenders, Fannie Mae, Freddie Mac, FHA, and the VA spot-checked reports, they found out that the condition or location of many comparables didn’t match what was reported. So, the reactive response was to require the appraiser to affirm, under penalty of perjury (which stands to this day), and provide original photographs of each comparable.

Failure to inspect triggered client engagement letters stating the absolute requirement to personally inspect each of the comparables, provide original photographs, and create a system that inspects the photographs and can tell when a photograph is used twice or sourced from the MLS or county—clients know who’s lying to them and fees are lower because of it.

To read more, click here

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Prepare for Change

by Richard Hagar, SRA

Excerpts: In my career, I’ve been through four major changes in the market and our business, so what’s about to happen isn’t my first rodeo. I’m going to point out some things that will make a few people angry. However, I’m trying to help by pointing out how you can become better and profit from the change.

Waivers

Both Fannie Mae and Freddie Mac allow “appraisal waivers” (loans where no appraisal is required), and in the past, waivers were limited to fewer than 5% of the loans they purchased from lenders. However, their waivers have increased to 48% of their loan purchases over the past year. Imagine that 48% of the loans no longer require an inspection or appraisal.

Prior to 2022, Fannie Mae’s UAD system reviewed approximately 20,000 appraisals a day produced by approximately 40,000 appraisers. This indicates that appraisers were providing one appraisal every other day. Now, consider that waivers reduce the rate to an appraisal once every 4 days. Ouch.

To read more, click here

My comments: I have known Richard Hagar for a long time. He can sometimes be negative or even harsh but has good ideas

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Posted in: appraisal, appraisal how to, bias, Clubhouse, real estate market

Tags: adjustments, appraisal, appraisal how to, bias, CLUBHOUSE, real estate market

PAVE Appraiser Bashing

By Ann O'Rourke on April 1, 2022 / Leave a comment

PAVE Action Plan to Advance Property Appraisal and Valuation Equity

By McKissock, March 23, 2022

Two of the more controversial recommendations:

Excerpts:

Inform Federal Housing Administration (FHA) borrowers about the process to request a reconsideration of a valuation when the initial valuation is lower than expected.

Perhaps the most far-reaching recommendation for action is number 1.6, which states, “Develop a legislative proposal that modernizes the governance structure of the appraisal industry to improve transparency and public participation in the establishment of appraisal standards and appraiser qualification criteria, and to advance diversity in the profession.” Translation: Amend FIRREA to remove references to The Appraisal Foundation and transfer the Foundation’s authority to write appraisal standards and qualifications to the Appraisal Subcommittee or another federal government entity.

As of this writing, no proposed legislation related to the PAVE recommendations has been introduced. Because committees in both the Senate and the House are holding hearings, a bill (or, more likely, bills) can be expected very soon. Stay tuned.

Short and worth reading. To read more, including links to the full PAVE report and the summary, click here

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AEI’s Comments on PAVE Report

Excerpt: The Brookings and Freddie Mac studies are not based on rigorous data analysis. Most importantly, they conflate race with socio-economic status (SES), i.e. income, buying power, marriage rates, credit scores, etc. Race-based gaps found in the Brookings and Freddie Mac studies either entirely or substantially disappear when adjusting for differences in SES. Furthermore, our analyses show that similar gaps are present in majority White or White-only tracts across different SES levels, raising serious questions regarding a race-based explanation.

To read more, click here

My comment: American Enterprise Institute is a conservative “think tank” and has also supported the appraisers’ side on other issues.

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Congress Committee Meetings on Appraisal Bias

Strengthening Oversight and Equity in the Appraisal Process

Thursday, March 24, 2022

Senate Committee on Banking, Housing, and Urban Affairs

Appraiser Witness: James Park, Executive Director Appraisal Subcommittee

To watch, click here

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Devalued, Denied, and Disrespected: How Home Appraisal Bias and Discrimination Are Hurting Homeowners and Communities of Color Tuesday, March 29, 2022

House Financial Services Committee

Appraiser speakers:

Pledger M. Bishop, III, President, Appraisal Institute
David S. Bunton, President, The Appraisal Foundation
Dean Kelker, Senior Vice President and Chief Risk Officer, SingleSource Property Solutions, on behalf of the Real Estate Valuation Advocacy Association

To watch, click here

My comments: I was not able to watch either of these meetings before writing this newsletter.

Jonathan Miller attended the virtual March 24 meeting and had comments on the March 24 and 29 hearings. To read his comments, click here Scroll down to “James Park”

His blog post for today (usually sent around 11 AM EST) may have comments on the March 29 meeting. To read his comments, click here. Search for “devalued” (Hopefully, this link works.)

