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

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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)

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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)

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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)

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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

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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)

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What’s the appraisal definition for suburban?

Excerpts: The U.S. hasn’t had a formal definition for what constitutes a suburb. A new data analysis comes closer to defining America’s most popular neighborhood type. (Suburban appraisal definition is tricky.) What’s the appraisal definition for suburban?

The United States is a land of suburbs, with just one problem: No one’s quite clear what a “suburb” is.

It’s a question of semantics with real-world implications, as government programs, political campaigns and developers try to spend money in the “suburbs,” where a majority of Americans say they live despite the category having no formal definition.

For some people, it’s obvious: A suburb is a smaller city on the periphery of a larger city. Or it’s a sprawling neighborhood filled with vast swathes of single-family homes. Still other more dated conceptions of suburbia in the popular mind involve the people who live there: allegedly white, middle class and socially homogenous.

Now a new team of researchers believe they’ve cracked the code…

To read more, click here

My comments: Of course, if you do residential lender appraisals this is a Very Big Issue due to lender “requirements” such as no rural properties. Lots and lots of online discussion about this for a long time. Post this topic on your favorite Internet chat site or email list… and wait for the wide variety of opinions!!

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My Favorite Definitions

(This has been floating around for many years…)

Rural  Suburban  Urban

  • If you stand naked on the front porch and the neighbors can’t see you… it’s rural.
  • If you stand naked on the front porch and the neighbors call the cops on you… it’s suburban.
  • If you stand naked on the front porch and the neighbors ignore you… it’s urban.

There are other variations, of course, that are not suitable for this newsletter ;>

Crazy Appraiser Stories!!(Opens in a new browser tab)

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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. 

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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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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!!

 

To see more, click here

Appraisal Humor

Appraisal business tips

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