Blog - Appraisal Today

The Value of Evaluators

By Ann O'Rourke on January 19, 2013 / 5 Comments

Another great article from the Illinois appraisal regulator

Excerpts:

The argument to promote evaluations as an alternative to appraisals was driven by rural lenders who feared a shortage of appraisers might slow down closings. That was it. That was the main beef. A simple supply and demand issue for banks in the boonies… twenty years ago! An evaluation was regarded as “a generally simpler assessment
of real estate market value.”

Evaluations versus Appraisals (2012) —
The most recent incarnation of the Interagency Appraisal and Evaluation Guidelines emerged in December of 2010. Section XIII provides the suggested content of a evaluation…“a generally simpler assessment of real estate market value.

(BPOs cannot be used for evaluations.) A valuation method that does not provide a property’s market value or sufficient information and analysis to support the value conclusion is not acceptable as an evaluation. For example, a valuation method that
provides a sales or list price, such as a broker price opinion, cannot be used as an evaluation because, among other things, it does not provide a property’s market value.

If you want to know what the feds meant by “a simpler assessment”, go ask them. I’d love to hear that explanation myself.

Many AMCs, while eager to take on the evaluation function, fail to understand who is ultimately responsible for the entire program. (Their clients, the lenders)

Banks cannot hand‐off liability to AMCs like a hot potato just because they can’t be bothered managing their own evaluation program. If an AMC makes a mess of the bank’s
evaluation program, the responsibility of the failure falls squarely back on the bank.

Turning an evaluation into an USPAP compliant appraisal takes far less effort than trying to cobble together a cadre of competent and reliable evaluators to provide something that by state statute,must fall short of an appraisal.

My comment: This is an issue that has been around since the early 1990s. What does an evaluation mean? Cheap and fast. Banks want them. AMCs would love to provide them. I have no idea who would do them and what they look like. I have no idea how a licensed appraiser would do them as they must be USPAP compliant.

Seems easier to me just to do an appraisal. Maybe a shorter appraisal that is not 30 pages long with 9 comps and pages and pages of explanations!! Now that is a very practical idea. Just go back to the past pre-HVCC and incredible scope creep since then.

Click here to read the full newsletter article.

Posted in: AMCs, appraisal, appraisal management company, lender appraisals

Cave dwellings (Sassi di Matera / Italy)

By Ann O'Rourke on January 19, 2013 / 1 Comment

Excerpt:
This awesome place in the town of Matera in the region of Basilicata, Italy, is carved out from the soft tuff rock mountain (sassi = rocks). In 1952 the inhabitants were forcefully relocated by the government due to breakdown of the dwellings’ complicated ecosystems and lack of sanitary systems, but that’s changing now that they have entered Unesco’s World Heritage list (1993). One of the main reasons for the inclusion on the list is the enormous rainwater collection system, another reason is of course the age – the oldest inhabited parts date from the Palaeolithic period, and are thought to be among the first human settlements on the entire peninsula. Several caves have been carefully restored, parts as museum, but most as proper homes, or as holiday homes, small businesses, hotels, and B&Bs.

Click here for more fotos

Posted in: unusual homes

Tags: strange house, unusal homes

Appraisal client requests for clarification

By Ann O'Rourke on January 16, 2013 / 6 Comments

AppraisalPort Weekly Poll Analysis – client requests for clarification
By Steve Costello, AppraisalPort Product Manager

I receive a lot of e-mail from appraisers commenting about the time they spend working on requests for clarification on appraisals they have submitted to their clients. That prompted me to post two polls related to these client requests.

“What percent of your assignments result in a request for clarification from the client?”
The results were a little different than expected with nearly half (45%) of the 4,691 respondents stating that they only get a clarification request 0%-10% of the time. That is actually lower than expected based on what I hear from appraisers directly.
The second most popular answer was 11%-20% of the time with about 19% of the vote. The number of votes continued to get smaller as the percentages increased (13% chose 21%-30% while another 8% answered 31%-40%).
After that, things take a bump up. Nearly 15% of the appraisers responded that they get a request for clarification on more than 40% of their appraisals. I can see where that level of requests could make it difficult to get the new work completed on time.

