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What is Your Appraiser Level? Why Does It Make a Difference?

What Level Appraiser Are You?

Beginner, Intermediate, or Pro?

By McKissock

Excerpts: How do we measure ourselves?

What is the mark of an appraiser who is at the top of his or her “game”? Is it the letters behind the name (MAI, SRA, etc.)?

The key is not the letters but the competency or skill. For example, are you competent to prepare an entire appraisal from start to finish? You might answer, “Absolutely!” But what if the appraisal form was completely blank with no boilerplate text? Do you still feel the same level of assuredness? What if you could not use the URAR form at all, but still had to produce an appraisal report that could stand up in court? Are your legs shaking? These questions help us to start to gauge our current level.

A Level 1 appraiser checks boxes. A Level 2 appraiser adds explanations, graphs, and charts to those boxes. And a Level 3 appraiser knows how to think outside the checkboxes altogether. A pro-level appraiser may use a form. However, she is not bound by it; she can prepare a narrative report if it is needed or preferred. In addition, he understands the principles of USPAP and never stops improving his craft.

To read more good ideas, click here

My comments: Most appraisers are not busy. Now is the time to increase your appraisal skill level. There are AMCs who want appraisers to do the “tough ones,” not just those with the lowest fees. They will pay good fees. Non-lender appraisals, with higher fees, also require a higher skill level.

Appraisal Errors from Reviewers and State Boards

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post – Bias, Cost cutting, slow business, unusual homes, mortgage origination stats, etc.

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Posted in: appraisal business, bias

What Appraisers Wish Real Estate Agents Understood

What Appraisers Wish Real Estate Agents Understood

McKissock Survey

Question: “What’s one thing you wish real estate agents knew about the appraisal process?

Top 10 most common answers

  1. The appraisal process is complex and takes time
  2. Appraisers do not assign value
  3. Appraisers are unbiased and must follow guidelines
  4. Appraisers need their input and cooperation
  5. How to select appropriate sales comps
  6. The importance of providing accurate and detailed info in their listings
  7. How to determine correct GLA (gross living area)
  8. How renovations and upgrades affect value
  9. How to prepare for the appraisal appointment
  10. FHA/VA/USDA guidelines

To read all the appraiser comments, click here

My comments: The appraiser comments are worth reading. I will always remember when, many years ago, a top local real estate agent asked me why I was driving around taking photos of homes. Of course, most people confuse real estate agents with appraisers. We have done a very poor job of telling the general public what we do and that we are are objective and unbiased. We need a good Appraiser PR Campaign!

Appraisal Business Tips 

Humor for Appraisers

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Posted in: adjustments, AMCs, appraisal business

AMC Alleged Violations of Appraiser Independence Requirements

Fastapp AMC Alleged Violations of AIR (Appraiser Independence Requirements)

Excerpts: The following court documents in the case Naftali Horowitz v. xxx, Fastapp AMC founder v. Fastapp AMC president, confirm what appraisers have been saying all along, that if you want high-volume AMC work, you have to lower your fees to 1980’s level, have 24 hour turn times, and, above all, be a number hitter.

Horowitz claimed that Andrews engaged in conduct constituting potential violations of the Appraiser Independence Requirements under the Dodd-Frank Act of 2010 (“Dodd-Frank Act”), including unlawfully seeking to influence an appraiser to encourage a targeted value to facilitate the making or pricing of the transaction in violation of 15 U.S.C. § 1639e(b)(3).

… it began to become apparent to Andrews that Horowitz was not complying with appraisal independence standards. Instead, Horowitz would personally select one of a small number of his preferred appraisers for any given appraisal request… It thus became apparent to Andrews that Horowitz was engaged in a widespread scheme in violation of federal law by assigning appraisals to appraisers who would appraise values at requested values in exchange for order flow.

To read more plus over 50 appraiser comments, click here

My comment: Copies of the emails tell the story of “cooperative” appraisers getting most of the assignments. Very similar to the old mortgage broker days. A primary reason for Dodd-Frank.

AMC Fined for Appraisal Order Blast Violation

Appraisal Business Tips 

Humor for Appraisers

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Posted in: AMCs, appraisal business, Fannie, non-lender appraisals

Appraisal Profession Dying?

Bringing More People Into a Dying Profession?

By Dave Towne, Jan. 23, 2023

My comment: This only applies to residential lending appraisals, of course. My non-lender appraisals have changed very little with few, if any new “requirements”. I determine the Scope of Work.

Excerpts: Some people want to bring more people (primarily of color, which is great) into a dying profession. But the profession is being killed off by (mostly white!) people who think technology is the golden spoon to accurate valuations.

