5 things to remember about “low” appraisals

By on September 20, 2019   /   appraisal business, Fannie, george dell, Mortgage applications, real estate market, unusual home, weird properties   /   Leave a comment
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Low appraisals, weed, & rent control

13516718 – white wood texture with natural patterns

By Ryan Lundquist 

Excerpt: I’ve been getting lots of phone calls and emails about low appraisals over the past couple months. Is something in the water? What’s going on? Let’s talk about this briefly. Then I have some quick thoughts on weed and rent control.

Excerpt: 5 things to remember about “low” appraisals:

1) This is common when the market slows.

2) This is even more common in a declining market.

3) It should happen if the contract is too high.

4) It can spur negotiation instead of kill a deal.

5) The value of course is too low sometimes.

To read more To read more, click here

My comment: Keep a close watch on your market. Don’t miss it when prices start going down!! But, No One Knows when the peak occurs!! I tell people that If I knew, I would be rich and probably not writing this newsletter ;>

On the other side, people ask me all the time about our very high prices (median around $900,000). I tell them to wait for the inevitable crash. I have been through three here when prices in my city dropped 30-40%. Other nearby cities were up to 80% declines. They stay down for a long time. Unfortunately, few buy then. “Herd” mentality, I guess. Do what everyone else is doing – not buying. The last property I purchased in 1995 for $375,000 I got 100% seller financing. It had been on the market for two years. I sold it in 2004 for $1,000,000. It recently resold for $1,700,000. Crazee price changes!!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Measuring Bi-level homes square footage

By on August 16, 2019   /   adjustments, appraisal business, AVMS, evaluations, square footage, zillow   /   Leave a comment
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GLA Issues When Appraising Split & Bi-Levels… Where The Ground Meets the Wall

Excerpt: When it comes to appraising split-level and bi-level dwellings, trying to calculate the gross living area (GLA) can be tricky. If you’re trying to figure out what the gross living area of one of these types of homes is, there are some important things to consider. For example, where the ground meets the exterior wall of a particular level. Measuring Bi-level homes square footage is tricky.

In real estate, the line at which the ground intersects with the foundation of a home, is called a grade or grade line. Did you know that where the ground meets the exterior wall of a level, can have a direct impact on value? How so? Let’s get down to the nitty gritty of it, shall we?…

To read more, click here

My comment: Very comprehensive, well written, article. Don’t miss the fun “split” video at the end. Hint: be sure to watch until 1 minute mark.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.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Why Don’t Real Estate Agents Measure Houses?  Humor

What is Included in Appraisal Square Footage?

Tax records and Square Footage in Appraisals

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Property inspection issues for appraisers

By on August 4, 2019   /   appraisal business, george dell, Mortgage applications, real estate market, statistics, unusual homes, weird homes, weird properties   /   Leave a comment
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Nothing New Under the Sun: The Varied Face of Appraisal Property Inspections

By Joshua Walitt

This article focuses on property inspections, which – to an outsider – might seem to be a straight-forward topic. However, given current changes in the valuation space, nothing is further from the truth: valuation, specifically the collection of data that supports a valuation method, has never been one-size-fits-all. There are many property inspection issues for appraisers

Excerpt: Sample of the questions about data sources:

The appraiser determines physical characteristics of the subject structure from limited-data county records, recent family photos showing two rooms, and a 15-year old appraisal.

A determination must be made whether appliances and utilities are functional and/or whether the property meets local codes

An appraiser performs an Exterior-from-street appraisal and reports a value opinion of $500,000; the next week, she performs a Exterior-and-Interior appraisal on the same property and reports a value opinion of $630,000.

To get the answers and more questions click here

My comments: Worth reading. Summary of a recent presentation by Walit. Lots of different scenarios presented. Note: I publish a graph of mortgage orgination 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.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Neighborhood Names and Appraisals

By on July 12, 2019   /   adjustments, appraisal business, appraisal how to, appraisal regulations, appraisal waivers, computers, rental market, weird properties   /   Leave a comment
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How much is a neighborhood name worth?

Excerpt: Despite some anecdotal examples, there’s little statistical evidence supporting the notion that a neighborhood’s brand or name contributes to a higher sales volume or a premium on price, according to Jonathan Miller, chief executive of the appraisal firm Miller Samuel.

“You’ll see buildings trying to hook into adjacent, better-known neighborhoods as a marketing ploy, but we don’t see that translate into a premium or more sales for doing that,” Mr. Miller said.

