Fannie

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Appraising Fixer-Uppers

By Ann O'Rourke on October 15, 2021 / adjustments, appraisal how to, Fannie, real estate market / Leave a comment

Tags: adjustments, appraisal how to, real estate market

What About Those Fixer-Uppers?

Insights from a Seasoned Appraiser

By Steven Vehmeier

Excerpt: We’re all familiar with the term “fixer-upper.” For many different reasons, properties can come on the market in less-than-par condition. The degree and cost to cure become an issue to buyers and sellers, and a challenge for appraisers. At some point, it’s no longer “normal market value minus cost to cure equals as-is value.”

The terms “entrepreneurial incentidddve” and “entrepreneurial profit” are typically discussed in terms of investment property, but the principles involved can also be applied to the many fixer-uppers—whether the buyer is a “purely investor type” or an “owner-occupied investor type.” Maybe a couple of new terms should be discussed: “sweat equity incentive” and “sweat equity profit.”

To read more, click here

My comments: Most of my appraisals are for estates (date of death). I have never appraised a home that was ready for sale when the person died: staged, new paint and floor coverings, yards cleaned up, etc. I very seldom have any repair estimates or structural pest control or home inspection report.

I always assume the home is empty of furniture and “broom clean,” which I learned doing lots of REOs in the past. If a home is cluttered with personal stuff, the price will be lower. But, it can be fixed easily and inexpensively. If it is a mess, I tell the executor to call me when it is cleaned out so I can see what the walls, floors, kitchen countertops, etc. look like. If I can’t see, I disclose this in the appraisal and do my best to figure out a condition estimate.

Very few MLS listings here are not fixed up for sale. I look for “fixer”, “contractor”, “as is”, “handyman”, etc. in the description.

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The UAD and Appraisers – Past, Present, and Future(Opens in a new browser tab

6 Appraiser Tips on Increasing Productivity

By Ann O'Rourke on September 24, 2021 / appraisal business, bias, Fannie, Fannie Forms / Leave a comment

Tags: appraisal business, bias, Fannie, Fannie forms

6 Ways to Streamline Your Appraisal Workflow

Excerpt:

#6. Reduce revision requests

A revision will waste 15 minutes minimum. To reduce revision requests, track your clients’ common questions, and include that information in all reports when applicable. If you work for a lot of different lenders or do a lot of appraisals for lending-related purposes, those clients and intended users are probably asking some of the same questions over and over.

For example, if your clients often ask about septic, go ahead and include a comment about the septic system in your initial report. In other words, answer the question before they ask it.

To read more plus get 5 more tips, click here

My comments: Short and well written, worth reading. I have been writing about time management in my Appraisal Today monthly newsletter since June 1992, the first issue. Saving time is a very hot topic now when everyone is very busy. All of my many articles are available free to paid subscribers. They are much longer than this blog post, of course.

How to increase appraisal productivity without spending any money

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Wholesale lender has AMC-free appraisals

By Ann O'Rourke on September 17, 2021 / AMCs, appraisal business, bifurcated appraisals, Fannie, real estate market / Leave a comment

Tags: appraisal business, bias, Fannie, real estate market

UWM launches AMC-free appraisal program to coordinate appraisals in-house

Excerpt: The Pontiac, Michigan-based wholesale lender will instead coordinate appraisals in-house, contracting with appraisers directly, offering appraisers and brokers a way to bypass AMCs altogether, which UWM CEO Mat Ishbia characterizes as “middlemen.”

During a Facebook Live address, Ishbia proclaimed that while AMCs add value to the industry, appraisals have been a stumbling block for the mortgage industry.

“It’s going to be cheaper for consumers and more money for appraisers because there’s no longer going to be a middleman with UWM Appraisal Direct,” Ishbia said.

To read more, click here

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Comments from Rob Chrisman’s daily email mortgage newsletter 9-13-21

Critics wonder if appraisers will sign up for UWM’s program, or any program for that matter, given the amount of business licensed appraisers have already. AMCs take about $125-150, maybe as much as $200. If a company like UWM offers $150 more than AMCs to take their orders, does it come with a price, such as an appraiser saying they won’t do business with other AMCs? Stay tuned!

To read lots more, click here Search for appraisals.

————————————————

Comments from AppraisedValue (Housing Wire) email with comments. No link available.