“How often does your client requests information that is already in the original submitted report?”
In other words, we are asking how many of the above requests for clarification were un-necessary because the client already had the needed information.
This was a popular poll with 5,632 responses and the overwhelming answer was “often” with 60% of the vote.
About 27% responded that they “rarely” run into this situation while only 1% said it “never” happens to them.
Another 12% answered that this “almost always” happens.
So it looks as if we have a fairly large number of appraisers being asked for additional information that is already contained in the report.

My comment: nothing new here but I do like the analysis of the data. I love working for my estate clients. The dead people never request any clarifications (except maybe their executor contacts me when I have the wrong subject property address) ;>

Www.appraisalport.com

Posted in: AMCs, appraisal management company, lender appraisals

Dear Clipboard and Measuring Wheel – A Walk Down Memory Lane

By Ann O'Rourke on January 14, 2013 / 4 Comments

By Dustin Harris, The Appraiser Coach

Hey! How have you been? Sorry I have not written in a while. Wow, I cannot believe it has been over 15 years since I broke up with you. How time flies. My purpose in writing is not to make you feel bad, but I am not disappointed that we parted ways, and I honestly do not miss you two… at all. I know that seems harsh, but you said I would be sorry, and I just wanted you to know that you were wrong… again.

Oh, in the beginning, I thought I had made a huge mistake. My new flings were not as easy to get used to as you were. There was that one night, early on, where I had a little cry, ate an entire carton of Ben and Jerry’s, and almost broke up and came running back to you. How glad I am that I did not. That would have been a huge mistake. Why? Despite your warnings, your replacements have loved me without condition, been nearly completely faithful, and have allowed me to be more efficient and more accurate than I ever was with you. Though they may have cost more in the beginning, they have paid for themselves over and over and over.

Measuring Wheel, I am sorry for the jealousy I caused you when I left you for Disto. I still remember the harsh words you spewed at me as I laid you in the trunk of the car as a ‘backup.’ You said, “You will regret this! Her smaller frame and fancy red laser can never replace me. You will, I repeat, WILL be back.” In all honesty, I thought at the time that you might have been correct. That is why I carried you around for so many years even after turning my attention to Disto. Please accept my apology that I never did pick you up again, even for a short fling. I just cannot tell you how happy I am now with Disto by my side. Is she accurate? So much so that I have to ‘dumb her down’ a bit in order to meet ANSII standards of measuring to the nearest half foot. “But, what about those really sunny days or walls that do not have anything to bounce off of” you ask? Let me just say that everyone had a period of ‘getting used to.” She had hers as well (and honestly, it was longer than it took to get used to you), but once I understood what makes her tick and how to really ‘push her buttons,’ I have never met a wall I could not measure with her since. She and I are quite a team now. Granted, she will never protect me like you did (remember that time I used you to beat that vicious dog over the head?), but thankfully I have never had an incident like that one again.

Clipboard, I know you were angry when I put you in the backseat and started holding a pocket PC instead. Though Jornada™ seems a little antiquated now, she was light years ahead of you at the time. Maybe it will make you feel a little better if I told you she did not last either. Yes, I have now replaced her as well. Before you start accusing me of being a ‘player,’ you should know I stuck with her for many more years than I ever was with you, and her replacement was a huge step forward. Yep, I am now hanging with the iPad. Interestingly, you will remember that I ditched you for the more petite replacement, but my steady now is almost the same size as you (though she is a tad more heavy—so you at least have that). Remember when we were together how I would sometimes get clear back to my office before I realized that I had forgotten to take a picture or the two sides of my sketch did not match? Then, you and I would have to get back in the car for another ‘date’ to the subject property? Well, those days are so 1997. iPad never allows me to leave the property without knowing that I have everything I need and that everything matches as it should. How cool is that?

I know what you are saying, Clipboard. You think that I am spending more time at the subject than I ever did with you. OK. I admit it. This time you are right (I bet you never thought you would hear those words from me). I am spending an average of 5 additional minutes at the inspection, but that is not where the time savings comes in. The efficiency factor comes into play when I get back to the office. Remember how I used to have to come back to my desk and stare at you for dozens of minutes while I transferred my chicken scratches into the appraisal software? I know you liked all the attention, but I do not do that anymore. All that data transfers into the report on its own. You heard me correctly, all the data, the sketch, and pictures are all there when I get back to my office. You could never do that for me, Clipboard.

