Homes with Major Structural Problems for Appraisers

Homes with structural problems for appraisers

Take a break and see some very strange things that can happen!!

Excerpt: For nearly 30 years, Alpha Structural, Inc. has developed a powerful reputation as the number one foundation engineering and repair, landslide repair, earthquake, and structural rehabilitation contractor in the Los Angeles area.

In this post, they share photos from its engineers’ day-to-day work, including all the funniest, most bizarre, and downright dangerous things they discover.

To check out the text, photos, very humorous comments, and leave your own comments, Click Here !!

My comments: I have appraised a lot of hillside homes and seen a lot of foundation damage, including strange ways people try to keep the damage from getting worse. One house was slowly moving down the hill. I appraised it as land value plus interim use as a rental (a very slow market at that time). Many thanks to long-time appraiser and friend (30+ years), John Regan, for this Most Excellent Link,!!Getting too many ad-only emails?

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Appraiser gets subpoena. What to do?

Excerpt: Depending on the nature of the subpoena and if witness testimony is requested, the appraiser may seek to get paid for their time. Some appraisers rightly point out that their limiting conditions in the appraisal include a statement that their service “does not include testimony.” They, therefore, insist that the attorney pay them their hourly fee. But because the appraiser is being ordered by the court, they typically are entitled to no more than the daily witness fee. Here in California, that is $35 for the day and $0.20 per mile for mileage.

Serving an appraiser with a subpoena is an approach that some attorneys use to try to get “expert witness” testimony for free. Consequently, an appraiser who is called to testify may want to present an expert witness contract to the attorney who was involved in issuing the subpoena. It is often helpful to speak to the attorney first, as this will allow you to understand why they are involving you in the case in the first place. And it might also present an opportunity for you to sell your services if you so desire.

To read more, click here

My comment: The question, of course, is the fee. This article is detailed and explains a lot of the issues. Excellent advice. A good example from a home inspector.

Let the attorney who sent the subpoena know what you will not be testifying as an expert witness. I have done expert witness testimony but have never received a subpoena, fortunately.

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Things To Remember About Tax Appeals

By Jamie Owen

Excerpt: As January rolls around each year, homeowners begin receiving their property tax bills. That’s why my tax appeal work often picks this time of the year. It should be no surprise that assessed home and land values are increasing. Property values have been increasing in many areas for years, with 2020 being a record year for home appreciation in many neighborhoods. So, it should be no surprise that the assessed values of homes are increasing.

In my experience with tax appeal work, usually the county assessor’s values are supportable. So, when might it be worth having an appraisal completed to contest your assessed value?

To read more, click here

My comment: Written for homeowners, but lots of excellent ideas for appraisers. The May 2019 issue of Appraisal Today has an article on this topic: Assessment appeals – marketing, fees, critical dates, etc. Focuses on the business side of tax appeals. It can be a profitable appraisal service. Available to paid subscribers. I attended meetings of assessment appeals boards in 3 local counties. Very interesting – a wide range of experience, background, politics, etc.

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Underground Compound of 4 Fallout Shelters in Montana

Excerpt: When spectacular mountain views are available, nearby homes almost always feature an abundance of windows to soak in the vistas. However, this property in Montana heads in a completely opposite direction. These four homes have no windows at all. They’re completely underground.

Listed for $1.75 million, the earth-sheltered homes were originally built as fallout shelters. Completely remodeled with curved walls.

To read more and see lots of photos, click here

My comments: Another appraisal challenge!!! Or nightmare ;> AirBnB? No complaints about noisy parties… I still remember the days of lots of people building fallout shelters in rear yards and hiding under my desk during drills at school for nuclear bombs.

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Burned out on broadcast AMC orders looking for low fees, fast turn arounds, picky “reviews”?

Thinking about non-lender work?

These two articles discuss the differences between lenders and non-lenders and can help you decide.

  • Communicating with non-lender clients: Very, very different than lenders!!
  • Should you do non-lender work? Pluses and minuses of both lender appraisals and each different type of non-lender appraisal.

To read the articles, plus 2+ years of previous issues, subscribe to the paid Appraisal Today. I also have lots of articles on doing different types of non-lender work.

If these articles helped you decide, it is worth the subscription price!!

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Unaffordable Affordability?

By George Dell

Excerpt: A great deal of economic, social, and political talk has been around affordability of housing. To explore this topic, it may be helpful to ask some questions. Good policy starts with the right questions.

In simplest terms, some people have the resources to have nice homes in nice neighborhoods, others have just tolerable homes for shelter. And others have no homes at all. We call them “home-less.”

More recently, we have become aware of the connection of poor housing and groups of certain ethnic categories. Discovery. There is association between housing status and ethnicity. Now what?

