Appraisal News and Business Tips

bifurcated appraisals

10-4-2019 Newz: Comp Photos – Waivers – No Permits – Rubik’s Cube

By on October 4, 2019   /   adjustments, appraisal, appraisal waivers, bifurcated appraisals, evaluations, george dell, Mortgage applications, real estate market, square footage, unusual home   /   Leave a comment
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When 1,000 square feet doesn’t count

By Ryan Lundquist

Excerpts: One of the most interesting homes I’ve seen just sold. It was brand new, four stories, and a halfplex. Oh, and on paper it was 3,000 sq ft, but about 1,000 sq ft didn’t count in the square footage. This is definitely a conversation piece, so I’m thankful Realtor Brian McMartin agreed to do a Q&A. I hope this will be valuable and interesting. Any thoughts?

Quick points:

This house has 1,000 sq ft that is not permitted as square footage. The “non-conditioned” space looks just like square footage.

Understanding permits really does matter…

Interview with selling agent plus Ryan’s (and appraisers’) comments. Worth reading.

To read more, click here

My comment: I see non-permitted areas in homes a lot in my city, typically converted basements. Fortunately, I can get the permit info easily from the city and the property owner does not “get into trouble” because of my inquiry. I am lucky.

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9-27-19 Newz: Bifurcated Appraisals and Inspections; Abandoned Resorts – New CA Independent Contractor Law

By on September 28, 2019   /   AMCs, appraisal business, AVMS, bifurcated appraisals, CU, Fannie, lender appraisals, Mortgage applications, USPAP, weird properties   /   Leave a comment
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Crowdsourcing Appraiser Data

By Jerin Harper, IFA, ASA, CREA

Excerpt: Just imagine the possibilities of having a hyper-local database…

If you are not in the business of data you will be out of business. I’m not sure if I heard this somewhere or not, but this mantra has been in my head for a while now. Being in the data business is essential for every business today. We see it across all industries where the companies that embrace data are still in business, and the companies that didn’t make that pivot are out. In our profession we saw Fannie Mae get into the big data business with the creation of CU. CoreLogic took their data business to a whole new level when they bought Alamode. One of my favorite examples is sports: just in the last several years data & analytics have completely changed the way football, basketball, and baseball is played— and those sports have been around for 100 years. It doesn’t matter what business you’re in, you have to be able to capture the right data and communicate it effectively.

I suggest that appraisers start crowdfunding their data.

To read more, click here, plus the many comments,

My comment: A never ending idea… Who “owns” the appraisal data? I remember the days of the CMDC (California Market Data Cooperative) where appraisers, including myself, shared their appraisal data, long before the Internet. It still exists and is owned by FNC. Their historic data is available.

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9-13-19 Newz: FRT issues – Why Suburbs Look the Same!

By on September 13, 2019   /   Appraisal Foundation, Appraisal Qualifications Board, appraisal regulations, Appraisal Standards Board, bifurcated appraisals, evaluations, Fannie, fees, hybrid appraisals, lender appraisals, Mortgage applications, real estate market, rental market, Strange homes, unusual homes   /   Leave a comment
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Fuggerei

In this truly magical place, rent hasn’t been raised since the year 1520! Just For Fun!!

Excerpts: After minting coins for the Vatican and making a name for himself as one of Europe’s greatest early entrepreneurs, Jakob Fugger (aka “Jakob the Rich”) turned his eye toward those in need. What emerged from this vision has persisted as the world’s oldest charitable social housing complex.
In the year 1517, construction began on Fugger’s vision for what would become the golden-walled enclave of Fuggerei, which he created as a way of providing affordable homes for day laborers, artisans and their families. Though it sustained heavy damage during a bombing raid in WWII, the community was restored to its pre-raid condition, where it has remained uninterruptedly inhabited since its founding in 1520. The city-within-a-city consists of private residences including 67 houses, 147 apartments, St. Mark’s Church, and an administrative building.
To read more, click here

My Comment: Wow!! Really gives me a perspective on rent control here in California and in my small city. Rents are increasing all over the country.

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9-6-19 Newz: Bidding Wars – Dumb Mistakes – U.S. Abandoned Places

By on September 7, 2019   /   adjustments, bifurcated appraisals, george dell, hybrid appraisals, Mortgage applications, mortgage loan volume, real estate market, weird homes, weird properties   /   Leave a comment
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Can Smart Appraisers Make Dumb Mistakes?

By George Dell, ASA, MAI, SRA

Excerpt: I am a smart and educated, award-winning appraiser. It is not possible for me to be irrational. Of course not. You can see that. I can see that.

