Appraisal News and Business Tips

AVMS

8-16-19 Newz: Refi Mania – Paper vs. Google Maps – GLA Split/Bi-level homes

By on August 16, 2019   /   adjustments, appraisal business, AVMS, evaluations, square footage, zillow   /   Leave a comment
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Refis Way Up: Almost 20 Million Homeowners Could See A Mortgage Rate Drop

According to new data from the Mortgage Bankers Association, refinances have doubled since late. They’re now at their highest point since mid-2016.

The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume, rose 21.7 percent on a seasonally adjusted basis during the week ended August 9.

Freddie Mac shows the average rate on a 30-year, fixed mortgage is just 3.6% — a 15-point decrease from one week prior.

To read more, click here

My comment: Don’t work for cheap fees! Make money while you can!!

See below for the full MBA report on the refi boom.

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7-26-19 Newsletter 25th Anniversary! – Appraiser vs. Zillow – $11 Million View

By on July 26, 2019   /   adjustments, AVMS, deminimus, FHA, forecast, future, Mortgage applications, real estate market, weird properties, zillow   /   Leave a comment
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25th Anniversary of These Weekly Free Email Newsletters!!

On June 17, 1994, I sent out my first weekly email update to Tracy Taplin, Bruce Hahn, Tom Cryer, and John Warr. Bruce Hahn still subscribes. The topic was FIRREA/deminimus. I missed a few weeks (computer problems, traveling) but subscribers became “hooked” on their weekly news, jokes, rumors, and tidbits! The distribution list is over 17,000 appraisers now, and growing every day.

This newsletter started with my Compuserve account, then shifted to my personal email (Eudora) after the first web browser made the internet email much easier to use. I mostly had people write down their names and email addresses when I was teaching, speaking or doing my annual conference. It is very hard to figure out hand written email addresses!

I set up my website in 1998 and had an email form to fill out to subscribe. It took a lot of time to manually enter the names and email addresses. Keeping track of email changes was a nightmare. In 2003 I started using Sparklist to help manage the addresses but it was klunky to use and was getting very expensive. I got up to about 3,500 subscribers. In 2008 I started using Constant Contact, which is very affordable and easy to use. I put a signup form on my website home page. The number of subscribers increased rapidly and is now at over 17,000.

In the early years it had just a few paragraphs. By 2003 it was up to about 3-4 pages long. Since 2008 it has been about 4-5 pages, but was formatted to be much easier to read.

The topics have changed over the years, starting with FIRREA in 1994. Mortgage loans and appraisal orders have gone up and down significantly over the years. Significant mortgage broker pressures from about 1995 to the mortgage crash in 2008, AMC takover, Fannie’s CU in 2015, etc. etc.

I started my paid newsletter in June, 1992. In 2008, I switched to PDF-only and quit printing it. Lots more flexibility in length, plus a lot less expensive! Started with 12 pages. Now typically well over 12 pages, up to about 18 pages.

Note: I somehow forgot about it last month ;>

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7-19-19 Newz: Rates Going Down?- Appraiser Boards – AVMs Misunderstood?

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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AVMs Are Not Understood By A Large Swath of Non-Appraisers

Source: Jonathan Miller
Here are some recent survey results that show more than half of the respondents indicated, it is either NEVER appropriate or NOT SURE if it is appropriate for a non-appraiser to perform a valuation on a home.
So the jury is still out for a third of respondents but a third are absolutely sure it is inappropriate. One can infer that appraisers have an opportunity to convey what AVMs really are to the public.
Link to NAR AVM survey results click here
My comment: Good graphics and easy to read. Lots of topics including AVMs, desktops, bifurcated, etc. Results of a survey of NAR members. Lots of topics. Scroll down to AVMs, etc.
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4-4-19 Newz: Loan Apps Way Up – Straw Bale House – Revised FHA Handbook 4001.1

By on April 4, 2019   /   adjustments, AVMS, bpos, deminimus, FHA, marketing, Mortgage applications, Strange homes, unusual home, weird homes, weird properties   /   Leave a comment
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Tips for choosing comps on a unique home (straw-bale house)

By Ryan Lundquist
Excerpt: It almost sounds like the big bad wolf story, but there really are homes built from straw. Literally. Today I want to mention a few things about this type of construction, share some photos of a local straw-bale house, and then talk briefly about how I approached appraising this one.

Worth reading to find out what Ryan did!!

My comment: Very good tips on appraising unique homes. No lender issues as the appraisal is pre-listing and not for a lender… Sacramento  is a Very Strange place for a straw-bale home!!

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These Locations Were Abandoned Years Ago. Look At Them Today

Excerpt: We’re used to seeing places maintained and kept to a high standard. Usually, we travel to places that are made to look as nice as possible through consistent cleaning and maintenance. But what about the places that are left behind?

Fascinating!! Take a break from appraising and check these out!!

https://www.editorchoice.com/abandoned-places/

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3-14-19 Newz: Terrible RE Agent Fotos – Appraiser Article in Rolling Stone – Appraisers and Ipads/Tablets

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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The Property Valuation Reckoning is Imminent

How Technology is Highlighting Underwriting’s Shortcoming

Excerpt: some high-level aspects that can be used to get conversations started.

