appraisal business

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Every unusual home has appraisal comps

Appraising Unusual Properties

By Ann O'Rourke on September 1, 2023 / adjustments, appraisal business, Bad lenders, bias / Leave a comment

Tags: adjustments, appraisal business

Appraising Odd Properties: What’s the Weirdest Property You’ve Appraised Recently?

McKissock Survey

Excerpts: As a professional appraiser, you’ll likely encounter some strange properties from time to time. Odd properties tend to be challenging yet rewarding in terms of the fee. To gain insight into these types of assignments, we asked our appraisal community, “What’s the weirdest property you’ve appraised recently?” Thank you to the many respondents who shared stories about the most unique and complex properties they’ve come across lately!

Most of them fall into these categories:

Challenging and complex properties
Unique property types
Properties with atypical characteristics
Historic properties
Rural properties
Non-compliant properties

“A yurt, a space dome, and a two-story single-wide mobile home. This was two single-wide mobile homes stacked on top of each other with a spiral staircase that was encased in semi tractor trailer chemlite panels. The stories behind them are lengthy.”

“It was a house on three lots. It has been added on to over the years. The GLA is 3200sf and there are two separate basements with a total 1100sf. There are funky angles, two kitchens next to each other divided by a wall. It was only 3 bedroom, but had 3.1 bathrooms. It had 3 family rooms on the GLA. Lots of weird spaces.”

“A custom-built art school built by artist named Solonevich that is used as a single-family dwelling. Every couple feet was a random angle. Nearly impossible to measure accurately.”

To see more examples, Click Here

My comments: I was inspired by this post and included two unusual homes in this newsletter. The one below with a jail is a good example! Down the page is a $1 listing.

If the appraisal is for lending purposes, be sure to find out if it is “lendable” before spending much time on it. Lenders and CU/AVMs, like nice newer tract homes.

Whenever two appraisers meet, there is never a lack of conversational topics! This one is very popular! Be sure to get a higher fee, of course. These properties are an excellent learning experience. If your business is slow, now is a good time to do the “tough ones.”

Highest and best use are often the issues that are the most tricky for me, especially if you have to consider non 1-4 unit uses. HBU is a regular issue for the older commercial and mixed-use properties I appraise.

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Appraiser Salaries

By Ann O'Rourke on August 25, 2023 / appraisal business, humor, non-lender appraisals / Leave a comment

Tags: appraisal business, humor, non-lender appraisals

What’s the Average Real Estate Appraiser Salary?

Excerpts: On average, appraisers earn $102,620 a year. However… the average appraiser salary varies significantly across license levels.

Trainee appraisers earn an average annual income of about $53K. Licensed appraisers earn approximately $89K per year. Certified residential appraisers earn more than $101K annually. And certified general appraisers earn the most, making approximately $145K per year.

Like with many professions, the more time you put in, the more your hard work pays off. Average earnings tend to increase the longer an appraiser is in the profession, with the greatest jump being from 0-2 years of experience to 2-5 years of experience. Appraisers who have put in 16+ years in the appraisal industry tend to make the most ($118K), while those who have less than 2 years of experience earn the least ($43K).

To read more and see the charts, click here

My comments: Mckissock results are from their own survey of appraisers. I have seen this type information before, but mostly from contacting companies, recruiters or government databases. Most res appraisers are fee appraisers, but this lets you know the relative income levels based on various factors.

If you’re thinking about upgrading your license, this illustrates the income levels. For example, I do both commercial and residential appraisals, a significant positive factor in my income. When one is slow, I do more work in the other. Of course, if you are only licensed you should upgrade ASAP.

Relatively few residential appraisers have salaried jobs, but they are available at lenders, AMCs, assessors, etc.

My first appraisal job at a county assessor’s office in 1975 paid $900 per month. I would have never become an appraiser without a salaried job. Also, due to “affirmative action” at that time, women were hired for the first time as appraisers at assessor’s offices and lenders. An appraiser I know was hired by FHA as an appraiser trainee. She was previously a secretary. There were few women at my appraisal classes.

Until the early 1990s, when lenders outsourced appraisals to fee appraisers, most res appraisers had staff lender jobs.

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Apps for Appraisers

By Ann O'Rourke on August 18, 2023 / appraisal business, appraisal forms, data, Fannie Forms, Freddie, non-lender appraisals, real estate market / Leave a comment

Tags: appraisal business, Fannie, Fannie forms, future, non-lender appraisals, real estate market

7 Must-Have Apps for Appraisers

By: McKissock

Excerpts:

1. Dragon Anywhere

Dragon Anywhere is a dictation and speech-to-text app that allows you to create, edit, and share documents from your mobile device. This professional-grade dictation service could save you tons of time on typing reports and taking notes in the field. The company boasts a 99% accuracy rate as well as powerful voice editing capabilities. Dragon is very well-liked among appraisal professionals, making it number one on our list of must-have apps for appraisers.