PAREA is being touted as the savior and the best appropriate way to get new people into this profession, especially people of color. Really? Let’s see. The education providers currently writing the PAREA courses have been indicating that the course cost will be up to 5 figures, roughly $10,000 or possibly more. That’s an outlay of significant cash BEFORE actually connecting with an appraiser who will put the PAREA-educated appraiser to work.

To read more, plus over 60 appraiser comments, click here

My comments: This only applies to residential lending appraisals, of course. My non-lender appraisals have changed very little with few, if any new “requirements”. I determine the Scope of Work.

I definitely prefer “profession” to “business”. I have always been a professional appraiser. I quit doing residential lender appraisals in 2005. I had good clients but did not like the dramatic volume changes. It has gotten very bad since AMCs took over.

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on Costar and residential, non-lender appraisals., Humor, Zillow, unusual homes, mortgage origination stats, etc.

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Posted in: appraisal business, future, humor, non-lender appraisals, zillow

FHA Handbook 4000.1 Appraisal Changes

FHA Handbook 4000.1 Appraisal Changes

By Dan Bradley

Excerpts: On January 18, 2023, HUD issued an announcement regarding revisions made to Handbook 4000.1. According to the announcement, the revisions included “enhancements and revisions to existing guidelines and various technical edits.”

The most significant of these revisions was the elimination of the requirement to include the 1004MC form as an attachment to the appraisal report.

Changes to the Handbook also include several other minor, but nevertheless meaningful, edits and clarifications to FHA appraisal requirements, including:

Under “Attic Observation Requirements,” a clarification was made regarding the appraiser’s obligation to “safely” access the attic. The language requiring a minimum “head and shoulders” access into the attic was deleted.

Under “Crawl Space Observation Requirements,” significant revisions were made, including removal of a bullet point list of MPR/MPS criteria for the crawl space. Also, language requiring a minimum “head and shoulders” access into the crawl space was deleted.

The changes outlined in the Handbook may be implemented immediately but must be implemented for FHA cases assigned on or after April 18, 2023.

To read more, click here

My comments: Many thanks to McKissock for telling us what we need to know. Includes a link to the “redline” version of 4000.1 so you can skip over most of it. Scroll down to “Updates, Revisions, Notifications” to get the redline versions.

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Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, mortgage origination stats, etc.

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Posted in: AMCs, appraisal business, bias, FHA, non-lender appraisals

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

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

10. Dazzle your friends with your knowledge of external obsolescence.

9. The wonderful world of rats, bats, and spiders.

8. Be a part of the profession blamed for the collapse of the savings and loan industry.

7. See places in people’s houses that usually require a search warrant to access.

6. Arouse the suspicion of an entire neighborhood when inspecting comparable sales.

5. Chance to really irritate annoying real estate salespeople.

4. Walk around holding a clipboard just like “Skip” down at the Jiffy Lube.

3. Spend hours writing volumes of supporting documentation to justify the market value of a property you already decided on when you pulled into the driveway.

2. See that some people really do hang those black velveteen pictures of Elvis on their living room walls.

1. Be one of a handful of people who know that USPAP is not a medical term.

Many thanks to reader Joe Ibach, MAI, for this great list! He doesn’t know the source…seems like it is one of those email/send/resends now floating around the Internet!

Appraisal Business Tips 

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NOTE: Please scroll down to read the other topics in this long blog post on AMC fees, Real estate forecast, Google Business Profile, unusual homes, mortgage origination stats, etc.

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Posted in: AMCs, appraisal business, forecast, humor, real estate market

Appraiser Scam – Be Careful!

Appraiser Scam – Be Careful!

Posted Jan 5 on National Appraisers Forum. This was also posted in the 100% Appraisers group on FaceBook as happening to others.

“Last week, I received a text from “Master Chief Robert Roy” requesting an appraisal for a cash purchase. I thought it was odd that he was addressing himself by his rank as I do work for the VA and no service member has ever done that in my experience. Also my daughter’s boyfriend, a West Point graduate, was visiting at the time and he also thought it was odd too. I looked him up on line and saw that he was a Navy Seal and a public speaker. I addressed him as Sir in our texts out of respect.“

“He requested that I inspect the property 1/5/2023 as the inspector would be there at the same time. My fee was $775 however sent me a $1950 cashier’s check via Fed Ex the next day. He stated that his assistant mistakenly included the inspector’s fee and would I please pay the inspector the $1175 balance. (That seemed high for an inspector….) “

One of the responses:

“Sorry this happened to you. I posted about this about a month ago. Same guy. Because it seemed so odd, I didn’t respond to him and instead called the listing agent directly. He said I was the 4th female appraiser to call him about this in 24 hours. He had reported it all to the police. I never responded to the dude, as it is obviously a scam or worse. When I researched the name he was using, I found that person to be deceased. “

My comments: When appraisers are very slow, it is very hard to turn down an appraisal. Savvy scammers may know about this. Beware!!

