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Fannie Update on Covid alternative appraisals

Fannie Update on Covid alternative appraisals. Excerpt: Through mid-May, about 15% of Uniform Collateral Data Portal® (UCDP®) appraisals completed after our announcement used the flexibilities, either desktop or exterior-only. As you know, circumstances vary widely across the country, and the uptake of the flexibilities reflects this. The highest percentages of appraisals using the flexibilities are around 40% in some northeastern states, while the lowest percentages are around 10% in some of the less impacted states…

We found that appraisers have used the flexibilities correctly about 90% of the time. Appraisers have done a great job identifying external obsolescence for desktops and exterior-only appraisals, as well as leveraging their local knowledge, maps, aerial photos, and other data sources. We’ve been pleasantly surprised to find that, although not required, about 35% of nontraditional reports include a sketch pulled from prior reports, assessors records, or other sources. Also, the supporting comments in the nontraditional reports have been even better on average than those in traditional reports.

Worth reading. 5 pages and well written. Also includes comments on “one mile rule” and flood zones. To read more, click here

My comments: There are very few of these done in the Bay Area. 10% sounds about right. However, now we are now in a major virus surge in some states – opened too soon and people in some areas did not do social distancing, hand washing and wear face coverings. Use of the alternative reports may increase in some states, and decrease in the northeast.

These appraisals are not easy to learn how to do, and are very different than doing full 1004 with interior inspections. In the June issue of the paid Appraisal Today I have lots of information on them, including useful references. See the ad below.

Covid-19 and Appraisers FREE Newsletter(Opens in a new browser tab)

Click the link below for a church converted to a home, Value Difference Between Streets, Avenues & Boulevards…?, Millions of American Homes at Greater Flood Risk Than Government Estimates, New Study Says, random thoughts of an appraiser, mortgage origination stats. 

Read more!!

Posted in: adjustments, Coronavirus, Fannie, liability, Mortgage applications, mortgage loan volume, real estate market, unusual home

Reconsideration of Appraised Value

Reconsiderations of Value and What to Do About Them

By Danielle Lopez

Excerpt: It is Tuesday morning and I have my day planned and timed between reports that are due and morning inspections. I’m just about out the door when I receive an email notification for an appraisal I submitted last week. The notes indicate “Reconsideration of Value.” You know the drill, I’m sure.

Since I just completed this appraisal it was fresh in my mind. I recall the steps, time and attention to detail to locate the appropriate sales. I review my appraisal, and the unadjusted range of sales is $740,000 to $761,000, with adjusted prices of $740,000 to $756,000. I utilized three closed sales and two active listings/pending sales to support my opinion of value. The sales comparison approach is tight, bracketed and the report has an additional forty-eight pages of supporting documentation and explanation for the reader.

I open the notes from the AMC that say: “Please review the attached sales and indicate why they were not utilized in the appraisal.”…

To read more about this, click here

What Is An Appraiser?(Opens in a new browser tab) Humor

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

51 Ways to Cut Appraisal Costs and Increase Cash Flow(Opens in a new browser tab)

To read about lots more appraisal topics, click read more below!

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Posted in: adjustments, AMCs, appraisal business, Mortgage applications, real estate market, unusual homes, weird properties

Strange Appraisal Terms

Excerpts: Since space is the only place that is pandemic free, I thought it would be fun to try to apply space and science fiction terms to real estate. Let’s take a little break from the stressful atmosphere we are experiencing here on earth and have a little fun. Perhaps you can think of more.

Here are two:

Orbit– The path homeowners take whilst following the appraiser around the home, trying not to follow too closely by maintaining at least six feet of distance. (Probably taking pictures of the appraiser in the PPE)

Blackhole – The place where Zestimates go after being debunked by reality.

To read and see lots more Strange Appraisal Terms, click here.

My comment: I love Jamie Owens’ blog posts! Unbelievably creative!! Plus, outstanding/strange videos, animated gifs, etc. etc. I have been a big SciFi fan since high school and used space videos in my experimental music band for many years.

More Appraisal Humor

Appraisal business tips

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Posted in: appraisal business, bifurcated appraisals, Coronavirus, humor, liability, va, weird homes

Terrible Real Estate Agent Photos for Appraisers

Just For Fun and Oddities!!

