Appraisal fees

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Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

What is an Appraisal “Inspection”?

By Ann O'Rourke on July 23, 2021 / adjustments, appraisal business, Appraisal fees, bias, FHA / 2 Comments

Tags: adjustments, bias, FHA

Appraisal Inspection Vs. Home Inspection

Excerpts: Why are these roles often confused? What is an Appraisal “Inspection”?

The root of many misconceptions about the appraisal inspection is the word “inspection” itself. It is true that as part of the appraisal process, the appraiser might perform some sort of onsite quality, condition, and functional utility survey of the property to determine its relevant characteristics and if it meets certain standards. For example, to the general public, the FHA requirements that an appraiser must operate certain systems in the home (plumbing, electrical, HVAC) seems similar to what a licensed home inspector does.

The Oxford Online Dictionary defines inspection as: “Careful examination or scrutiny”

Merriam-Webster’s Online Dictionary defines inspection as:

“The act of looking at something closely in order to learn more about it, to find problems, etc.; the act of inspecting something”

It’s somewhat of a benign definition, is it not? There’s nothing really scary there, yet many appraisers attempt to avoid confusion, and (potentially) limit their liability, by avoiding use of the word “inspection” entirely. Many appraisers use euphemisms for this term in their appraisal reports, such as “property visit” or “viewing.”

Even FHA got into the euphemism game with the publication of Handbook 4000.1, which went into effect in 2015. The words “inspect” or “inspection” generally do not appear in reference to an appraiser’s obligations. Instead, the words “observe” and “observation” are used.

To read more, click here

My comments: USPAP has never required an inspection. USPAP defines “Personal Inspection” as the following: a physical observation performed to assist in identifying relevant property characteristics in a valuation service.”

The word “inspection” is used in various locations, such as Advisory opinion A02, including Minimal level of Inspection.

The fourth exposure draft for the 2023 version has Section 1: “Review of Requirements about Disclosing a Personal Inspection.” Final comments deadline is today, July 23, 2021.

What are Pass through Bedrooms for Appraisals

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What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

New sewer line increases value for appraisals?

By Ann O'Rourke on January 22, 2021 / adjustments, appraisal business, Appraisal fees, appraisal how to, Mortgage applications, unusual homes / Leave a comment

Tags: adjustments, appraisal fees, appraisal how to, unusal homes

My new sewer line adds huge value, right?

January 19, 2021, By Ryan Lundquist

Excerpt: A new sewer line. That’s what 2020 gave my family as a parting gift before the year closed. Yep, just before Christmas, we had to replace our entire line at a whopping $13,688. I know that sounds crazy expensive, but we had four separate bids and went with the most reasonable one. In part it was so pricey because we had one hundred feet of the line under eighty feet of concrete.

The good news is my house is worth $13,688 more now, right?

To read more plus lots of appraiser comments click here

Covid-19 Residential Appraisers Tips on Staying Safe

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

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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NOTE: Please scroll down to read the other topics in this long blog post on fees, house settling, unusual homes, mortgage origination stats, Covid tips for appraisers, etc.

How accurate is the reported square footage from the tax records in your primary service area?(Opens in a new browser tab)

What is Included in Appraisal Square Footage?

By Ann O'Rourke on October 23, 2020 / appraisal business, Appraisal fees, square footage / Leave a comment

Tags: appraisal business, appraisal fees, square footage, strange house

Question: Can it count in the square footage?

Roof detail house

By Ryan Lundquist

Excerpts: Can you include it in the square footage? I get questions like this almost every week. Is it okay to count an accessory dwelling in the living area? What about a pool house? How about a man cave or she shed? Let’s talk about this.

The straight dope: It’s tempting to lump something else in the backyard into the square footage, but that’s not appropriate per ANSI measuring standards. Suppose you have to walk outside of the house into something else that is not directly accessible to the house. In that case, we’re really dealing with something that isn’t considered to be a part of the main house…

To read more, click here

My comments: Written for homeowners, but has some good remarks on square footage, such as “lumped square footage” in MLS. What is Included in Appraisal Square Footage can be tricky and controversial. It can also vary by geographic area.

Marketing and Management Tips for Appraisers

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What is most often overlooked by appraisers?

