Fannie Appraisals Covid Update March 27 2020

By on March 27, 2020   /   Coronavirus, Fannie, fees   /   Leave a comment
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THIS IS THE MARCH 27, 2020 OLD POST. SIGNIFICANT APPRAISAL CHANGES SINCE THAT DATE. UPDATED 11-8-20

NOTE: This information is changing on a daily, and often hourly, basis. The amount of information is almost overwhelming. What you read today may change tomorrow. Most of the info below is summary with more details in the monthly newsletter next week. Also, lots more on personal COVID-19 such as data availability, safety, etc. I am spending 10+ hours per day trying to keep track of it so I can let you know.

Per Fannie, this is a “fluid event”. There are many questions about health and safety for the appraiser and the borrower (and their contacts if infected) when doing interior inspections.

There is lots of appraisal misinformation online. It is not a good source unless it includes a link to the correct information or the source that can be located online. I only use email chat groups that I have used for many years, such as National Appraisers Forum To read more, click here

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Covid humor for appraisers

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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Join the National Appraisers Online Forum

By on November 8, 2019   /   Appraisal fees, bifurcated appraisals, Fannie, fees, george dell, Mortgage applications, weird properties, zillow   /   Leave a comment
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National Appraisers Forum

By Dave Towne

Excerpt: Appraisers, if you would like to learn from highly qualified peers (other than me! :), post questions, or offer your own comments, consider joining the FREE group, National Appraisers Forum (NAF). Use this link.

This is one of the best appraiser groups as all commentary is respectful. While not everyone always agrees with certain points, the discussions are not demeaning. There is a wealth of info participants share freely on a wide number of topics. The group has several moderators who monitor the posting activity.

One key point, NAF participants are not anonymous. You must use your name (at a bare minimum) when participating, which is required when signing up… Moderators are asking that anyone who wants to join should give their name as licensed, the state they are in, and their license number.

To read more, click here

My comments: This is my favorite appraiser online group! I get many emails from various sources for this newsletter and have been a member of many online communication places. Before the internet was widely available, I hosted live chats on aol and compuserve. Since then I have watched many online places. Unfortunately, just like any other topic, sometimes the groups end up doing lots of “flaming” (attacking another participants, etc.), negative comments, off topic, politics, etc. I quit going to these places.

Of all the groups I have subscribed to, National Appraisers Forum is the best for me. I have been a member since it started, or soon after. No complaining about AMCs, off topic, trolling and flaming, etc. The founder, Steve Smith, and the moderators keep it this way. Regular contributors are “high end” appraisers with many years of experience. Hot topics are often discussed.

There are well-managed appraisal groups on Facebook, but it is too hard for me to follow the threads, so I don’t go there very often. But, it may work for you. Join the National Appraisers Online Forum!

Another major factor is that you must use your real name, so we know who is commenting. Allowing anonymous postings can easily decay into a mess.

I will be updating my article ” How to connect with other appraisers online. What’s the best group for you? ” in a future issue of the paid Appraisal Today discussing other email chat groups, how to find other groups or start your own, Facebook, etc.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

How to communicate with appraisers online

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What’s included in appraisal GLA?

By on November 1, 2019   /   data, Fannie, FUN, humor, square footage, weird properties   /   Leave a comment

Should The Agent Include These Areas In Square Footage?

Excerpt: The most thrown around metric in real estate has to do with square footage and price per square foot. People ask me all of the time what homes in this or that neighborhood are selling for per square foot.

Why do they do this? Because they want to take the price per square foot and then multiply it by the square footage of their home to find out what it is worth. Sounds reasonable right? Wrong….

(An example I see a lot): A heated and cooled finished room that is attached to the main house but you get to by going outside of the main house should not be included in the main GLA.

To read more, click here

My comment: written for real estate agents, but many appraisers, including myself, regularly get asked: “what is in the living area” by agents. I do. This article focuses on ANSI and may help you explain it to them. There are links to his other blog posts on this, and related, topics.

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What is Included in Appraisal Square Footage?

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Statute of Limitations for Suing an Appraiser

By on October 25, 2019   /   bifurcated appraisals, cost approach, Fannie, hybrid appraisals, Mortgage applications   /   Leave a comment
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What’s the Statute of Limitations for Suing a Real Estate Appraiser?

by Peter Christensen

Excerpt: This is a common question that I’m asked because many lawsuits against appraisers are filed years after the appraisal was performed by the appraiser, sometimes 10 or more years later.