If M C Escher had tried interior design.

<< 4 bedrooms, 2 bathrooms, and extensive opportunities for open plan off-roading.


Inexplicably bad property photographs.

It’s that simple

Don’t miss the Very Funny Captions!!

 

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Appraisal Humor

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Posted in: adjustments, AMCs, appraisal, Fannie, FUN, humor, Mortgage applications, statistics, unusual homes, weird homes

What is most often overlooked by appraisers?


 

 

 

 

Excerpt: We recently asked our appraisal community, “What’s the ONE thing that is most often overlooked by appraisers?” We received a wide variety of answers ranging from big-picture oversights to specific details. The most common answer we received was “Highest and Best Use.”…

Highest and Best Use (HBU)

This was the top answer, which was written in by about 8% of survey respondents “First question when doing an appraisal is the highest and best use. If there are two very different opinions of value on a property, different HBU is often the reason.”…

Obsolescence

Obsolescence is another item mentioned by multiple survey respondents. Appraisers cited both external obsolescence and functional obsolescence as being frequently overlooked.

External obsolescence for the subject property – When I’m reviewing appraisals, I see this more often than other oversights. When I was performing retrospective reviews for FNMA, their biggest complaint was that appraisers did not point out external obsolescence for the subject and/or its impact on marketability (if there was an impact).”

Functional obsolescence – Appraiser focus has changed over the years as subject functionality has changed.”

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Appraisal Humor

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Posted in: adjustments, appraisal business, Appraisal fees, bifurcated appraisals, commercial appraisal, Coronavirus, desktop appraisals, Fannie, fees, lender appraisals, Mortgage applications, unusual home, USPAP, weird homes

Swiss guesthouse built into side of mountain Appraisers and Houses

This 170-year-old Swiss guesthouse built into the side of a mountain is best accessed by a cable car.

Excerpt: The guesthouse and restaurant is quite literally built into a cliff, and its back wall is made up of the rock itself.

Its precarious perch makes it difficult to get to, and it’s only accessible after a steep hike along a mountain path or via cable car (the piano in the living room was brought in by helicopter). It’s been around for 170 years, and was originally a home for farmers; the guestbook goes back to 1940.

To check out the interesting fotos and brief description click here

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Posted in: adjustments, Coronavirus, Fannie, lender appraisals, Mortgage applications, real estate market, unusual home

Defiant vs. Compliant Appraisers?

Excerpt: Believe or don’t believe. Is there a parallel between appraisals and how people respond to pandemic warnings? Defiant vs. Compliant Appraisers?

Appraisal reviewers decide whether an appraisal is “worthy of belief” (“credible”) or not. Similarly, people decide whether to believe in the need for public health orders.

Steven Dinkin (president of the National Conflict Resolution Center) recently had some observations on the public’s response to the pandemic, dividing people into two groups: defiant or compliant. What is interesting is that each group has a belief that their thinking is the right thinking. Their opinion is the right opinion.

Let’s look first at the “defiants.” Some of these are defiant out of economic necessity – money. The need to eat can trump health risk. (Especially if the health risk is to other nameless strangers. “They have to take care of themselves.”) Guess what – food on the table comes first…

To read more, click here

My comment: I see a lot of appraiser comments online on both sides of controversial issues, including sometimes “sharp words”. Fortunately, almost all online appraisal places I go are moderated. Very negative or “flaming” posts are deleted. Sometimes appraisers are removed from the group after a few warnings.

The June issue of the monthly Paid Appraisal Today will have an article on this topic: “How to connect with appraisers online. What’s the best way for you?” I last wrote about this in January 2018. There have been a lot of changes since then!!

George Dell had a much longer article in the May issue of the Paid Appraisal Today.

Strange Appraisal Terms(Opens in a new browser tab)Humor

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Which Appraisal Clients are used the most?(Opens in a new browser tab)

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Posted in: adjustments, appraisal how to, FHA, george dell, Mortgage applications, mortgage loan volume, real estate market, Strange homes, unusual home, weird homes

Value, Accuracy, and Misleading for Appraisers

On Value, Accuracy, and Misleading…and How They are Different From What You Might Think!