As I reread this letter, I guess I have been hard on you two. Maybe I shouldn’t send it, but my purpose is not to tear you down, and I am certainly not trying to pour salt in old wounds. I only think it is fair, since so many appraisers are still spending so much time with you, that you know where you stand. Just because you are popular does not mean you are better. There, I said it. I am sorry if that hurts, but there are other fish in the proverbial sea, as they say. It is time that other appraisers follow my lead and ditch you guys. Breaking up is hard to do, but it was a great decision for me, and I know it will be for others as well. Sometimes we gotta put you relics on the shelves and move on. Please do not feel bad. Perhaps it is time for a makeover. Clipboard, maybe you could round yourself off a bit and get rid of that hideous, metal growth and start a new life as a Frisbee. And Measuring Wheel; you still make a pretty good billy club.

Wishing you All the Best,

Dustin Harris

The Appraiser Coach

Dustin Harris is a multi-business owner and residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc. He owns and operates The Appraiser Coach where he personally advises and mentors other appraisers. He is also the Founder and President of The Appraisal Coach which implements some of the systems he has developed to help lower costs and free up time. His principles and methodologies are also taught in an online, Mastermind group. He and his wife reside in Idaho with their four children.

Posted in: appraisal, appraisers

Vertical forest in Milan

By Ann O'Rourke on January 14, 2013 / 13 Comments

I’ve been hearing about this for awhile and it is finally under construction!!

Excerpt:
The Bosco Verticale is a new superstructure designed to bring the world’s first vertical forest to Milan, Italy. While many were skeptical when it came to the feasibility of construction, Boeri Studio reports that the structure is certainly more than just a fantasy — in fact it’s well on its way to being completed this year. The project’s two towers have already reached full height, and since April of 2012 teams have been installing trees on the structure. Though construction has slowed due to rain and snowfall in Milan over the last couple months, things are anticipated to kick up again very soon to meet the late 2013 opening.

Milan is one of the most polluted cities in the world – the Bosco Verticale project aims to mitigate some of the environmental damage that has been inflicted upon the city by urbanization.

The two towers measure 260 feet and 367 feet tall respectively, and together they have the capacity to hold 480 big and medium size trees, 250 small size trees, 11,000 ground-cover plants and 5,000 shrubs (that’s the equivalent of 2.5 acres of forest). The types of trees were chosen based on where they would be positioned on the buildings’ facades and it took over two years of working with botanists to decide which trees would be most appropriate for the buildings and the climate. The plants used in the project were grown specifically for the building, pre-cultivated so that they would gradually acclimate to the conditions they would experience once placed on the building.

Link to original photos and article

Posted in: unusual homes

ES AMC out of business

By Ann O'Rourke on December 26, 2012 / 10 Comments

ES Appraisal Services/Evalonline.com/Evaluation Solutions AMC in bankruptcy and is out of business

Another AMC closes its doors. I have been predicting AMCs going out of business for a long time. Why? The cost of starting a national AMC is in the millions. To handle cash flow problems, such as losing a main client (ES and JVI are examples) millions more are needed in cash reserves. There are over 400 AMCs now since HVCC in 5/09. I don’t know how many have lots of cash reserves. I suspect that many don’t. It is very similar to an appraisal business being dependent on one client and then losing the client. Nothing new.

ES is in bankruptcy. Employees and back payroll taxes must paid first. Vendors/suppliers typically don’t get much.

What is surprising to me is how many appraisers keep accepting orders, even though there are many Internet postings about them, often for many months.

A few months ago, in the September 2012 issue of my paid newsletter, I wrote about how to collect from AMCs. It is not that hard. It is not that hard. I will be setting up a special AMC Watch List for my paid subscribers. To subscribe to the newsletter, click the banner below.

I have always known which AMCs were in trouble long before they went out of business. Real estate agents have been complaining for 2007 about BPO payment problems. Appraisers started speaking up in early January, 2012.