A high IQ and education won’t necessarily protect you from highly irrational behavior—and it may sometimes amplify your errors. David Robson, in an Excerpt from The Intelligence Trap

Oh No! Who is this guy!? Doesn’t he know how smart I am? Why, even my peers have said I am smart. I pride myself on my critical thinking. Even my kids say that! What more proof do you need? Let’s get this straight: I am rational, smart, of high IQ and extremely educated, especially in my chosen field!

Recently, scientists have started to measure what things go with irrationality. There is even a name for this field of study, this measure: dysrationalia. The studies roughly parallel the studies of dyslexia and dyscalculia (difficulty in dealing with number things).

Understandable, Well Written and Interesting!! To read more, click here

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8-9-19 Newz: Evaluations and USPAP – Zoning Codes – Inspection Standards?

By on August 9, 2019   /   appraisal how to, appraisal regulations, Appraisal Standards Board, bifurcated appraisals, evaluations, FHA, Google, Mortgage applications, USPAP   /   Leave a comment
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9 Very Funny Quotes for the Self-Employed Appraiser

Just For Fun!!

Some great, very funny, animated gifs ;>

Here are a few comments:

“The crappy thing about being self-employed is I never believe myself when I call in sick.”

“Things people say: ‘It’s Friday!’ Things self-employed people say: ‘It’s Friday?’”

To read more, click here

My comment: We all need some appraiser humor! Something for everyone in this blog post!! Unfortunately, animated gifs usually don’t work well in these email newsletters. You Just Gotta See Them!!

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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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6-28-19 Newz: Coester Loses Lawsuit – Fannie Appraiser Update – Secret Stairways

By on June 28, 2019   /   AMCs, appraisal how to, appraisal management company, bad appraisers, bifurcated appraisals, Fannie, hybrid appraisals, Mortgage applications, real estate market, weird properties   /   Leave a comment
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What I think about bifurcated appraisals

Have you ever done a comp check for a mortgage broker or lender in the past? They are appraisals. You only have public records and maybe MLS. You may have driven by the property, but probably not.

What about drivebys? You drove by the outside, but never saw the rear or interior.

With bifurcated appraisals, at least you have photos, measurements of the exterior, descriptions of what the exterior and interior rooms look like, etc.

What about having trainees do them, under your supervision? A great way to get new appraisers started. I spoke with one appraiser who is doing this.

All appraisers rely on public records, MLS photos and descriptions, etc. We don’t know how accurate this data is.

Check out the company doing bifurcated appraisals and their forms software data handling. Do not work for one that requires that you manually fill in a 1004P, for example. How long have they been in business? Are there appraisers in management?

Whether or not you do them is a business decision. They are less risky than comp checks and drivebys. You have more information, assuming they do not make up the photos, sketch, etc.

The Bottom Line: appraisers don’t like change, just like most people. Some adapt, some decide not to change.

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6-21-19 Newz: MLS Cyber Attack – McMansions – FHA and Risky Loans

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: insert image

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.

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5-31-19 Newz: Hit the Sales Price – Hybrid Warning – Guitar shaped Hotel

By on May 31, 2019   /   adjustments, bifurcated appraisals, commercial appraisal, humor, hybrid appraisals, Mortgage applications, real estate market, state appraiser regulators, Uncategorized, weird properties   /   Leave a comment
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Why do appraisers hit the sales price?

By George Dell

Excerpt: A recent study includes a graph which shows that some 90% of appraisals hit the sale price exactly, or were higher, while only some 10% were below the sale price (when the sale price is known).

Is this a bias on the part of appraisers, or is the bias the cause of the system? What could possibly cause this strong upside skew?

First, ignore the ongoing pressures from the entire ‘loan industry’ to make the loan, make the commission, make the quota, make the bonus, and look successful. Ignore the claimed purpose of the public trust (of our quasi-governmental standards and licensing quagmire).

The goal of protecting the public trust failed, and will fail again— this time with different excuses and blaming— but it will fail again.

Let’s look at some underlying economic truths and social/governmental policy. What economics and public policies come into play here? Three come to mind immediately:

To read the full, very interesting post click here

My comment: When I started my appraisal business in 1986, I was told by local very experienced appraisers to appraise at the sales price or I may be kicked off a lender’s approved list. Of course, since I was trained at an assessor’s office, I was shocked and refused to do this… There was always another lender client I could get.

Dell’s blog has very short posts. My June paid newsletter will have a much longer article written by him: “Old Versus New: Conflict or Opportunity?” It has a brief look into the past, including a photo of an acoustic coupler for connecting to remote sites. Plus, of course, comments on the future! I remember 30 baud transmission rates in the early 1980s connecting from my home PC to my company’s servers;>

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