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Posted in: ANSI, bias, desktop appraisals

Tags: ANSI, bias, desktop appraisals, Fannie

Desktop appraisals – Lots of Info Available!

By Ann O'Rourke on March 25, 2022 / Leave a comment

Desktop appraisals – Lots of Info Available
Fannie and Freddie started using Desktops on March 19, 2022

Both a floor plan and a building sketch with dimensions and GLA calculations are required. ANSI is not required.

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March 2022 Fannie Mae Appraiser Update:

Link to March Appraiser Update, click here:

Link to “About Desktop Appraisals” PDF with 5 pages of information, click here Watch the Noble Appraiser explore the benefits of performing desktop appraisals:
The Desktop Appraisal Discovery Link to Noble Appraiser on desktops video, click here

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McKissock: Fannie Mae and Freddie Mac Desktop Appraisals: Your Questions Answered

Excerpts: In January 2022, Fannie Mae and Freddie Mac announced a desktop appraisal option that goes live in mid-March 2022. In various articles and opinion pieces, some claim that desktop appraisals will solve the appraiser shortage and modernize the appraisal process, while others claim that they will cause the demise of the appraisal profession.

Here are a few of the 16 questions answered

What is a desktop appraisal?
Does USPAP require me to complete an inspection?
What data sources are used for identifying the subject’s relevant characteristics?
Are there any state restrictions?
Must I be competent in the subject’s market area?
Are extraordinary assumptions allowed?
Does the limited scope of work mitigate my liability?
Won’t these types of valuations be risky for the lender

To read more, click here

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Bradford Software Webinar Floor Plans for Desktops – Discover Your Options with 7 Floor Plan Providers March 24, 2022 (1 hour, 34 minutes), with comments from Scott Reuter of Freddie Mac.

It was recorded and is available at https://vimeo.com/692030955

I did not have time to watch it yesterday.

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My comments on the above resources: What’s the best resource(s) for you?

Noble appraiser video is short (3 min. 34 seconds) understandable and very informative. Fannie Mae is “the source” for desktops. McKissock’s Q and A post is well written, understandable with short answers.

Bradford’s video has demos of 7 app providers for floor plans and sketches.

If lenders will use them much is very uncertain. The Covid desktops were never widely adopted. No one knows now which cell phone apps will be used, who will use them, and their accuracy (tested by an independent company). Minimum of an IPhone 12 Pro, with LIDAR camera. Appraisers who have tested them say the floor plans are good, but sketches with dimensions and floor plans may not be accurate on complicated home designs.

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Posted in: bias, desktop appraisals, Fannie, FHA

Tags: ANSI, bias, desktop appraisals, Fannie, FHA

Fannie ANSI Update – 19 New FAQs

By Ann O'Rourke on March 18, 2022 / Leave a comment

Fannie ANSI FAQs Update

Updated Standardized Property Measurement Guidelines – 19 new FAQs, 5 Pages

Excerpt from the short Fannie email sent 3-15-22 at 8 AM (Pacific time): “…Are you ready? We’ve updated the Standardized Property Measuring Guidelines fact sheet to include more answers to your frequently asked questions. Thanks to all the appraisers, AMCs, and lenders who submitted questions.”

My comment: There are no changes to the first page, including comps measured differently and the exception process. Links are included for references in Fannie’s Selling Guide in the Guidelines.

FAQ topics include:

Q5. When common practice in the local market differs from the ANSI standard, can the appraiser modify the subject’s GLA to conform to local custom?

Q8. The ANSI standard specifically notes that the definition of above and below grade could cause some houses to have no above-grade finished square footage.

How should appraisers report GLA in this scenario?

Q9. How will lenders know that appraisers used the ANSI standard?

Q15. Will appraiser adherence to the ANSI standard cause confusion when the subject GLA differs from other sources such as MLS or public record?

Q16. How should appraisers account for rooms located in above-grade finished areas that do not qualify as GLA under the ANSI standard?

Q18. The GLA of comparables available to appraisers may not be based on the ANSI standard. How should appraisers manage this issue?

Q19. How should appraisers value finished areas that the ANSI standard does not include in GLA, such as where the ceiling height is less than 7 feet?

To download the PDF to read the answers and other FAQs, click here

My comments: Read This Document! I have been waiting for an update to the one-page original Fannie document since it was first released about 3 months ago. There are many, many issues when using ANSI for lenders and AMCs. Appraisers sent many questions to Fannie and made comments during webinars with Fannie.

If you’re looking for a class, webinar, or other ANSI info, go to www.appraisaltoday.com/ANSI

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