To read more, click here

My comment: Some interesting stories. I’m not sure if “renaming” works, but I do know that in some older established neighborhoods in the Bay Area, including my city, the name does make a difference in value.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Appraisal Neighborhood Analysis

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Appraiser values are developed and are not guesses

By on June 21, 2019   /   adjustments, appraisal business, appraisal regulations, bifurcated appraisals, Fannie, Mortgage applications, mortgage loan volume, real estate market, unusual home   /   Leave a comment
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Valuation Is Not A Guessing Game, It’s a Development Process

Excerpts: If you’ve ever had an appraisal of your home completed, perhaps you can relate to the following scenario. Appraiser values are developed and are not guesses.

The appraiser arrives at your home. You know that they have probably done a little research on what potentially comparable sales in the neighborhood are selling for.

The appraiser views each room in your home, taking photos and notes as they go. The appraiser asks you about any improvements you have made to your home in recent years.

At the end of the inspection, you assume that the appraiser has to have some idea about what the value is likely to be. You ask the appraiser, “Well…What do ya think?” What you’re probably really wanting to know is what the appraiser thinks your home is worth. At this point the appraiser is likely to give an evasive reply that doesn’t answer your question. Why?

To read more and see the funny animated fotos and gifs click here

My comment: written for homeowners, but some good ideas for appraisers. You can use for ideas for speaking to real estate agents, for example. Or, can give (or send) the owner a link to this article.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Zillow CEO sold his home for 60 percent of the Zestimate

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Don’t pick appraisal comps the old way

By on May 24, 2019   /   appraisal business, hybrid appraisals, unusual home, unusual homes, va   /   Leave a comment
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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. Don’t pick appraisal comps the old way.

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!!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Appraisals and Altered Listing Photos

By on March 7, 2019   /   adjustments, appraisal business, appraisal how to, Fannie, mortgage loan volume, real estate market, Uncategorized, unusual home   /   Leave a comment
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Digitally-doctored listing photos are on the rise

Excerpts: It will cost $2.40 for a paint job, $24 to replace flooring, and $40 to remove a wall or add a swimming pool.

Digital photo manipulation has become so widespread and cheap that home sellers are increasingly using the technology to spruce up their listings, the Wall Street Journal reported. This has the potential to create new headaches for end users, investors, appraisers and brokers…

Furthermore, with federal regulators pushing for automated appraisals that will make use of online listings, the hazards of doctored images could be spread to the general public.

My comments: How do AVMs and CU deal with this? Appraisers can always contact the agent to confirm what the home looked like. CU robo emails/calls to agents and somehow integrate this into the data?

Lenders and AVMs are now using agent MLS comments. I recently spoke with an appraiser where the lender disputed one of her comps because the MLS mentioned it was “close to shopping” and she did not. Yes, it was very close to a historic shopping street, but there was little to no off street parking on this street, as it was taken up by employees in the stores. The comp had 9 off street parking places for 2 units and sold for a premium price. Typically there is 1 or 0 parking spaces per unit in the historic apartments on the comp’s street. I recently tried to go to an open house on the street. The closest parking space was 3 blocks away. I skipped the open house. The agents often mentioned “close to shopping” to say something positive about their listing’s location.

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

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

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FHA appraisal problems

By on February 28, 2019   /   appraisal business, AVMS, deminimus, hybrid appraisals, mortgage loan volume, Strange homes, unusual home, USPAP   /   Leave a comment
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Common FHA Violations

Excerpt: I’ve been performing FHA appraisals since 2000. Believe it or not, on a regular basis, I have home owners and real estate agents who tell me that some of the things I point out as FHA violations, were never mentioned in other FHA appraisal inspections. So, I thought I would mention some relatively common FHA violations I see when making my FHA inspections.

My comment: Funny Fotos and Videos!! I have seen similar photos around but there are many here in one place. Written for home owners, but good reminders for appraisers.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Common Appraiser Violations

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

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

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

By on February 26, 2019   /   appraisal, appraisal business   /   Leave a comment
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What’s the difference between the Appraisal Today free weekly email newsletters in this blog and the paid monthly newsletter?

They are very different.
To see what is in the paid Monthly newsletters, see the FREE appraisal business articles at Appraisal Business Tips
To see samples of the free weekly emails,  go to www.appraisaltoday.com and scroll down the page to see links to the last 10 newsletters are available.  
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 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 Thursday, to go out early Friday morning. 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.
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.
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 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 12 to 17 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.
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.
To see what the paid newsletter is like, see the FREE appraisal business articles at Appraisal Business Tips 
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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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105
Alameda, CA 94501 Phone 510-865-8041
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Email   ann@appraisaltoday.com
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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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