Appraisal News and Business Tips

evaluations

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

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.

Read more!!

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

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

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.

Read more!!

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

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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11-29-18 Newz// Proposed $400k threshold for appraisals -The American Garage – a very strange room

$400,000 Proposed bank threshold for appraisals to be replaced by evaluations

Below are links to the proposed rule, what others are saying, and where to send your comments on the proposed rule.
OCC Issues Notice of Proposed Rulemaking to Exempt Residential Real Estate Transactions of $400,000 or Less from Appraisal Requirements
Excerpts: Rather than requiring an appraisal, the proposal would require that residential real estate transactions exempted by the threshold obtain an evaluation consistent with safe and sound banking practices.

Read what the OCC says in their announcement – one page www.occ.gov/news-issuances/news-releases/2018/nr-occ-2018-123.html

Comments will be accepted for 60 days from publication in the Federal Register.

Instructions in the full Full 69-page proposed rulemaking. Download the above link and search for comments

The word “evaluation” is included many times in the document. Google evaluation to see what it says.

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FDIC, OCC, Fed propose raising appraisal threshold for first time since 1994. Good analysis of how many loans would be affected:

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Push to cut back on home appraisals sparks controversy
By Ken Harney, long time nationally syndicated real estate writer who regularly writes about appraisal issues

Excerpt: The Trump administration wants to eliminate professional appraisals on a large number of home-sale transactions – a move that critics say could push the country back toward the see-no-evil days of mortgage lending that preceded the housing crash.

Includes comments from appraisers Ryan Lundquist and Pat Turner plus Appraisal Institute.
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Link to Appraisal Institute letter
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Get rid of appraisers while nobody’s looking
By Ryan Lundquist

 

Excerpt: I’m guessing these “evaluators” will be real estate agents who do BPOs, employees at banks and data firms, and probably some appraisers who need the work at $75-$100 a pop.

Read it here, plus the appraiser comments, of course.
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My comments:
– FIRREA increased the deminimus from $200,000 (1989) to $250,000 in 1994, but appraisals were still done. Why? Fannie and Freddie’s investors wanted them. FHA, VA, etc did not adopt the deminimus.
– What is an ‘evaluation’ and who does them? Hopefully, someone will tell me what is an evaluation?
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Read more!!

6-7-18 Newz//Square footage, Novelty Architecture, Appraisal Fraud

It’s not all about square footage in real estate

By Ryan Lundquist

Excerpt:
Myth: Extra square footage is always worth more.
Factors:
1) Single story vs two story
2) 55+ Community
3) Layout
4) Dangerous to always adjust

Worth reading, plus appraiser comments at:

Goofy Buildings: Revisiting the Heyday of California’s ‘Crazy’ Novelty Architecture – Giant hats, portly pigs, and drive-thru donuts.

Just For Fun!!

Excerpts: In the 1930s, a British traveler in Southern California wondered if the local architects had gone a little nuts. It was either that or he had stumbled into a fantasy universe. There was something trippy about the roadside shops he saw along the way…

The unusual businesses he saw weren’t on some Hollywood backlot, but were California’s classic coterie of mimetic architecture-that is, buildings shaped like, well, anything but buildings. According to Cristina Carbone, a professor of art and architectural history at Bellarmine University in Louisville, Kentucky, the practice dates back to at least the Renaissance.

Fascinating!! Lots of photos and interesting comments at:

Read more!!

4-5-18 Newz//Weird home interiors, Reduced AQB requirements and state regulators, Data analytical tools

The rage of Airbnb rentals (and stuff to keep in mind about value)

By Ryan Lundquist

Excerpts: The owner has a cash cow. Her second unit is bringing in $3,300 per month as an Airbnb rental, and it’s paying her mortgage. Since these types of rentals are all the rage right now, let’s talk about some important details to keep in mind from a value perspective. This isn’t meant to be exhaustive, but I wanted to share some things on my mind. I’d love to hear your take in the comments.

Topics:
1) Airbnb rent vs. market rent
2) Lenders and market rent
3) Investors & seller expectations
4) The fine print and a 12% tax

Click here to read the details, plus the appraiser comments:

My comment: This stuff gives me a headache ;> These seem to be everywhere now, especially room rentals. The Local Politics can be a mess. I look at the income as a business. Very different than renting by the month or year (at much lower daily rates), unless it is in a popular vacation rental market.

Read more!!

3-15-18 Newz//$2,358 PSF Small Tract House, Water Heaters, Affordable Beach Towns

$2,358 per sq.ft. for small home in Sunnyvale CA

Excerpt: This home on Plymouth Drive in Sunnyvale, Calif. recently set the highest price per square foot ever recorded by the Multiple Listing Service. The two bedroom, two bath home – 848 square feet in size – sold in two days for $2 million. It had been listed for $1.45 million. That means it sold for $2,358 per square foot, which is the highest price per square foot in Sunnyvale recorded by MLS Listings which has data going back to Jan. 1, 2000.

My comment: It did have new paint inside and outside plus refinished hardwood floors ;> Check out the fotos for a boring tract house. I got Mine. I am sooo glad I bought my house in 1985 for $145,000, worth about $900,000 now!! Mine is twice the size of this one, but not close to Google or Facebook (30 miles away, but could take the employee Google bus which comes here.)

The World’s Best Affordable Beach Towns

Just For Fun!!

Excerpt:
Here are two, not too far away:
3. Tulum (Mexico) Luxury condos in new developments and single-family houses under $100,000
9. Dominical Beach (Costa Rica)

Check out all of them at:

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2-22-18 Newz//ASB Meeting Live Streaming, McMansions, Risky Appraisal Alternatives

Who Ordered All the McMansions? 10 Cities Where They’re Piled Highest

Excerpt: You know them when you see them.

The imposing, ostentatious structures looming over surprisingly wee plots of land. The crazily mismatched architectural styles. The hipped roofs, gabled roofs, and pyramidal roofs-all on the same house! The bank columns. The front yard Romanesque fountains. The puzzling profusion of window sizes and types. The gigantic, two-story front doors.

Click here for more info and where there are lots of them:

https://www.realtor.com/news/trends/metros-with-most-mcmansions

Read more!!

2-15-18 Newz//Fannie Appraiser Webinar, Magical Appraiser Wand, Refis Dropping

The Magical Appraiser Wand

By George Dell
 
Excerpt: Can you just give me some magical software which will calculate my adjustments?

I get asked questions like this often. Can you just show me how to do a graph a client wants? Can you just give me your class stuff so I don’t have to come all that way? So often, the question degrades into something like “Why does the regression software give stupid answers?” I pushed the magic button!

People do not like the answer. You’re paid to do an analysis, not wave a magic wand, or push a magical appraisal button. We have another name for that, it’s called an AVM.   In addition to a point value prediction, AVMs can be tested for reliability. This is called the FSD (Forecast Standard Deviation). The AVM. It gets results. It’s fast. It’s cheap. And it provides a measure of reliability – the FSD.

Why would a client want something slower and more expensive with no measure of reliability? Why hire a pesky appraiser?

Click here for the answer!!

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