Appraising the White House

By on July 20, 2019   /   AMCs, appraisal classes, AVMS, bifurcated appraisals, Mortgage applications, state appraiser regulators, statistics, weird homes   /   1 Comment
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18 Historic Homes that Would Be Fascinating to Appraise

Excerpt: Historic homes make for complex and interesting appraisal subjects. As one appraiser said, “I love unusual properties, and the challenge they present to appraise. I have always loved appraising large, older properties. They take us back to another world back in time.” We recently asked our appraisal community, “What famous historic home would you want to appraise?” Here’s what they said.
A few of the homes:
Frank Lloyd Wright’s Fallingwater
The White House
Norman Bates “Psycho” House
Graceland
To read the full list plus many comments click here
My comment: For me, none of the above ;> Too difficult!

Appraising Weird Stuff is Challenging!

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Practical real estate appraisal writing tips for AMC questions

By on June 28, 2019   /   AMCs, appraisal how to, appraisal management company, bad appraisers, bifurcated appraisals, Fannie, hybrid appraisals, Mortgage applications, real estate market, weird properties   /   Leave a comment
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Write Like A Professional – Very Practical Writing Tips for AMC/underwriter questions

By Tim Andersen

Excerpt: QUESTION: I like to use the term, “in my professional opinion” as part of my reports. After all, I am a professional paid to express opinions. Recently, the reviewer for an AMC requested I remove that term from my report since, in her words, “…it has nothing to do with value”. Is the reviewer overreaching on this? The reviewer has the right to tell me if there is an error in my report, but not to criticize the language I use in my report. What should I do?

ANSWER: As Gertrude Stein was supposed to have said upon seeing Oakland, California for the first time: “There’s no there there!” For good or ill, the same may be said about many real estate appraisal reports and the convoluted language they insist on using…..

Excellent and practical. To read more click here

My comment: this is the best article I have ever seen for practical tips on how to reply to AMC/underwriter questions with lots of examples.

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Residential Appraisal Errors

By on May 3, 2019   /   AMCs, appraisal management company, Mortgage applications, real estate market, weird properties, zillow   /   Leave a comment
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25 Common Errors in Appraisal Reports

A compilation of the most common errors and deficiencies found in appraisal reports by reviewers, regulators, and appraisal boards. Residential Appraisal Errors

Here are a few:
– Not providing enough analysis for the intended user or reader to understand the report properly.
– Inconsistencies between the description of the subject property in the improvements section and the photographs, sketch, sales comparison grid, and other areas in the report.
– Inappropriate use of boilerplate commentary in the appraisal report to describe the neighborhood or to explain the reconciliation of the sales comparison approach.
– Failure to summarize the analysis and rational that supports the Highest and Best Use opinion.
– Not complying with the most current USPAP.
Read the full list here:

My comments: Reminders are always good. For unknown reasons, I don’t see much CE or writing on these problems. These apply to all appraisals because we are licensed, not just lender appraisals.
It was soooo nice in the “old days” before licensing ;> Two Rules: Tell the  truth and disclose what is bad. No USPAP changing every two years, overzealous appraisal boards, renewal fees, etc.. Of course, the reason we have licensing is the lender mess in 1989, resulting in FIRREA,  regarding bad commercial property development loans by S&Ls
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Appraisal Business Tips 

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Covid-19 Residential Appraisers Tips on Staying Safe

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Appraising Hobbit Houses

By on April 26, 2019   /   AMCs, Appraisal Foundation, Appraisal Qualifications Board, appraisal regulations, Appraisal Standards Board, marketing, Mortgage applications, mortgage loan volume, Strange homes, unusual home, unusual homes, weird homes   /   Leave a comment
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Hobbit Houses in Charlevoix, Michigan

Just For Fun!!

Excerpts: Growing up in northern Michigan in the early 1900s, Earl Young was obsessed with boulders. Glacial boulders, to be exact-ones moored in fields, forests, and on lake coastlines across the state thanks to the slow march and retreat of glacial ice during the Precambrian age. Appraising Hobbit Houses in Michigan is a challenge.
The homes he designed will stop you in your tracks, as one did the last time I was there, passing by on a bike. Call them “mushroom houses,” “hobbit houses,” “boulder houses”; everyone has a different name for them. They’re often described concisely, if vaguely, as “organic.” Though some see Frank Lloyd Wright’s influence, they’re distinctly Young.

