Appraisal News and Business Tips

appraisal business

5-24-19 Newz: Hybrids the new normal? – $9 million lot – Refi boom over?

Are you violating USPAP every day?

If you pick comps the old way, you may be violating USPAP every day!

Excerpts: (In the past) Data was hard to get. I was taught it was only necessary to use only three or four comps. And only a few comps were available. I did learn the importance of bracketing from my trainers (it was nowhere in my appraiser education). I was diligent, and of course, I picked my necessary and available comps carefully.

Then things changed. No one noticed. MLS came on line. Income properties came online. Public records came online.  All relevant sales became available. Instantly. Without thinking, I ignored the “as available” rule. But stuck to the ‘as necessary’ rule. And heck, everybody used just three comps. In fact, USPAP says I should do what my peers would do. And they all used just three or four.

So, what changed?

Today in most areas, all the sales are available. But are they necessary? Well no. All my peers use just three or four, so it is ok. But what if I want to do more than achieve credible results?

To read more, click here

My comment: I love George’s Most Excellent headlines plus his writings!! His blog posts are short, as they should be. But, sometimes we want to read more. The June issue of the paid Appraisal Today will have his 6-page article: “Old Versus New: Conflict or Opportunity?” about the past, current and future in appraisal analysis. Very interesting!!

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3-7-19 Newz: Digitally-Doctored Listing Photos – Mermaids and Camels at Open Houses – Manufactured Home Webinar

7 Women in the Building Business, Including an Appraiser

Excerpt: In 1986, when Dina Miller, her brother, Jonathan, and other family members founded the real estate appraisal firm Miller Samuel, “there were very few female appraisers,” said Ms. Miller, 56, whose specialty is specialty work – determining the value of a common hallway that a co-op shareholder wants to buy, for example, and handling stratospherically expensive property, including the top-floor apartment at 432 Park Avenue.

Scroll down the page to Dina Miller

My Sister, My Business Partner Gets Her New York Times Due By Jonathan Miller
Excerpt: The New York Times weekend real estate section has a cover story The Boss? You’re Looking at Her: 7 Women in the Building Business and my sister Dina was one of them. I’m very proud of her. She, myself and my wife are the principals of our firm Miller Samuel we co-founded with our parents in 1986. Dina is not a public person like I seem to be but has often said her brother (me) “never met a microphone he didn’t like” which I wear as a badge of honor. Congrats to my sister for her well-deserved recognition.

My comment: Not often an appraiser is featured in an article in a major national publication!! Hardly ever is it a female appraiser.

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2-28-19 Newz: Strange listing fotos – $400k deminimus – FHA violations

Strange and tricky listing fotos

A real estate photographer tells you how to spot staging tricks in listing photos

Excerpt: “If a photo is overly bright, over contrasted, or almost too perfect or synthetic, that should be a red flag,” Cato says.

Another is if the photo has the same level of lighting everywhere. “It’s weird,” he says. “If the brightness is the same throughout, that is just not natural. You have to show where natural light falls.”

My comment: Written about New York apartments and condos but relates to all listing fotos. We all use comp listing fotos. Tips on how to evaluate them, including digital alterations, is always good!!
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The Most Hilarious Pictures Taken By Real Estate Agents
Just For Fun!!

Excerpt: From horror movie-esque semi abandoned flats for rent to excessively unique home decor cases and very impractical architecture decisions, the real estate agents behind these funny ads didn’t even care to fix the places up before snapping the hilarious pictures. The caring levels were so low that there’s also a photo with a live bat in it, a huge pig laying around in the living room and feral horses relaxing in front yards. The most baffling part is that these funny photos were really used to advertise and show the good side of housings to possible tenants.

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What’s the difference between the Appraisal Today free weekly email newsletters in this blog and the paid monthly newsletter?

What’s the difference between the Appraisal Today free weekly email newsletters in this blog and the paid monthly newsletter?

They are very different.
In the Free weekly emails, there is a very wide range of topics each week. They are links to online articles with brief excerpts. I write the short comments. I get lots of emails with information every day plus blog posts. I look for the most interesting topics and include them. I write the newsletter on Wednesday, to go out on Thursday. I do  not typically plan what is in the newsletters. It is very last minute, as I try to make the content as recent as possible, appropriate for a weekly newsletter. Weird homes and properties are typically the most popular topics. Plus business and appraisal “how to” tips. It  is advertiser supported.

