Appraisal News and Business Tips

AVMS

4-4-19 Newz: Loan Apps Way Up – Straw Bale House – Revised FHA Handbook 4001.1

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

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

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

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

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?

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

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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8-24-17 Newz .Fannie Freddie appraisal waivers, AVMs and HELOCS, Passwords

The Traveling Apprentices of Germany

 And you thought appraiser trainees have it rough!!

Just For Fun ;>
Excerpts: They hitchhike across Europe, instantly recognizable in the wide-bottomed, corduroy trousers, white shirts and colored jackets that identify them as bricklayers, bakers, carpenters, stonemasons and roofers.
While on the road, journeymen are not supposed to pay for food or accommodations, and instead live by exchanging work for room and board. In warm weather, they sleep in parks and other public spaces. They generally carry only their tools, several changes of underwear, socks and a few shirts wrapped into small bundles that can be tied to their walking sticks – and that can also double as pillows.
In an adaptation of the old rules to modern times, journeymen do not carry devices like cellphones that allow them to be found. They carry digital cameras, if they like, and write emails from public computers.
My comment: Fascinating with great photos!! Yes, there are women travelers now…

Passwords: What if Everything You Know Is Wrong?

By Shelly Palmer
Excerpt:  According to the Wall Street Journal, Bill Burr (the man who wrote the NIST memo back in 2003 that recommended the cryptic craziness and frequent replacement guidelines) has had an epiphany. “Much of what I did I now regret,” said Mr. Burr, 72 years old, who is now retired. If the reporting is accurate, he had very little evidence upon which to base the NIST’s recommendations. (Sort of makes me think about the USDA Food Chart I grew up with. But that’s for another article.) Why were Mr. Burr’s assumptions wrong?…
Do what the experts are now telling you to do. Start using the longest passwords possible. I would not use correcthorsebatterystaple, but “passwordswedontneednostinkinpasswords” will absolutely do the job.

My comment: Very interesting article!! Plus the Fun Cartoons ;> Passwords are a Pain.. I think one of the most popular passwords is “password”. Looks like finally there is another way.

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