1-12-17 Newz .New scam: owners pose as renters, 21 day turn times

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on all cash sales, bad bank, FHFA/Fannie, speaking at real estate agent meetings, unusual homes, mortgage origination stats, etc.

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Posted in: appraisal business, Fannie, non-lender appraisals, real estate market

Appraiser Professional Goals

1-6-23 NEWSLETTER

Appraisers Share Their Top Professional Goals for 2023

By: McKissock (Survey)

Excerpts:

  • Maintain my current business (26%)
  • Earn a designation or certification (16%)
  • Grow my business (15%)
  • Prepare for retirement (12%)

“I would like to turn over my appraisal business to my daughter, who is certified.”

Should have retired last year but put it off due to the high amount of requests!”

After 23 years in appraising, which was very beneficial for me and my customers, I’m preparing for retirement.”

  • Achieve a better work-life balance (10%)
  • Other (6%)

To read more, including personal comments from appraisers, click here.

My comments: The post has links to some topics above with many tips. I have recently been writing about many of these topics since the market changed.

I write about non-lender work, staying up when business is down, retirement planning, and more in my monthly newsletter. I will be writing soon about upgrading to Certified General. I have always done both commercial and residential. My business has been much more stable as I can shift between them when the appraisal markets change, especially fees.

What are you planning to do in 2023? Now is the time to learn all the features in your MLS and forms software, upgrade your skills by taking seminars and classes, and more.

The future of residential appraising

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on USPAP and non-traditional appraisals, Non-lender appraisals, reos, tear downs, unusual homes, mortgage origination stats, etc.

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Posted in: non-lender appraisals, real estate market, USPAP

VA Required to Encourage Hybrid Appraisals

  • VA Required to Encourage Hybrids – Senate Passes HR 7735

    By Dave Towne December 21, 2022

    Excerpts: The U.S. Senate has announced the passage of HR 7735, the Improving Access to the VA Home Loan Benefit Act of 2022.

    Under the terms of HR 7735, sponsored by Sen. Dan Sullivan and Rep. Mike Bost, the VA will be required to:

    • Issue certification requirements for appraisers;
    • Execute minimum property requirements;
    • Review the process for selecting and reviewing comparable sales;
    • Implement quality control processes;
    • Establish the Assisted Appraisal Processing Program; and
    • Establish the use of waivers or other alternatives to existing appraisal processes.

    This is not yet ‘law,’ but likely will be in the not too distant future. Has passed House and Senate. Needs Biden’s signature.

    To read more, click here

    My comments: Read the appraisers’ comments. The law is not surprising. The mortgage industry has been wanting this for a long time. I still recommend VA to appraisers as they are the only mortgage organization that wants to help the borrower instead of making as much money as possible

Where VA loans are soaring. Are you doing VA appraisals?

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post Bad appraisers, 2023 forecast, unusual homes, mortgage origination stats, etc.

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Posted in: appraisal business, bad appraisers, forecast, hybrid appraisals, non-lender appraisals, va

What is a residential complex property?

How to Identify a Residential Complex Property

By: McKissock December 16, 2022

Excerpts: The property to be appraised is atypical

In this case, the property is an outlier, oddball, or not common for the particular area. Of all the characteristics that can make a property complex, physical features are the ones that are most obvious. Some of the key physical features that can make an appraisal assignment complex include:

The form of ownership is atypical

In this case, circumstances involving ownership are uncommon or make the appraisal more complex. For example: The owner doesn’t own property rights on a waterfront property.

The market conditions are atypical

In this case, unique market conditions increase the complexity of the appraisal. For example:

The property is located in an area where there are no other sales.

There is no market for the house; no sales are occurring for some reason (e.g., the property is near a nuclear site cleanup).

Note: the link to the complementary post, “How to Pull Comps on a Complex Property,” is included in this blog post.

To read more, click here

My comments: Worth reading with good tips. I published “Tips for dealing with complex residential appraisals” in the November issue, much longer with many more tips and examples.

Appraisal Business Tips 

Humor for Appraisers

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Posted in: adjustments, appraisal how to, george dell, humor