The paid monthly newsletters are totally different. They are typically about a few appraisal and business topics. I sometimes work on an article idea for several years before finally writing up an article. I do the research and writing plus have guest authors. They are 1 to 10 pages long  and take a long time to write up. Since they are in PDF format, the newsletters can be any length. I have never taken ads.
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I started the free email newsletter in 1994 with 4 subscribers. Bruce Hahn still subscribes. It is advertiser supported.  One of my first advertisers was Liability Insurance Administrators, who runs an ad in every email.
The paid newsletter was started in June, 1992 with 250 subscribers, starting in print and shifting to PDF in 2008. There have never been any ads.

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Free Email Newsletter
This email newsletter is a digest of what other people have written, with excerpts, links, and my comments. I limit the length to about 5 topics. When it started it was short and text only with about 4,000 subscribers and an occasional ad. Getting often handwritten email addresses and managing the list was a hassle and took a lot of time. In 2008 I started using Constant Contact and it grew to over 17,000 subscribers.

Around 2013 I started taking paid ad emails on other days, separate from these emails. As number of ads expanded, I could spend more time on the email newsletters.

I subscribe to many news sources , get hundreds of emails and monitor online discussion groups. On Tuesday I spend 3-4 hours going through these emails looking for something interesting. Wednesday I write up the newsletter, which takes usually 5-7 hours. Plus, of course, lots of time reading blogs, facebook posts, email discussion groups, etc. It is sent out around 5AM Thursday and posted to this blog on Friday.

It is a lot of fun deciding what to put in the newsletter and finding out which topics are the most popular. Hint: weird houses are very popular. USPAP is not very popular, but I put it in so you know what is happening.

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Paid Monthly Newsletter

The paid newsletter started as a printed newsletter in 1992. The 12-18+ pages are print style PDFs with 3 columns and wordprocessing (1 column) formats. The articles are much longer than this email, from 1 to 8 (or more) pages for each topic.

Everything is original, not just a link. Most of the articles are written by myself, but I have always had contributors. I like to write about business topics, so there are lots of marketing, etc. articles. When there are hot topics, such as CU, AMCs, etc. I write about them. Plus other appraisal related topics, mostly done by contributors.

Ever since I got my MBA in 1980, I look at everything from a business point of view. I had been appraising for 5 years at that time, but never took even a basic economics class. I needed to learn more bout business to be a better appraiser. For unknown reasons I don’t like to write about appraisal topics, although I love discussing them with other appraisers!!

I never run out of topics to write about. I regularly get ideas by communicating with other appraisers by phone or email.
If there is a topic you would like to read about, send an email to ann@appraisaltoday.com

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If you want a free sample newsletter, send an email to info@appraisaltoday.com requesting it.
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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105
Alameda, CA 94501 Phone 510-865-8041
Fax 510-523-1138
Email   ann@appraisaltoday.com

The Future of Residential Lender Appraisers

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.

1-24-19 Newz: AVMs vs. Appraisers- New Fannie Formz?- Future of Res Appraising

AVMs vs. appraisers

Excerpt: Different AVMs are designed to deliver different types of valuations. And therein lies confusion.

Consumers don’t realize that there’s an AVM for nearly any purpose, which explains why different algorithms serve up different results, said Ann Regan, an executive product manager with real estate analytic firm CoreLogic. “The scores presented to consumers are not the same version that is being used by lenders to make decisions,” she said. “The consumer-facing AVMs are designed for consumer marketing purposes.”

Written for consumers, but very well written and worth reading.

My comment: How often does someone tell you what Zillow says their home is worth? What do you say? I say Zillow works well on tract homes built in the past 10 years. This article discusses AVMs, regulators, appraisers, etc.
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1-17-19 Newz: $2M deminimus? – $3M Funding for Res Appr Startup – Appeals Board Members Fall Asleep

Should we raise the deminimus to $2 million? Or $5 million?