Fascinating! Lots of fotos and info at:
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Lord of the Rings – Hobbit houses from the movie(Opens in a new browser tab)

Hobbit House of Montana(Opens in a new browser tab)

Appraisal Business Tips 

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Appraisal Adjustments Yes, No, Maybe

By on March 28, 2019   /   adjustments, AMCs, hybrid appraisals, marketing, Mortgage applications, Strange homes, weird homes   /   Leave a comment
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In Search of “Perfect” Adjustment Factors

By Richard Price

Excerpt: Although a “perfect” adjustment may not exist, the search for perfect adjustments in appraisal reports is becoming a hot topic with many interesting articles, continuing education courses, and webinars addressing the subject. The message is clear. If an appraiser can’t support the adjustments, the results of the appraisal are subject to question, leading to several possible outcomes; none of them good. So, we will define the “perfect” adjustment factor as the best and most appropriate adjustment that should be made to the comparables.

https://www.appraisalbuzz.com/in-search-of-perfect-adjustmment-factors/

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Adjustments, now what?

By George Dell
Excerpt: We’re told to “support” our adjustments.  We hear words like “prove” your adjustments. . . as if there were some magic formula which can give an exact, correct, and absolutely true number.

It used to be so easy. . . Our trainer gave us a sheet with the “right” adjustments. Simple.

USPAP Standards Rule 1-1 says we must be aware of, understand, and correctly employ recognized methods and techniques. What are they? Who recognizes them? How do I apply them?

So, what are these methods and techniques? Let’s look.

In The Appraisal of Real Estate (ARE) p.46, it says: “Qualitative analysis techniques may also be applied for elements of comparison for which quantitative adjustments cannot be developed.”  So, it seems the very first reference in the ARE says some adjustments cannot be quantitatively developed!

For lots more Dell Adjustment Writings, go to the Adjustment Archives:

https://georgedell.com/category/adjustments

My comments on adjustments: CU in 2015 revealed residential form appraising’s “dirty little secret”: lack of support for adjustments.

Before starting my appraisal business in 1986, I worked part time for a local appraiser for 3-4 months. I went out with him first on a few lender appraisals. I will never forget asking him where the adjustments came from. He said “we use these” with no explanation. Later I asked other appraisers and they had the same answer.

Finally, about 3-4 years ago, I quit doing adjustments on form appraisals except for market conditions and factors that significantly affected the value, such as a very good view. Those adjustments were supported.

Appraisal Business Tips

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Covid-19 Residential Appraisers Tips on Staying Safe

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Condo vs. Townhouse for appraisers

By on March 15, 2019   /   AMCs, appraisal how to, AVMS, commercial appraisal, data, listings, Mortgage applications, mortgage loan volume, real estate market, Strange homes, unusual homes, weird homes, zillow   /   1 Comment
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Is It a Condo, a Townhouse, a Site Condo or None of the Above?

Excerpt: When appraising townhouses, I always search the MLS for both single-family attached sales as well as condominium sales. Why? It’s because at times, there is confusion between the differences. Often I see real estate agents list townhouses as condos when they are not actually condos and visa versa.

I totally understand why. When it comes to townhouses, it is impossible to know from an outward appearance whether or not it is a condo, or not. Before we get into that, what is a condominium and what is a townhouse?

Well written article. Worth reading.

My comments: The first question in appraising is always “what are you appraising?”. Some appraisers just look at what structure is there. You are appraising the form of ownership, the land and what is attached to the land. With condominium form of ownership, you own the airspace. It does affect what you can do with a home. Some people don’t like HOAs and dues. I sold my house on the water in 2008. There was a large rear yard that was on a “tidelands lease” with an annual payment to the city. It was recently re-listed and only included the original 4,000 sq.ft. lot, not the leased land. Both showed up on plat maps. I wonder what the appraiser for the sale will say about it?

About 20 years ago I appraised a detached home in a project built in the 1980s with both attached (stacked condo style,  duets – sets of 2 semi-detached homes, and townhome (attached) style) plus detached homes. The owner, the HOA president was surprised to learn that they were all condos. I had a title report I showed to him. (The detached homes are now called site condos.) Another nearby small development of sets of two homes (duet or semi-detached) built in the 1960s did not have any common ownership or dues. I have seen these in other nearby cities also.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Will the last appraiser turn out the light?

By on February 7, 2019   /   AMCs, AVMS, future, george dell, mortgage loan volume, statistics, USPAP, weird properties, zillow   /   Leave a comment
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Is the Appraisal Profession Dying?

By George Dell, MAI

Excerpts:
Yes. Appraisal as we know it is dying.
Can it be saved? No.
So what should I do? What should “we” do?

The data has already been gathered. The analytics software is free. The pictures have already been taken. “Let’s Make a Deal!”