In the January, 2013 issue I have a profile of a mid-size AMC including how I evaluated their financial strength and ability to handle a downturn.

Sorry, I can’t give it all away as I spend a lot of time on the research and writing ;>

Posted in: AMCs

Tags: AMC

Largest home in the U.S.

By Ann O'Rourke on December 26, 2012 / 1 Comment

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Largest home in the U.S. June 2016

Excerpt:
Biltmore Estate is a large private estate and tourist attraction in Asheville, North Carolina. Biltmore House, the main house on the estate, is a Châteauesque-styled mansion built by George Washington Vanderbilt II between 1889 and 1895 and is the largest privately-owned house in the United States, at 178,926 square feet (16,622.8 m2) and featuring 250 rooms.

Still owned by one of Vanderbilt’s descendants, it stands today as one of the most prominent remaining examples of the Gilded Age, and of significant gardens in the jardin à la française and English Landscape garden styles in the United States. In 2007, it was ranked eighth in America’s Favorite Architecture by the American Institute of Architects.

Wikepedia link:

Link to photos

Appraisal Humor

Appraisal business tips

Swiss guesthouse built into side of mountain Appraisers and Houses(Opens in a new browser tab)

Posted in: unusual homes

Tags: unusal homes

Working on Xmas = USPAP violation

By Ann O'Rourke on December 19, 2012 / 5 Comments

stress-relax signs

AppraisalPort Poll Results 12/10/12
www.appraisalport.com

During this holiday season, I plan to:

=======================================================================

Take some time off to relax at home with family and friends. 1,720 votes 37%
Take some time off to travel and see family and friends. 457 votes           10%
Take some time off to catch-up on all those home improvement projects. 195 votes   4%
Take some time off to go somewhere for a real vacation. 162 votes           3%
Work straight through the Holidays – way too busy to stop. 2,109 votes 45%

Total Votes: 4,643

My comment: Bad, Bad, Bad for 45% who will be working! And this does not even count just not working on Xmas!!

Posted in: appraisal, appraisers

Tags: appraisers

Doomsday shelters

By Ann O'Rourke on December 19, 2012 / 2 Comments

Excerpts: You know all about the real-estate market. But what about the “underground” real-estate market — the secretive efforts of homeowners to install doomsday shelters at home?

If suppliers’ reports are a gauge, the market is small but growing. Unlike 1950s-era fallout shelters and newer aboveground “safe rooms,” meant to protect against storms and home invasions, bunkers are buried at least 6 feet under, in part to shield occupants from nuclear radiation.

You can buy a bare-bones shelter for $38,000 uninstalled or spend tens of millions of dollars — and a surprising number do — on a lavish, custom-made subterranean sanctuary.

And yet, the fears are powerful. About 30% of Camden’s clients are into “2012 stuff, the-world-as-you-know-it-coming-to-an-end type stuff,” he says. “I’d say at least half, if not 55%, is all geared for economic collapse and anarchy.” The remaining 20% involves the military, data storage and EMP mitigation.

“Our typical client is a wealthy, white Republican, highly educated, usually with a minimum of a master’s degree,” Camden says. Typically, the shelter is attached to their primary residence. These clients, he says, fear that economic collapse is near.

My comment: Yes, I have watched a few episodes of Doomsday Preppers on TV. Very interesting, but somewhat strange. And I am a big fan of sci-fi post-disaster survivor movies and tv shows.

Click here for more info

Posted in: unusual homes

Tags: strange house

Safe House: For when security cameras just don't cut it (Poland)

By Ann O'Rourke on December 19, 2012 / Leave a comment

Excerpt: With its drawbridge and various mechanically operated moving parts, this 6,100-square foot concrete cuboid compound in the country was designed by for clients whose “top priority was to gain the feeling of maximum security in their future house.” Either that or they wanted to live in what’s essentially an aboveground Batcave with a swimming pool.

The house is situated in a small village at the outskirts of Warsaw. The surroundings are dominated with usual „polish cubes” from the sixties and old wooden barns.

Click here to read the article

Posted in: unusual home

Tags: strange house