To read more, click here

My comment: Controversial topic. I reviewed Bagott’s book Dispatches from the Cosmic Cobra Breeding Farm, mentioned in this post. Worth reading. Mostly about the Appraisal Foundation and money

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The Best Part Of My Job As An Appraiser

Excerpt: The best part of my job is the great animals I get to meet every day. I grew up with dogs in the house and have always gotten along with them. After college in the first year of our marriage, a friend offered us a kitten, Damien, who enriched our lives for 21 years. Thanks Dave.

Being able to read animals and owners is a key skill. I have yet to be a bit after entering more than 5,000 homes over the past 18+ years which shows I’ve been successful.

(So that means I’ll get bit on my next inspection, I know how it works)…

What has been your experience with animals while inspecting? Any harrowing stories to share? Or have you been lucky like me and not yet bitten?

To read more, read the comments add your own, and see the pet photos, click here

My comment: Awhile ago, I was appraising the house of an appraiser I knew. Both of his small dogs bit me at the door. Beware of small dogs!! There was also the time I accidentally let a dog out and tried to get it back. Owners were home, fortunately. Been very careful with doors since then, especially cats who are good at escaping! All appraiser have pet stories!!

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Zillow Starts Making Cash Offers For the Zestimate

“15 years after the creation of the Zestimate, the latest evolution has Zillow standing behind its trusted home valuation tool to guide initial cash offers on qualifying homes”

Excerpts: The Zestimate is now an initial cash offer for eligible homes… Markets with homes eligible for this program include: Phoenix, Tucson, Ariz., Charlotte, N.C., Raleigh, N.C., Miami, Jacksonville, Fla., Orlando, Fla., Tampa, Fla., Portland, Ore., Denver, Colorado Springs, Colo., Fort Collins, Colo., Nashville, Tenn., San Diego, Los Angeles, Riverside, Calif., Sacramento, Calif, Dallas, Houston, San Antonio, Las Vegas, Atlanta, Minneapolis.

The initial offer equal to the Zestimate valuation is currently available on a limited subset of homes in markets where Zillow Offers operates.

To read more, click here

Comments from Jonathan Miller’s Housing Notes: For years, Zillow has described the Zestimate as a place to start, but it is not an appraisal (to limit their legal exposure). Yet now they are going to use it as a basis for cash offers? Given the Zestimates inaccuracy…what a 5% median accuracy rate means: The Zestimate is within 5% of the actual value 50% of the time and 50% it is not. This seems quite reckless, no? What am I missing?

Link to Miller’s Housing Notes

My comment: It works well with newer tract homes. Will be interesting to see what “a limited subset of homes” includes. Recently built tract homes??

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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to www.mbaa.org Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to https://www.appraisaltoday.com/products.htm or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 7AM to noon, Pacific time.

Mortgage applications decreased 11.4 percent from one week earlier

WASHINGTON, D.C. (February 24, 2021) – Mortgage applications decreased 11.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 19, 2021.

The Market Composite Index, a measure of mortgage loan application volume, decreased 11.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 10 percent compared with the previous week. The Refinance Index decreased 11 percent from the previous week and was 50 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 12 percent from one week earlier. The unadjusted Purchase Index decreased 8 percent compared with the previous week and was 7 percent higher than the same week one year ago.

“Mortgage rates have increased in six of the last eight weeks, with the benchmark 30-year fixed rate last week climbing above 3 percent to its highest level since September 2020. As a result of these higher rates, overall refinance activity fell 11 percent to its lowest level since December 2020, but remained 50 percent higher than a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Additionally, the severe winter weather in Texas affected many households and lenders, causing more than a 40 percent drop in both purchase and refinance applications in the state last week.”  

Added Kan, “The housing market in most of the country remains strong, with activity last week 7 percent higher than a year ago. The average loan size of purchase applications increased to a record $418,000, in line with the accelerating home-price growth caused by very low inventory levels.” 

The refinance share of mortgage activity decreased to 68.5 percent of total applications from 69.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 2.7 percent of total applications.

The FHA share of total applications increased to 11.2 percent from 9.0 percent the week prior. The VA share of total applications decreased to 11.9 percent from 13.2 percent the week prior. The USDA share of total applications decreased to 0.3 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.08 percent from 2.98 percent, with points increasing to 0.46 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) increased to 3.23 percent from 3.11 percent, with points increasing to 0.43 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.00 percent from 2.93 percent, with points decreasing to 0.33 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 2.56 percent from 2.47 percent, with points increasing to 0.40 from 0.36 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs remained unchanged 2.83 percent, with points decreasing to 0.36 from 0.70 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

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Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041

Email  ann@appraisaltoday.com 

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Why Comp Photos in Appraisals?