By Ann O'Rourke on June 5, 2020 / adjustments, appraisal business, Appraisal fees, bifurcated appraisals, commercial appraisal, Coronavirus, desktop appraisals, Fannie, fees, lender appraisals, Mortgage applications, unusual home, USPAP, weird homes / Leave a comment

Tags: adjustments, appraisal business, appraisal fees, appraisal waivers, bifurcated appraisals, Coronavirus, Fannie, mortgage loan volume, strange house, unusal homes, USPAP

Excerpt: We recently asked our appraisal community, “What’s the ONE thing that is most often overlooked by appraisers?” We received a wide variety of answers ranging from big-picture oversights to specific details. The most common answer we received was “Highest and Best Use.”…

Highest and Best Use (HBU)

This was the top answer, which was written in by about 8% of survey respondents “First question when doing an appraisal is the highest and best use. If there are two very different opinions of value on a property, different HBU is often the reason.”…

Obsolescence

Obsolescence is another item mentioned by multiple survey respondents. Appraisers cited both external obsolescence and functional obsolescence as being frequently overlooked.

“External obsolescence for the subject property – When I’m reviewing appraisals, I see this more often than other oversights. When I was performing retrospective reviews for FNMA, their biggest complaint was that appraisers did not point out external obsolescence for the subject and/or its impact on marketability (if there was an impact).”

“Functional obsolescence – Appraiser focus has changed over the years as subject functionality has changed.”

To read lots more, click here

Appraisal Humor

Appraisal business tips

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What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Value, Accuracy, and Misleading for Appraisers

By Ann O'Rourke on May 15, 2020 / Appraisal fees, commercial appraisal, Coronavirus, desktop appraisals, Fannie, FHA, lender appraisals, Mortgage applications, real estate market, unusual homes, USPAP, webinars / Leave a comment

Tags: appraisal fees, appraisal regulations, Coronavirus, Fannie, FHA, mortgage loan volume, real estate market, unusal homes

On Value, Accuracy, and Misleading…and How They are Different From What You Might Think!

By Tim Andersen, MAI

Excerpt: Let’s start this musing by addressing the issues of value, accuracy, and misleading. You might have looked at them differently in the past. Then we’ll tie these in the idea of the value conclusion in an appraisal being right or correct.

State appraisal boards level charges against appraisers. It is very common for appraisers to defend themselves against these charges by insisting their value is “right”. Or, they assert they have properly supported their value conclusion, or something similar. In reality, this argument is utterly irrelevant and carries no weight with the appraisal board.

IRRELEVANT!?

When it comes to value, accuracy, and misleading, the appraiser’s value opinion alone is irrelevant and weightless. This is because TAF has given state appraisal boards specific instructions. Those instructions are that the appraiser’s value conclusion is not to be a part of the board’s investigation. Nor is it to be a part of its deliberations. Therefore, it is not to be part of the appraiser’s defense since it is not part of the charges against the appraiser.

To read more, click here

My comment: Tim is a regular contributor to the paid Appraisal Today. He is The USPAP Expert and helps appraisers stay out of trouble with their state boards!! Tim also has an interesting podcast – link is on the top of the page.

Appraisal Humor

Appraisal business tips

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Very unusual bathrooms for appraisers(Opens in a new browser tab)

Infectious Disease Defined the American Bathroom: Appraisals

By Ann O'Rourke on May 8, 2020 / Appraisal fees, BATHROOMS, Freddie, humor, USPAP / Leave a comment

Tags: appraisal fees, BATHROOMS, Coronavirus, Fannie, humor, mortgage loan volume, USPAP

Cholera and tuberculosis outbreaks transformed the design and technology of the home bathroom. Will Covid-19 inspire a new wave of hygiene innovation?

Excerpt: Alter predicted that disease-avoidance would rise to the fore of bathroom design a few years ago, when he observed the traumatizing effects of the 2003 SARS outbreak on Toronto, which killed 44 people. But home design in general — and bathroom design in particular — has long been influenced by infectious disease. This isn’t a linear narrative with clear causation, but rather a convergence of advancements in science, infrastructure, plumbing, sanitation and design trends.

The modern bathroom developed alongside outbreaks of tuberculosis, cholera and influenza; its standard fixtures, wallcoverings, floorings, and finishes were implemented, in part, to promote health and hygiene in the home at a time of widespread public health concerns.

To read more, click here

Appraisal Humor

Appraisal business tips

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Coronavirus and Appraisals March 13 2020

By Ann O'Rourke on March 13, 2020 / AMCs, appraisal business, Appraisal fees, appraisal management company, AVMS, future, lender appraisals, Mortgage applications, mortgage loan volume, unusual homes, weird properties / 1 Comment

Tags: AMC, appraisal business, appraisal fees, appraisal management company, future, mortgage loan volume, unusal homes, unusual buildings

Appraiser’s (Changing) Role

Q&A with Mark Verrett, Chief Innovation Officer at Accurity Valuation

Excerpts: WRE: How can appraisers adapt to meet the profession demands?