The reason for this is that the plaintiff suing an appraiser may not have known there was a problem with the appraisal at the time it was received or may not have suffered any damages as a result of the alleged appraisal error until a loan default or other event has occurred years down the road.

This plaintiff might be a lender who recently foreclosed on a loan or might be a borrower who believes they paid too much or borrowed too much based on a deficient appraisal.

For more info, click here

My comment: Blog post includes a link to all 50 states for statues of limitation. Knowing about the Statute of Limitations for Suing an Appraiser can really help if you receive a letter from an attorney.

Appraisal Business Tips 

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Covid-19 Residential Appraisers Tips on Staying Safe

Statute of limitations for appraisals

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Bifurcated Appraisals and Inspections Yes or No

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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Bifurcated appraisals – Yes or No??

What Fannie Says: Yes, of course

Interview with Lyle Radke Lyle Radke, Director of Collateral Policy at Fannie Mae

Excerpt: Fannie has spent the first half of 2019 detailing its plans to roll out the 1004P, a new desktop appraisal that will be based on a Property Data Collection report that is prepared by a third party inspector; this is part one. Fannie has indicated that it is currently testing appraisers, appraiser trainees, insurance inspectors, real estate agents, property preservation service professionals, and smart home service professionals as potential Property Data Collectors to determine “which labor force can best collect data,” including a “robust and accurate set of data elements, photos, and floor plan.” Bifurcated Appraisals and Inspections Yes or No is a controversial topic.

The more impactful revelation is that Fannie aims to replace the appraisal requirement completely where it can. In these scenarios, a property data collector, not necessarily a licensed appraiser, will inspect a home and report back on the condition of the property. Then, based on that property inspection report, a desktop appraisal may be ordered or the appraisal requirement might be waived altogether.

Many issues are discussed: Value Verify, appraiser aging, who will do inspections, etc.

For more info, click here

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What Richard Hagar Says on Bifurcated:

No – A Train Wreck

Excerpt: We are hearing about the latest trend called bifurcated appraisals. Within the past year I’ve seen this term used more often in more diverse places than in the prior 20 years combined; it’s almost like some media company has decided that “bifurcated” is the “it” term for 2019. All sorts of people, AMCs, lenders, technology companies, and Fannie Mae are promoting this “spiffy” new process. They are hoping that the rest of us will “get on board” with their new “better” process.

I do not want to “get on board” because it’s headed for a train wreck.

Editor’s Note: Hagar’s bifurcated test in his office did not go well.

For more info, click here

My opinion: It is a business decision whether or not to do bifurcated appraisals. This month’s issue of Appraisal Today has an article on the topic, written by Julie Friess, SRA

Appraisal Business Tips 

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Covid-19 Residential Appraisers Tips on Staying Safe

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5 things to remember about “low” appraisals

By on September 20, 2019   /   appraisal business, Fannie, george dell, Mortgage applications, real estate market, unusual home, weird properties   /   Leave a comment
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Low appraisals, weed, & rent control

13516718 – white wood texture with natural patterns

By Ryan Lundquist 

Excerpt: I’ve been getting lots of phone calls and emails about low appraisals over the past couple months. Is something in the water? What’s going on? Let’s talk about this briefly. Then I have some quick thoughts on weed and rent control.

Excerpt: 5 things to remember about “low” appraisals:

1) This is common when the market slows.

2) This is even more common in a declining market.

3) It should happen if the contract is too high.

4) It can spur negotiation instead of kill a deal.

5) The value of course is too low sometimes.

To read more To read more, click here

My comment: Keep a close watch on your market. Don’t miss it when prices start going down!! But, No One Knows when the peak occurs!! I tell people that If I knew, I would be rich and probably not writing this newsletter ;>

On the other side, people ask me all the time about our very high prices (median around $900,000). I tell them to wait for the inevitable crash. I have been through three here when prices in my city dropped 30-40%. Other nearby cities were up to 80% declines. They stay down for a long time. Unfortunately, few buy then. “Herd” mentality, I guess. Do what everyone else is doing – not buying. The last property I purchased in 1995 for $375,000 I got 100% seller financing. It had been on the market for two years. I sold it in 2004 for $1,000,000. It recently resold for $1,700,000. Crazee price changes!!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Are Human Appraisers Being Phased Out?