By Tim Andersen, MAI

Excerpt: Let’s start this musing by addressing the issues of value, accuracy, and misleading. You might have looked at them differently in the past. Then we’ll tie these in the idea of the value conclusion in an appraisal being right or correct.

State appraisal boards level charges against appraisers. It is very common for appraisers to defend themselves against these charges by insisting their value is “right”. Or, they assert they have properly supported their value conclusion, or something similar. In reality, this argument is utterly irrelevant and carries no weight with the appraisal board.

IRRELEVANT!?

When it comes to value, accuracy, and misleading, the appraiser’s value opinion alone is irrelevant and weightless. This is because TAF has given state appraisal boards specific instructions. Those instructions are that the appraiser’s value conclusion is not to be a part of the board’s investigation. Nor is it to be a part of its deliberations. Therefore, it is not to be part of the appraiser’s defense since it is not part of the charges against the appraiser.

To read more, click here

My comment: Tim is a regular contributor to the paid Appraisal Today. He is The USPAP Expert and helps appraisers stay out of trouble with their state boards!! Tim also has an interesting podcast – link is on the top of the page.

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Appraisal Humor

Appraisal business tips

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Posted in: Appraisal fees, commercial appraisal, Coronavirus, desktop appraisals, Fannie, FHA, lender appraisals, Mortgage applications, real estate market, unusual homes, USPAP, webinars

Infectious Disease Defined the American Bathroom: Appraisals

Cholera and tuberculosis outbreaks transformed the design and technology of the home bathroom. Will Covid-19 inspire a new wave of hygiene innovation?

Excerpt: Alter predicted that disease-avoidance would rise to the fore of bathroom design a few years ago, when he observed the traumatizing effects of the 2003 SARS outbreak on Toronto, which killed 44 people. But home design in general — and bathroom design in particular — has long been influenced by infectious disease. This isn’t a linear narrative with clear causation, but rather a convergence of advancements in science, infrastructure, plumbing, sanitation and design trends.

The modern bathroom developed alongside outbreaks of tuberculosis, cholera and influenza; its standard fixtures, wallcoverings, floorings, and finishes were implemented, in part, to promote health and hygiene in the home at a time of widespread public health concerns.

To read more, click here

Very unusual bathrooms for appraisers(Opens in a new browser tab)

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Posted in: Appraisal fees, BATHROOMS, Freddie, humor, USPAP

Pandemic and market for buyers and sellers: Appraisals

By Ryan Lundquist April 30, 2020

Excerpts: Buyers more sensitive about location & condition: For years buyers have been exhibiting sensitivity to adverse locations and homes that are not in pristine condition. In other words, buyers have higher expectations about what they

75 percent alcohol disinfectant alcohol spray nearby a house concept of disinfecting the house

are buying and they aren’t overlooking the true condition of a home or paying top dollar for junk. I expect going through a pandemic will only inflame this dynamic.

Cash out at the top: Some people are concerned about the market changing directions, so we’ll see certain owners try to cash out at the top so to speak. I’m not saying we’re at the top of a price cycle. I’m only saying some people think the pandemic has pushed us or will push us into a new price cycle.

To read more, click here

Personal note from Ryan: Appraiser John Carlson GoFundMe: John is a well-known appraiser in Southern California and he is going through a difficult time as he was diagnosed with cancer and hospitalized. I invite you to pray for him and donate if you can. To read more, click here.

My comments: I spoke yesterday with a local appraiser friend who is thinking about selling her house and moving to a smaller, lowered priced house. (She is 78 years old, one year older than myself, but still appraising.) No listings or pendings in her area. Seemed like a good idea to me.

On June 29, McKissock had a webinar ” Appraising in a Pandemic”. In the last half hour, Ryan gave the best presentation I have ever seen on what to put in your report about the current market, not just a “I don’t know anything disclaimer”. He also had a sample statement slide. The recording was not available by my deadline. I will send it to you in next week’s email.
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Posted in: Coronavirus, Mortgage applications, real estate market, state appraiser regulators, UAD, USPAP