The larger question is whether UWM’s direct-to-appraiser approach will be attractive enough to keep appraisers too busy to work with AMCs and whether other lenders will follow suit. As our story notes: Likely the strongest incentive for appraisers is that UWM will pass along the full appraisal fee paid by the borrower. And, while AMCs have been dogged with allegations of late pay, UWM will pay appraisers the next business day after a successful appraisal completion.

Still, some AMCs, such as Class, have already instituted a process to pay appraisers within 24 hours. And some lenders don’t want the headache of bringing valuation in-house.

My comments: I like what UWM is doing, of course. As we all know, there are much more significant problems with AMCs than money, such as long lists of requirements, including everything from every lender they work for!

The Future of Residential Lender Appraisers

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Fannie and ADUs

By Ann O'Rourke on August 27, 2021 / ADUs, appraisal business, Fannie / Leave a comment

Tags: ADUs, appraisal business, Fannie

Fannie and ADUs

Video/Slides

Excerpt: Accessory dwelling units (ADUs) are becoming more and more common. Want to brush up on your knowledge of Fannie Mae’s ADU policy? Take this short elearning course to explore information about ADUs, including requirements, construction types, and how to report ADUs in an appraisal report.

To watch, click here

Note: use two arrows at the lower right to move between slides.

My comments: I received an email notification of this on 8/24/21. Worth watching. Well done. Of course, ADU requirements vary by location. They are more being built in many areas of the country. I was recently listening to an appraisal online discussion. Appraisers were from all over the country and some had appraised homes with ADUs.

My MLS recently added a section on ADUs. Not many sales there yet, but anything can help!! In my city, most new ADUs are behind a large home. Many of the owners plan on living there when they retire and renting out the much larger home. Over the past few years, the local planning and building departments have become much easier to work with. Some local MLS listings mention “ADU possible”, a relatively new trend.

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5-24-18 Newz//UAD and Fannie Form Changes. Floating Island. Refis dropping(Opens in a new browser tab)

2021 Appraiser Fee Survey

By Ann O'Rourke on August 13, 2021 / appraisal classes, Appraisal fees, bias, Fannie, UAD / Leave a comment

Tags: appraisal business, appraisal fees, bias, Fannie, Fannie forms

2021 Appraiser Fee Survey

By Isaac Peck

Excerpt: The 2021 Appraiser Fee Survey includes 365 Metropolitan Statistical Areas (MSA), as defined by the U. S. Census Bureau, with rural areas included by state. The survey includes eight different appraisal products, including reviews and FHA appraisals, and addresses turn times, to offer insight into that controversial topic by area.

To check out the very detailed report for your MSA, click here

My comments: Lots of info by MSA! I got this info Wednesday and did not have time to look at it in detail.

Raise Your Fees, especially if working for AMCs!! Before AMC broadcast bids looking for the lowest fee, appraisal fees did not change much when volume changed. Since 1986 direct lender fees went up gradually. In my area, fees were about $250 in 1986 for SFR. Now fees have gone up to about $450 – $550 for regular long-time lender clients (and local AMCs). National AMCs are not loyal. Direct lenders can be loyal.

Fascinating and very comprehensive results by state and MSAs. I hear a lot about lenders and borrowers complaining about high appraisal fees. But in my area fees are not that high per the survey. I hear regularly about desperate AMCs who will pay $1,000 or more for appraisals. Appraisers are deluged with AMC appraisal requests, which are often deleted unopened of course. I also hear that sometimes the fee to the appraiser is much lower than the AMC fee.

The UAD and Appraisers – Past, Present, and Future(Opens in a new browser tab)

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What to Do When Your Appraisal Is Under Review

What AMCs Say to Appraisers and How to Respond

By Ann O'Rourke on July 9, 2021 / adjustments, AMCs, appraisal how to, E&O, Fannie, FHA, george dell, square footage / Leave a comment

Tags: AMC, appraisal how to, appraisal management company, Fannie, FHA, George Dell, square footage

What AMCs say to appraisers and How to Respond

By Steven W. Vehmeier

Excerpts: A student contacted me with the following dilemma concerning an Appraisal Management Company (AMC) request: “I told the Management Company that I cannot mark the Zoning Compliance as ‘Legal’ if the report is marked “as-is,” because this would not be true for the current “as-is” condition of the subject on the effective date of the appraisal. The AMC insists that as long as I disclose in the addendum that the zoning is currently ‘illegal,’ then I can mark on the first page as ‘Legal.’”