6. Genius Scan

This app gets a lot of love from appraisers. Genius Scan makes it easy to scan, upload, and share documents using your mobile devices. It can even scan handwriting and convert it into text. This tool is excellent for making copies of tax records, floor plans, etc. Over 200 million users and thousands of small businesses are currently using Genius Scan. This app could be a lifesaver for your workfile creation.

To read about the other 5 apps, click here

My comments: Worth checking out. When business is slow is an excellent time to look for new apps, learn how to use your MLS and forms software, etc. etc. Dragon has been around a long time and is popular with commercial appraisers.

Fannie: Words and Phrases in Appraisals

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ChatGPT for Appraisers

By Ann O'Rourke on August 13, 2023 / appraisal business, appraisal how to, bias, liability / Leave a comment

Tags: appraisal, appraisal business, appraisal how to, bias, liability

ChatGPT: Valuable Tool or a Replacement for Real Estate Appraisers?

by Dustin Harris, The Appraiser Coach

Excerpts: ChatGPT: A Game-Changer for Appraisal Work

For those who have embraced it, ChatGPT has been transforming multiple aspects of appraisal work, such as:

Appraisal Work:

Writing narrative
Market analysis
Market-specific information
Descriptions of adjustments
Terminology
ResearchMarketing:
Creating lists
Writing emails and messages to current and potential clients
Crafting blogs
Strategizing networking and relationship development
Writing presentations for ‘lunch and learn’ events with real estate agents
Crafting the perfect apology letter when you upset a key loan officer in your small town
To read lots more, click here
My comments: Many thanks to Dustin for writing this article! I have not had time to use it, but have been reading and watching demos about how it can be used for appraisers for awhile. It definitely can be very useful, as Dustin explains. It can be tricky at first to use, but Dustin explains it.

I recently had to renew my California Driver’s license, as I am over 70 and had to do a written exam and eye test. I had difficulty setting up an appointment and clicked on “Chatbot”. It was much friendlier than any other Chat support I have used. I recognized the use of software similar to ChatGPT.

Fannie: Words and Phrases in Appraisals

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The Future of Residential Lender Appraisers

The End of Lender Appraisals?

By Ann O'Rourke on August 4, 2023 / appraisal business, bias, real estate market, USPAP / Leave a comment

Tags: appraisal business, Fannie, real estate market, USPAP

The End of Home Appraisals?

By Jeremy Bagott, MAI

Excerpts: In his 1946 essay “Politics and the English Language,” the late British novelist, essayist and critic George Orwell examined the connection between political orthodoxies and the debasement of the English language. In a truly Orwellian move, mortgage giant Freddie Mac recently announced its intent to censor an arbitrary collection of words such as “desirable,” “safe,” “well-kept,” “student” and “crime” when they appear, in any context, in the hundreds of thousands of appraisal reports it relies on in mortgage underwriting. It would be hard to make this up.

As with all banned words, Freddie’s list will lead to the need to ban additional words over time as appraisers, expunging the word “desirable,” will find synonyms when analyzing market reaction to the views of two homes or to the cul-de-sac location of a home versus the midblock location of a comparable. When discussing how market participants view side-by-side school districts, appraisers will figure out they can use synonyms like “advantageous,” “preferable,” or “beneficial” instead. Soon, these words, too, will need to be banned. In a college town, the banned word “students” will become “matriculants,” a word that will likewise need to be banned.

The attack on the protected speech of independent appraisers erodes their ability to describe how the properties they appraise relate to the preferences of market participants. The censorship is part of a march toward what appraiser and podcaster Phil Crawford has coined “universal basic home value” – a utopian vision among idealogues in which government technocrats dictate the supposed value of a property using algorithms and machine learning. The censorship began with Fannie Mae, and has now predictably spread to Freddie Mac.

To read more plus appraiser comments, click here

My comment: Worth reading. Lots more AMC/lender appraisal correction requests. Last week’s email had a discussion of the “words” which got a lot of clicks by appraisers wanting more information.

Fannie: Words and Phrases in Appraisals

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Lenders Not Using AMCs for Appraisals

By Ann O'Rourke on July 1, 2023 / appraisal, appraisal business, Fannie Forms / Leave a comment

Tags: appraisal, appraisal business, Fannie forms

Lenders Not Using AMCs for Appraisals

By: McKissock June 23, 2023

Excerpts: Some appraisers seek alternate ways to find work outside of appraisal management companies (AMCs). One strategy is to pursue opportunities to be engaged directly by financial institutions and banks by being included on their fee panel. To help you get started, we asked our appraisal community, “What advice can you offer on how to identify financial institutions and banks that engage appraisers directly, without involving AMCs?” Here’s what they said.

Below are helpful tips on how to find financial institutions and banks that engage appraisers directly on fee panels. In a nutshell, our survey respondents recommended that you should:

Look for small, local banks and lenders.
Network to build relationships.
Join the Mercury Network.
Simply ask around!