Verrett: I think there are several ways to adapt to these challenges. The first is to work toward diversifying your practice away from 100 percent mortgage business niches. Our firm is a leader in green valuation, rural valuation, valuation consulting and litigation support and we help our offices diversify into those spaces. However, this solution isn’t for everyone….

To directly take on the challenges facing appraiser relevancy in the mortgage space, significant change is required. Appraisers need to unite to create a like-minded national voice that is not rejecting proposed changes for the profession, but rather working with stakeholders (regulators, lenders, clients, etc.) in conceptualizing, testing, tweaking, and ultimately modernizing the appraisal process on the mortgage side.

The appraisal community has a tough assignment in their role in this modernization. To be useful in the discussion, we need to challenge ourselves to be creative and open-minded, yet diligent in maintaining or, even better, improving the quality of the valuation being produced. I think it is extremely important for appraisers to listen and understand the needs of their clients and to creatively develop solutions that meet those needs.

Worth reading with some good ideas. To read more, click here

My comment: Accurity has franchisees and some very savvy appraiser officers and directors.

Covid-19 Residential Appraisers Tips on Staying Safe

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

Appraiser Covid Survey Results April 2020

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Previous Career Before Appraising

By Ann O'Rourke on November 22, 2019 / adjustments, AMCs, appraisal business, Appraisal fees, appraisal management company, lender appraisals, Mortgage applications, real estate market / Leave a comment

Tags: adjustments, appraisal business, appraisal fees, mortgage loan volume, real estate market

What Was Your Previous Career Before You Got Into Appraisal?

Excerpts:

The Top 3

Real estate sales (14%)
Mortgage lending (8%)
Insurance (5%)
Assistant or admin work (5%)
Banking (1%)
Others: 63%

To read more, click here Check out the respondent comments and a list of some of the many previous careers

My comment: I was a chemist before I started appraising. Really liked learning about science in school, but 7 years of lab work was too boring. I felt trapped inside. Saw an ad for “appraiser assistant” at the local county offices. “Work in the field.” I had never heard of it, so read a book about it at the library (1974). I got the job and still love appraising!! I didn’t see many science careers on the “Other” list. But, I think it prepared me well for appraising as I was trained to be very objective and analytical.

Covid-19 Residential Appraisers Tips on Staying Safe

The future of residential appraising(Opens in a new browser tab)

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Join the National Appraisers Online Forum

By Ann O'Rourke on November 8, 2019 / Appraisal fees, bifurcated appraisals, Fannie, fees, george dell, Mortgage applications, weird properties, zillow / Leave a comment

Tags: appraisal fees, bifurcated appraisals, Fannie, George Dell, mortgage loan volume, unusual buildings, weird properties, zillow

National Appraisers Forum

By Dave Towne

Excerpt: Appraisers, if you would like to learn from highly qualified peers (other than me! :), post questions, or offer your own comments, consider joining the FREE group, National Appraisers Forum (NAF). Use this link.

This is one of the best appraiser groups as all commentary is respectful. While not everyone always agrees with certain points, the discussions are not demeaning. There is a wealth of info participants share freely on a wide number of topics. The group has several moderators who monitor the posting activity.

One key point, NAF participants are not anonymous. You must use your name (at a bare minimum) when participating, which is required when signing up… Moderators are asking that anyone who wants to join should give their name as licensed, the state they are in, and their license number.

To read more, click here

My comments: This is my favorite appraiser online group! I get many emails from various sources for this newsletter and have been a member of many online communication places. Before the internet was widely available, I hosted live chats on aol and compuserve. Since then I have watched many online places. Unfortunately, just like any other topic, sometimes the groups end up doing lots of “flaming” (attacking another participants, etc.), negative comments, off topic, politics, etc. I quit going to these places.

Of all the groups I have subscribed to, National Appraisers Forum is the best for me. I have been a member since it started, or soon after. No complaining about AMCs, off topic, trolling and flaming, etc. The founder, Steve Smith, and the moderators keep it this way. Regular contributors are “high end” appraisers with many years of experience. Hot topics are often discussed.

There are well-managed appraisal groups on Facebook, but it is too hard for me to follow the threads, so I don’t go there very often. But, it may work for you. Join the National Appraisers Online Forum!

Another major factor is that you must use your real name, so we know who is commenting. Allowing anonymous postings can easily decay into a mess.

I will be updating my article ” How to connect with other appraisers online. What’s the best group for you? ” in a future issue of the paid Appraisal Today discussing other email chat groups, how to find other groups or start your own, Facebook, etc.

Covid-19 Residential Appraisers Tips on Staying Safe

How to communicate with appraisers online

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