Taking the matter to the source can be accomplished by: 1) personal research of the appropriate documents, which is sometimes faster, or 2) emailing the controlling entity for their official answer. Notice I didn’t say to phone them. I want the answer in writing to pass on to the client/AMC.

To read more, click here

My comment: Some Most Excellent and practical tips!! My bottom-line advice: Fire the AMC! We all know there is always another AMC that is desperate for appraisers today. Now is a good time to shop for one that is easy to work for. You could check in appraisal online groups to see what they say. If they are not competitors, hopefully, you can get some good ideas. Be sure to post your location.

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What Should Appraisers Wear?

By Ann O'Rourke on May 21, 2021 / adjustments, appraisal business, bias, Fannie, real estate market / Leave a comment

What Should Appraisers Wear?

Excerpt:

Professional Dress

When we are observing properties, it is important that we dress professionally. If we are doing an appraisal for lending, we are a representative of our client. Although we are not an employee of the client, we do represent them. Often, we are the only person actually seen by participants in the transaction.

Photo above by BBH Singapore on Unsplash

Also, we represent ourselves, our business, so we want to dress professionally. We are professional licensed appraisers performing our work and should look as such. That said, what works for walking around properties, in between bushes, in the mud, etc.?

To read more and add your comments click here

My comments: Very interesting. From a female appraiser perspective, but applies to guys also.

Over my 45 years of appraising, I had differences in what I wear, from very professional (commercial) to casual for protection from bushes, dogs, etc. For residential appraisals, I prefer to keep my clothes from being damaged (heavy pants, strong jacket, collared polo shirts, and very sturdy shoes) from gravel, unknown stuff under weeds in the back yard, etc.). I live in a mild Mediterranean climate, so I don’t do much else except raincoats and a heavier jacket. I don’t even want to think about snow, slush, and mud!!

Wearing shoes in a house for appraisal(Opens in a new browser tab)

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What’s Happening in Appraisal Now?

By Ann O'Rourke on April 30, 2021 / Fannie, FHA, real estate market / Leave a comment

Tags: Fannie, FHA, real estate market

The State of the Appraisal Industry

Jonathan Miller speaks about new appraisers and other topics

Video – 29 minutes

Miller is an excellent speaker and worth listening to. He discusses mostly getting new appraisers (first 15 minutes or so), after commercial break, discusses tips on non-lender work and other issues.

My comments: I don’t like the term “appraisal industry” and prefer “appraisal profession.” I am an “old-timer” of 45 years and have always thought of myself as being in a profession.

I have been reading Miller’s Housing Notes for a long time. Lots of graphs from his markets, and he often has fun, strange, and controversial comments on appraisal issues.

To subscribe to his posts, click here

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How to Fight Real Estate Agents’ Appraiser Blacklisting

By Ann O'Rourke on March 26, 2021 / AMCs, appraisal business, bias, Fannie, humor / Leave a comment

Tags: bias, blacklist, Fannie forms, humor, mortgage loan volume

How to Fight Real Estate Agents’ Appraiser Blacklisting

Excerpts: When a real estate agent “blacklists” an appraiser, the result is often that the agent’s lender/AMC contacts will stop using the appraiser completely (at the agent’s request), or occasionally, the lender will continue to use the appraiser but not assign the appraiser any of the transactions that that particular agent works on. In the case of the latter, sometimes the appraiser will be assigned an order only to have it canceled later that day once the real estate agent sees the appraiser on the order and calls the lender or mortgage broker to complain. I’ve talked to appraisers who have this happen several times a year with the same agent…

Having an order canceled and reassigned is sometimes the first and only indication to the appraiser that something fishy is going on, but some appraisers who abruptly stop receiving work from a client often don’t have to look far to figure out why. While “blacklisting” is sometimes more discreet, some appraisers actually have the real estate agent call them and tell them explicitly that they are going to actively prevent the appraiser from ever working on one of their transactions.

To read more, click here

My comments: Lender blacklisting has been around for decades. I remember when the blacklists were shared among lenders. Some appraisers said it was good to be on the blacklist of the not-so-ethical lenders.

Savvy AMCs (and lenders) often just don’t give the appraiser any more work. Putting an appraiser on a blacklist can be a big issue.

Good article with practical tips from Richard Hagar and the author.

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