Why Comp Photos?

by Richard Hagar, SRA

Excerpt: First, don’t even think about not doing it! To begin with, it’s required. Inspecting the exterior of every comparable isn’t a USPAP requirement, by the way, it is a Fannie Mae, Freddie Mac, Federal Housing Authority (FHA), and Department of Veteran Affairs (VA) requirement.

However, FNMA’s requirement goes directly to the heart of USPAP’s “scope of work” rule. USPAP defines scope of work, in part, as: the type and extent of research and analyses. The scope of work section of the 1004 appraisal states “The appraiser must, at a minimum: (3) inspect each of the comparables sales from at least the street.” So, when an appraiser agrees to an assignment and its required scope of work, they have agreed to personally inspect the exterior of each sales comparable used in the appraisal. There is no way around this; an appraiser can’t contradict the certification requirement by inserting a qualification within the appraisal. In other words, it’s your job; you are being paid to personally inspect each sales comparable—so do it!

To read more, click here

My comments: Last week’s newsletter had a very popular negative post on comp photos: Original Comp Photos: Dangerous, Unnecessary. This week is the other side!! I know what it is like to drive many miles to take an original comp photo that I somehow forgot to take. But, I am more comfortable if I take another comp photo again as I forget about the details sometimes. I have used MLS photos when I cannot see the comp from the street.

Hagar discusses the many aspects of original comp photos, including the limiting conditions on the Fannie forms. In my opinion, the statement is somewhat uncertain. “…inspect each of the comparables sales from at least the street”. Does this mean original photos and always driving by? I do not have this statement in my non-lender appraisals, plus many other Fannie statements. However, many lenders and AMCs have this in their requirements.

On the other side, I used to travel to Canada to speak at appraisal conferences. At that time, taking original comp photos was not required for lending purposes. Few appraisers did them. They said they had “seen it in the past”.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on USPAP, comp photos, adjustments, Bias, mortgage origination stats, Covid tips for appraisers, etc.

Read more!!

Zillow Gets Pillowed Appraisers Laugh!

Zillow Gets Pillowed – Very Funny Video!

by Jonathan Miller

Excerpt: I met Rich Barton, Zillow CEO, at an Inman/Curbed party held during an Inman conference in Manhattan a long time ago, the evening before Zillow’s launch. I asked Rich, a very nice and fascinating person, what he did for a living, not realizing he was the co-founder of Expedia. Ugh. He also said they were launching their latest effort the following morning – a web site called “Zillow,” and he added “as in rhymes with pillow” to the description. Little did I know real estate would never be the same after that.

So this weekend’s SNL skit on Zillow was particularly delicious with all the “pillow talk.” Even Rich got a kick out of it.

To watch the video and read more comments, click here

Direct link to video on youtube click here

My comment: Warning. It contains some sexy parts, including two guys. It is a Saturday Night Live skit. Not for children and maybe some appraisers…

Zillow uses home photos for “appraisals”(Opens in a new browser tab)

 

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on adjustments, Fannie Photos, strange house, mortgage origination stats, Covid tips for appraisers, etc.

Read more!!

New sewer line increases value for appraisals?

My new sewer line adds huge value, right?

January 19, 2021, By Ryan Lundquist

Excerpt: A new sewer line. That’s what 2020 gave my family as a parting gift before the year closed. Yep, just before Christmas, we had to replace our entire line at a whopping $13,688. I know that sounds crazy expensive, but we had four separate bids and went with the most reasonable one. In part it was so pricey because we had one hundred feet of the line under eighty feet of concrete.

The good news is my house is worth $13,688 more now, right?

To read more plus lots of appraiser comments click here

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

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on fees, house settling, unusual homes, mortgage origination stats, Covid tips for appraisers, etc.

 

Read more!!

Appraisal Cost To Cure

Cost to Cure 

(Plus very funny handyman video)

Excerpt: On a regular basis, I appraise homes that need some type of repair. It may be as simple as replacing an outlet or as complicated as renovating a home. In the appraisal process, the appraiser has to estimate a cost to cure many types of repairs.

Why do appraisers use the term, cost to “cure” instead of a cost to “fix” a repair? Are appraisers just trying to use fancy vernacular to try and impress the reader of the report?

Appraisers think in terms of value. The term “cure” may make you think of someone who suffers from an illness for which a cure is desired. Appraisal Cost to Cure is very different.

To read more and watch the very funny 3-minute video near the end, click here.

My comments: Written for homeowners. This very good for appraiser marketing. But, there are lots of reminders and maybe some new ideas for appraisers.

The best part: The “Weird Al Yankovic” Handy 3 minute video at the end. Very, very funny. Total Escape!! Just what I needed for the election ;> I have been following Weird Al for decades.

Once Again, Jamie Owen finds the best photos, animated gifs, and videos. Extremely Creative!! 

Unfortunately, I cannot insert a video into these emails.