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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Are Human Appraisers Being Phased Out? Federal Regulators Vote to Loosen Requirements

Excerpt: What’s that drone doing hovering over a property?

Soon that sight may be the norm on homes for sale.

The days of human appraisers may be coming to an end for homes priced under $400,000, if regulation proposed by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Federal Reserve gets approved.
Previously, only homes valued under $250,000 could be purchased or sold without the use of a human appraiser. That threshold is potentially being raised to $400,000, opening up more business for drone-monitored and computer-generated home valuations. The vote is nearly there, awaiting expected agreement from the Federal Reserve before the regulation takes effect.

While the appraisal industry is concerned the change could negatively impact real estate at large, the brokerage side of the business predicts the threshold hike should have minimal effects on homeownership and the home-buying experience.

Comments from many sides of the issue and lots of comments by readers.

To read more, click here

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Zoning in the Appraisal Process

By on August 23, 2019   /   appraisal how to, deminimus, Fannie, Mortgage applications, unusual homes, weird properties, zillow   /   Leave a comment
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Highest and Best Use – Residential Appraisers Need To Understand It!

Excerpt: There are many valuation products out there. CMA’s, BPO’s and AVM’s to name a few. What you will likely not see in those kinds of valuations, is the specific zoning class for the property being valued. Why? Zoning in the Appraisal Process is very important.

With these types of valuations, a highest & best use (HBU) analysis is generally not made. However, if you hire an appraiser to value your home, we will perform this analysis. What is a highest & best use analysis? Why is it important in the development of an opinion of value? How is zoning involved?

To read more and see the fun animated gifs click here

My comments: My Most Frequent Residential Appraisal Rant!! I started at an assessor’s office in 1975. The First, and Most Important, Question was “What is the highest and best use?” In 1986 I started doing residential lender work. The form was just a check box for HBU. If you checked No, it was a big problem for the lender. Many residential appraisers don’t check the zoning, general plan, etc. One good way is to just drive around and see what is happening. For example, lots of small homes being torn down and McMansions being built. Or, lots of houses on a busy street converted to office uses. Or, a small house on a big lot with apartments all around it. A common residential issue is a possible lot split.

Don’t forget the General (Or Specific) Plan. It tells you what the city wants today and in the future for land use, which is not discussed in this article.

I have appraised a lot of older commercial properties for lenders, which often had a HBU different than the current use. I discussed it in my appraisals.

When there is a big difference in value between two appraisals, it is often due to a difference in opinion of HBU. Don’t get into trouble. Be sure to think about HBU!! If you’re not sure, contact an experienced appraiser, particularly one who does a lot of non-lender work and/or commercial appraisals.

In the Feb. 2017 issue there is an excellent article written for residential appraisers by Denis Desaix, “Residential Highest and Best Use Analysis: more than Just a “Check box” available to paid subscribers. See below.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Appraisal Process Challenges

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Practical real estate appraisal writing tips for AMC questions

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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Write Like A Professional – Very Practical Writing Tips for AMC/underwriter questions

By Tim Andersen

Excerpt: QUESTION: I like to use the term, “in my professional opinion” as part of my reports. After all, I am a professional paid to express opinions. Recently, the reviewer for an AMC requested I remove that term from my report since, in her words, “…it has nothing to do with value”. Is the reviewer overreaching on this? The reviewer has the right to tell me if there is an error in my report, but not to criticize the language I use in my report. What should I do?

ANSWER: As Gertrude Stein was supposed to have said upon seeing Oakland, California for the first time: “There’s no there there!” For good or ill, the same may be said about many real estate appraisal reports and the convoluted language they insist on using…..

Excellent and practical. To read more click here

My comment: this is the best article I have ever seen for practical tips on how to reply to AMC/underwriter questions with lots of examples.

Appraisal Business Tips 

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Appraiser values are developed and are not guesses

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. Appraiser values are developed and are not guesses.

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.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Zillow CEO sold his home for 60 percent of the Zestimate

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