To read more, click here

My comments: Short and worth reading. When I started fee appraising in 1986, my first client was a small local bank with a few nearby branches. After AMCs took over, the bank continued to do their own appraisal management. Their volume went up and down with mortgage rates, but they always had some appraisals to fee out. Even today, their regular fee appraisers get some work.

Fannie: Words and Phrases in Appraisals

By Ann O'Rourke on June 16, 2023 / appraisal business, Fannie, non-lender appraisals, ROVs / Leave a comment

Tags: appraisal business, Fannie, non-lender appraisals, ROVs

What Fannie Says Effective June 29, 2023

Say This, Not That: Words and Phrases to Replace in Your Appraisal Reports

By McKissock

As part of our contributor series, Julie Molendorp Floyd gives tips on how to use more objective language in your appraisal reports ahead of the new Loan Collateral Advisor (LCA) alert messages that will take effect June 29, 2023.

Excerpts: Following that thought process, our appraisal language has simply got to change to reflect current times. In addition, our lenders and GSE’s are implementing tools and programs to identify when “Certain prohibited, subjective or potentially biased words or phrases are included in appraisal reports.”

(Freddie Mac Announcement: “Loan Collateral Advisor: Starting June 29 New Messages Alert Users to Certain Unacceptable Appraisal Practices,” April 28, 2023)

To read, click here

So, if we have the technology and tools to present our conclusions in clearer, fact-based ways, let’s get ahead of the program and make the changes proactively.

None of us enjoy completing revision requests. They take time, effort, and ultimately do not contribute to our bottom line. However, revision requests are part of an appraiser’s life. How can you go about crafting your appraisal report to avoid a revision request for “problematic language” or “unsupported conclusions”? Let’s dive into some words or phrases that should not be included in your appraisal reports and uncover ways to convey your meaning in a compliant, credible way.

Topics:

Moving toward fact-based language
Words and phrases to replace in your reports
Samples:
Say This Not That:
Within 10 blocks of shopping areas — Convenient to shopping areas
Conforms to current market trends — Traditional
Primary bedroom, ensuite — Master Bedroom

To read more, click here

My comments: If you do lender appraisals, read this post.

Changes in names is nothing new for appraisers. Since FHA, etc stopped redlining since the 1970s, appraisers have been asked to avoid certain words. Now Fannie’s computers will let lenders know.

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Quality Adjustments for Appraisers

By Ann O'Rourke on June 9, 2023 / adjustments, appraisal business, appraisal waivers, desktop appraisals / Leave a comment

Tags: adjustments, appraisal business, appraisal waivers

Quality Adjustment Research and Methodology: The Basics

By McKissock

Excerpt: Quality and condition are not the same. Quality refers to the quality of items, materials, and construction. When making appraisal adjustments, examine the quality of your data and remember that any quality ratings in your county records or MLS are not always reliable. Here are some basic things to consider regarding quality adjustment research and methodology.

Reliability of data

You need to consider: What is this data telling me? How reliable is that data? If you’re using county data, and you’re looking at quality ratings in there, how reliably do they rate properties? Should you even be using that data?

To read more, click here

My comments: The blog post has a link to Quality Ratings. Quality is sometimes difficult to determine on the subject and very tricky on the comps. Another appraisal challenge!

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Appraisers: Watch for Concessions and Kickbacks

By Ann O'Rourke on June 2, 2023 / adjustments, ADUs, appraisal business, FHA, non-lender appraisals, real estate market / Leave a comment

Tags: adjustments, ADUs, appraisal business, FHA, real estate market

Concessions, Kickbacks, and the Appraiser’s Nightmare

by Richard Hagar, SRA

Excerpts: What Appraisers Must Do

There are many steps appraisers must follow, more than I can list here. However, you should start off by listing and describing the concessions. Learn how to provide an accurate value conclusion that protects the appraiser from the potential ramifications of their bad acts.

On the first page of FNMA’s form, they ask this question:

“Is there any financial assistance [loan charges, sales concessions, gift or down payment assistance, etc.] to be paid by any party on behalf of the borrower?”

The appraiser has no choice when faced with this question, they must answer and if they get it wrong…then the appraiser is in trouble. After disclosing the information, the appraiser’s next task is to determine how the concessions have impacted the sales price. Federal law, FNMA/FHLMC guidelines and USPAP all point to a solution.

Solutions to Keep You Safe

Make sure you have a complete signed purchase contract.
In the appraisal, list how many pages of the contract you have in your possession (In case someone is hiding pages from you).
List the concessions on page 1 and in the final reconciliation.
In the sales grid, list any known concessions that were involved with the purchase of a comparable….

To read more click here

My comments: Some good tips on how real estate agents try to deal with this. I have known Richard for many years. He is an expert and is a most excellent instructor. I have taken many of his seminars over the years.

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