If you don’t have time to read the blog post, to watch the 3-minute video, click here

Appraisal Humor

Appraisal business tips

Click Read More below for the rest of this long blog post!!

 

Read more!!

Common Appraiser Violations

Two of the common appraiser violations – Use of inappropriate sales and Use of unsupported site value

Excerpt: When it comes to common appraisal violations, certain minor violations are very common. In this article, I outline several examples of less serious breaches of development STANDARD 1 and reporting STANDARD 2—and a few other types of violations, too. I have compiled these based on many years of personal experience in appraisal regulation, as well as feedback I have received from other states’ enforcement agencies. Once you’re aware of these common mishaps, you should be able to avoid them more easily.

1. Use of inappropriate sales

One of the big problems is the use of inappropriate sales in a sales comparison approach….

2. Use of unsupported site value

Another common violation is the use of unsupported site value in the cost approach. That’s something that a lot of boards have cited as a prevalent deficiency or shortcoming in appraisal reports.

To read more click here

My comment: useful information. Nothing new, but good reminders. Don’t get the “violation letter” from your state board!!

Appraisal Process Challenges(Opens in a new browser tab)

Appraising Weird Stuff is Challenging!(Opens in a new browser tab)

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

Read more!!

Appraising Weird Stuff is Challenging!

How to Handle the Weird Stuff: Appraisal Methods from an Experienced Florida Appraiser

Excerpt: Going further away or back in time

One method is to go further back in time for comparable sales.. Another method is to use sales that are more distant to find data to utilize. Both of these techniques have long been available to appraisers. When using these appraisal methods, most often a comparison is made between properties with similar characteristics to the question at hand to extract a ratio/percentage which is then brought current or to the locale and applied. This could work for the above illustration with only four houses on leased land and no similar nearby sales. Most appraisers are familiar with and have utilized these techniques… Appraising Weird Stuff is Challenging!

Well written and worth reading. To read more, click here

My comments: Lots of good tips. All of us are asked to appraise the “weird ones”. Of course, sometimes we don’t know a house is weird until we drive up and see it!! A very good discussion of methods. I have used all of them except the depreciated cost, which is a good method. Plus, lots of tips on doing them for lenders. Of course, sometimes I just say “no” as it will take too long.

I have learned that they often are money losers due to the increased time. This is what can happen with lender UAD appraisals for AMCs due to the excessive amount of questions and trying to fit the appraisal on the form. I sometimes accept the weird ones for non-lender work with no time pressures. They can be very interesting and challenging.

Appraisal Process Challenges(Opens in a new browser tab)

Common Appraiser Violations(Opens in a new browser tab)

Read more!!

Should Appraisers Pay to Be on AMC List

By Dustin Harris

Excerpt: Should appraisers pay to be on an AMC’s approved appraiser list? Is this one way to get new clients? If an AMC solicited you, would you check it out?

Now, I work for some AMCs that, frankly, you might not choose to work for. That’s fine. It’s a choice we all make. Understand that most of the areas I work are rural, so AMCs are generally willing to pay more because of this. Some AMC are very demanding. Yet, when I meet those demands, I get a lot of well-paying jobs from them.

To read more, plus lots of appraiser comments, and listen to the podcast, click here

My comment: A never-ending very controversial topic ever since AMCs took over residential lender appraisals after the mortgage crash around 2008!

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

Read more!!

Which Appraisal Clients are used the most?

Survey: Which Appraisal Clients Make Up the Majority of Your Client Base?

Excerpt: What types of clients do property appraisers serve? Do most of their assignments come from lenders vs. non-lenders? To help answer these questions, we recently asked our real estate appraisal community, “What type of appraisal client makes up the majority of your client base?” Or, which Appraisal Clients are used the most?

While most appraisers said that the majority of their work comes from lenders (most often through AMCs), some said the bulk of their client base is made up of other types of appraisal clients, such as attorneys or private individuals.

To read the results and appraiser comments click here

Marketing and Management Tips for Appraisers

Read more!!

Favorite parts of the appraisal process

What’s your favorite part of the appraisal process?

Excerpt:

Number 1. Data collection and property description (38%)

“The best part is the property review. I enjoy seeing what people have done to their properties and talking to them about their homes.”

“I enjoy viewing/observing the subject home.”

“Detective work”

“Each dwelling is different, and not every appraiser takes the time to clarify the differences in the dwellings. The quality, the construction, the egresses, and especially the correct way to calculate GLA or measure a dwelling.”

Number 2. Data analysis (27%)…

To read more about favorites, click here

My comment: I love working in the field, so my choice is Number 1. But, my very best choice is getting paid ;>

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

What is the farthest you have traveled to complete an appraisal and still be considered geographically competent?(Opens in a new browser tab)

Appraisal Process Challenges(Opens in a new browser tab)

Read more!!