1. Increasing the availability of detailed, property-specific information, including both operational (ongoing) activities and transactions (sale, refinance, etc.).
2. The collection and analysis of macroeconomic, microeconomic, and capital markets influences that affect the real estate industry.
3. Using concepts such as systems thinking, systems engineering, and advanced technology such as artificial intelligence, machine learning, and deep learning to design semi-automated models that capture and make sense of both property-specific and larger capital markets factors.

Very interesting ideas and analysis. Long, but worth reading. FYI PropTech is a newish acronym. See the next link.

What is PropTech?

My comment: The article gives commercial examples, but is relevant for residential. I have been watching commercial applications, such as AVMs, attempted since the 1990s. The biggest problem is the lack of data. Costar is the major source of data in many areas and has not allowed its data to be commercially used by AVM developers, as far as I know. For leased commercial properties you must have income and expenses, which is not always available. For some types of non-leased properties, such as owner occupied warehouses, AVMs could work well.

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

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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Advertise with us. Very Good Open rates!

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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2-7-19 Newz: Appraisal Dying?- Dangerous Roads- Wrong Algorithms

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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What If the Algorithms Are Wrong?

Excerpt: Algorithms are everywhere…
Mathematician and data scientist Cathy O’Neil coined a term for algorithms that are secret, important and harmful: “weapons of math destruction.” Learn more about the hidden agendas behind the formulas.”

“Algorithms are opinions embedded in code. It’s really different from what you think most people think of algorithms. They think algorithms are objective and true and scientific. That’s a marketing trick. It’s also a marketing trick to intimidate you with algorithms, to make you trust and fear algorithms because you trust and fear mathematics. A lot can go wrong when we put blind faith in big data…”

Check out the video of the Ted Talk: 15 minutes and well worth watching. “The Era of Blind Faith in Big Data Must End” I love Ted Talks and have subscribed to the Ted Radio Hour Podcast for a long time.

My comments: Remember the Recent Mortgage Crash The Data Did Not Predict? Why? They did not include data from the Great Depression, the last time real estate markets crashed all over the country.

Who was saying something was wrong? Whistleblower Appraisers. Appraiser Petitions fell on deaf ears. Some appraisers spoke the truth and lost their appraisal businesses and/or were blackballed by lenders.

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

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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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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12-27-18 Newz:// Change Your Templates!!/Corelogic takeover?/Square footage?

By on December 27, 2018   /   appraisal regulations, AVMS, lender appraisals, real estate market, square footage, weird homes   /   Leave a comment
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CHANGE YOUR TEMPLATES!!

I am really going to try hard NOT to use 2018 on :
  • Appraisals with an effective date or date signed in early 2019
  • Checks I write manually. Will pre-date some of them for 2019.
  • Computer folders for appraisals and fotos (I have them by year).
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What Was the Most Popular Home of 2018?

 Just For Fun!!

Excerpts:
10. Cerro Gordo, Lone Pine, CA
Status: Sold for $1.4 million in July
Why it’s here: Seeking a little solitude? Look no further than Cerro Gordo, a bona fide ghost town perched 8,000 feet up in the Inyo Mountains in Southern California.

8. Beckham Creek Cave Rd, Parthenon, AR
Status: Currently off market
Why it’s here: This rustic estate carved into the side of the Ozark Mountains captured attention for its storied history of renovations. What started as a doomsday shelter was transformed into an A-list nightclub

Click here for fotos, more info, and 8 more popular homes!!
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7-12-18 Newz// 3 Story Homes, Auction Prices, Portable Architecture

By on July 12, 2018   /   adjustments, AMCs, appraisal, appraisal how to, Appraisal Standards Board, AVMS, Mortgage applications, unusual homes, USPAP, weird homes, zillow   /   1 Comment
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The Most Popular Article From Last Week’s Newsletter: Former Appraiser’s Hot Dog Stand!! FYI, unusual and weird stuff is very popular with appraisers ;>

Three-story Single-family Homes and Townhomes

Excerpt: Of the 729,000 single-family detached homes started in 2017, a little over 18,000 (2.5 percent) had three or more stories, according to National Association of Home Builder tabulation of recently released Census data.

In contrast, the 23,000 3-plus story townhomes represent 22.0 percent of single-family townhome starts.

More info here:

My comment: 3 story detached homes are not popular in very many areas. It is a long walk up to the 3rd floor. I have appraised them (attic conversions of a classic older home to a master bedroom, for example). I always look to see if an elevator can be added – usually has to be on the exterior of the home. Definitely a functional problem. I rarely see them on existing homes, except for attic conversions. Some newer detached homes have a small room on the 3rd story – family room, extra bedroom, etc.

For townhomes, I have seen a significant increase in 3 story new construction townhomes in my city (within the past few years) and other Bay Area cities. The first floor is a garage plus entry, second floor living room and kitchen, bedrooms on 3rd floor. Very profitable for home builders, especially in areas with high land prices and infill tracts. I have appraised them and the owners did not object to the 3 floors. There are sometimes a few townhomes that are 2 story.

My first apartment when I moved to San Francisco in my 20s was a third floor walkup. I vowed Never Again ;>

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