Analysis requires judgment. Human generalization is enhanced by computation. Complete data can be enhanced/cleaned as well as “confirming a comp.” A point value is an inherent part of a predictive value distribution. A documented, reproducible result is the most credible, believable answer.

My comments: I believe that human appraisals will still be needed. There are times that a human appraiser is needed to interpret results, and “go beyond” the data for Highest and Best Use, Unusual properties, etc. Lenders will move to computerized risk management, once investors will accept this. Most residential lender valuations will not need humans as the value of an individual property in investors’ portfolios is not critical. Of course, when the market inevitably crashes, there will be no appraisers to sue to recover some of the lost money. Maybe our E&O premiums will go down.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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AMCs and Respect for Appraisers??

By on January 31, 2019   /   AMCs, george dell, real estate market, weird homes, weird properties   /   Leave a comment
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AMCs and Respect for Appraisers??

By Rachel Massey, SRA
Excerpt: …an example of an AMC that is not paying attention to the comments from the declination. If an appraiser declines due to coverage area, then it should not be reassigned. But also, if appraisers decline because the fee is inadequate, is upping it a paltry $25 going to cut it? In the time between the initial order and the subsequent, ten days passed. Had the AMC picked up the phone and started calling appraisers, they may have had much better success at finding someone who first of all covers the area, and second of all, would tell them how much it would take for them to take on the assignment. AMCs and Respect for Appraisers??

My comments: Worth reading plus the appraiser comments, of course!!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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The Future of Residential Lender Appraisers

By on January 29, 2019   /   AMCs, appraisal business, Appraisal fees, future   /   Leave a comment
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What if you don’t want to do desktop bifurcated appraisals or do the very tough appraisals that don’t work for AVMs? Or wait, once again, for the lender market to finally come back.

There are many forces trying to get field appraisers out of doing full valuations for mortgage loans. Automation and Artificial Intelligence will increase this trend, as it has done in other professions. For example, Quicken software dramatically decreased demand for manual bookkeepers. Once lenders can determine which properties will work well with an AVM, and they will, there will be fewer human appraisals.

Recently, several appraisers emailed and called me saying their non-lender work would go down due to fee competition from desperate lender appraisals. Yes, this does happen in downturns, especially when it first starts going down fast. Estate appraisals are easy, and this market is affected. Plus other non-lender markets.

What is the answer? The only answer I know is to do litigation support. In my area, there are very few residential appraisers who will testify in court. When they go up against an MAI who does 1-2, or fewer, residential appraisals per year, they win. Good demand, repeat business, fees much, much higher than any other type of appraisal business, respected as an expert. Almost the opposite of AMC appraisals.

Why are residential appraisers very reluctant to do Expert Witness court testimony? Fear of the unknown I guess. I did them in the past and had no problems with testifying as an expert in court or in a deposition.

Next month in my monthly paid newsletter, I will have an article on Litigation Support and Court Testimony.  I have been writing a lot about doing non-lender work. There are lots of options, but this is by far the most profitable with very little competition.

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Geographic competency for appraisers

By on January 24, 2019   /   AMCs, appraisal business, appraisal management company, AVMS, Fannie, forecast, hybrid appraisals, lender appraisals, mortgage loan volume, real estate market, UAD, USPAP, zillow   /   Leave a comment
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At What Point Does an Appraiser Need Geographic Competency?

Excerpt: It seems that some, and I emphasize some, agents are of the mindset that if the appraiser’s office is not in relatively close proximity to the property being appraised, or if the appraiser doesn’t live in a nearby area, that they do not possess geographic competency. And they may be right.

However, the appraiser’s office location or where they live, in relation to the property being appraised, has little if anything to do with geographic competency!

To be geographically competent simply means that the appraiser has the skills and resources needed in order to competently complete the assignment, in harmony with the Uniform Standard of Professional Appraisal Practice (USPAP).

My comments: Why has this become so important? Once again, Lenders Run Appraising. AMCs do what they say. They put restrictions on how far away appraisers could be from their offices. Similar to the restrictions on how far away, or recent, comps should be.

Before USPAP and lender meddling, I used to appraise a large geographic area. If you are an experienced appraiser it is not hard to figure out neighborhoods, positive and negative factors, and read MLS for clues. Plus, contact local real estate agents and appraisers if needed.

I have been doing appraisals only in my small city for the past 2-3 years. The longer I appraise, the more I realized what I don’t know. I can hardly keep up with my very local market. Maybe I should only appraise within 2 blocks of my office ;> I go on tour every week but sometimes I miss a house if there area lot to see. Of course, that is always my best comp!!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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