By George Dell
Excerpt: To simplify this discussion, let’s note two facts:  Appraisers can perform ‘evaluations’, normally using the same scope of work as an unlicensed “evaluator”.  What’s the difference?  It appears to me that there is one key difference.  The question is then:  Which part of the service is not required?  Is it the integrity/ethics, or the performance (such as using the right data and analysis)?

It appears to me that since unlicensed persons can charge less, have less tax/fee burden (for licensing, education, and errors/omissions insurance- the less ethical, less responsible ‘evaluator’ can always outbid the licensed appraiser every time.

Read the full blog post and appraiser comments. What do you think? Add your comments.

My comments: Interesting analysis by George, of course!! Credit unions are proposing to raise the commercial deminimus to $1,000,000. I didn’t know they made commercial loans. Guess they forgot about the commercial crash in the late 1980s.
As long as Fannie and Freddie (and their investors) require res appraisals, it won’t have a big effect on residential. The FIRREA deminimus in 1989 was $200,000. No effect on much of anything, even though we thought the Sky Was Falling.

The usual Mortgage Cycle: Good Business = lower requirements. Bad Business = higher requirements.

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1-10-19 Newz: Appraisal Firm Gets $15M VC Funding – Terrible RE Agent Fotos

A Response to: Mortgage Industry Expert Wants to “Eliminate” Appraisers

By Abdur Abdur-Malik
Excerpts: Rather than read the article and shrug, I decided to email the reporter who conducted the interview. I copied a number of the website’s editors and also the industry “expert,” the interviewee herself. Their contact information was available via a simple Google search, so below is an unredacted copy of the email I sent:

My comment: Well written and worth reading. Nothing new, but not the typical appraiser whining and/or ranting. Lots and lots of appraiser comments.
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1-2-19 Newz: Eliminating Appraisers, Hybrid Appraisals, Corelogic

Best TED Talks for Appraisers

Here is a sample:
Grit: The power of passion and perseverance by Angela Duckworth.
Her rousing treatise on the power of grit and determination. These valuable qualities can help you become your best self in relation to your appraisal career. Coming up with accurate estimates and choosing the right comps to use can be frustrating – but keeping calm and pushing through will mark you as an appraisal professional that folks will seek out for the hardest (and most lucrative) jobs.
My comments: Angela Duckworth is one of my favorite TED speakers. I listen to a lot of podcasts. The TED Radio Hour is one I listen to a lot. It combines several TED talks on the same topic with references on how to listen to the full TED talks. Fascinating!!
“TED is a nonprofit devoted to spreading ideas, usually in the form of short, powerful talks (18 minutes or less). TED began in 1984 as a conference where Technology, Entertainment and Design (TED) converged, and today covers almost all topics – from science to business to global issues – in more than 100 languages.”

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11-8-18 Newz// 8 ft Wide Townhome – Election and Banking Regs – Template Tips

What’s 8 Feet Wide and Has an Elevator? Manhattan’s Tiniest Fancy Townhouse – asking $5 million.

Excerpts: On a cobblestoned lower Manhattan street near the approach to the Brooklyn Bridge, a four-story house is about to go on the market for $5 million. The widest room measures 10 feet.

Small houses have a long history in New York. A Dutch-style gabled house at 75 ½ Bedford St. in Greenwich Village built in 1873 is 9 ½ feet wide. It is “popularly known as the smallest house in the city,” according to the city’s landmarks preservation commission. Its tenants have included poet Edna St. Vincent Millay, and anthropologist Margaret Mead.

My comment: I wonder what an 8 ft wide floor plan, with an elevator, looks like???
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7 Quick Tips for Using Appraisal Templates

Excerpt: Use these tips for proofreading appraisal reports:
5. Proofread Will a few typos or misspellings ruin your appraisal career? Probably not. However, they do seriously undermine your professionalism and suggest that you lack attention to detail. Take the time to ensure you are putting forth polished reports.

Focus on your most recent edits. When you edit something, it’s easy to introduce new errors, such as missing or repeated words. Proof new content and comments two to three times after you edit them, but also home in on those areas again during your final proof.

For more very good tips that we can all use click here:

My comment: I use a few templates for form reports and my assistant has to very carefully check each appraisal I writeup to be sure everything is okay! I gotta make sure I change the effective date of the appraisal and signed dates around the first of the year, of course…
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