Appraisal News and Business Tips

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7/19/18 Newz//Price declines? .History of Appraisals .Whale House

The History of Appraisals

By Ed Pinto
Excerpt: Many say “history always repeats itself” and in the case of appraisals, it may be for the best. We sat down with Edward Pinto, the Co-Director of AEI’s Center on Housing Markets and Finance as he shares with us his discoveries from the original FHA forms.

Dating back to the 1900’s Ed found the tools needed to bring the appraisal process back to how they were originally called for – based off of the market value and the information proved by the expert, the appraiser.

Very interesting and worth reading:

My comments: I have published several articles in my paid Appraisal Today about the history of appraising, going back to the Bible: the Book of Moses!! I have been inspired to republish them in the September issue of the paid Appraisal Today.

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7-5-18 Newz//Busy or Not?, Prices Dropping, Appraiser Hot Dog Stand

Who’s busy and who’s not?

Varies widely around the country. Maybe it depends on housing affordability? See articles below. But, it is really hard to say what causes the geographic variation for appraisers.

Many areas have seasonal variations, but now we are in the traditionally strong summer months, so it is clearer that some areas have less appraiser work.

How do you tell if it is down? AMCs dropping fees. Fewer emails, phone calls, etc.  Other appraisers complaining.
What about steady to increasing biz? Decent fees, turning down work, etc.

Changes in turn times and fees when biz slows down

Appraisers just don’t seem to understand that AMCs work for lenders and try to do what they want.

Why do AMCs/lenders want faster turn times?
AMCs work for lenders. They are competing on turn times primarily, like they always have. Business is very competitive and is declining.

Value pressure?
Is there more value pressure from some of your AMC clients?
Some lenders want to close as many loans as possible and keep profits from dropping.

Why do AMCs drop fees?
Direct lenders have their own fee panels don’t send out bid request to lots and lots of appraisers. Their fees don’t change dramatically. They have never focused on changing appraisal fees frequently. AMCs need lower appraisal fees to keep their profits up, just like you do. I have always thought of AMCs as very large appraisal companies that mostly fee out all their appraisals.

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4-12-18 Newz//What’s a Comp?, Multiple offers way over list, Rotating House

What’s a comp?

 
By George Dell, MAI, SRA

Excerpts: Our education tells us a comp is similar and competitive. So how do we measure “comparability”? If our job entails studying market data to get an answer … might it be important to know exactly how to describe a comp?

So what’s the issue? Why should we care? I am a highly trained expert. I have a license. “Trust me. I know a good comp when I see one.”

My comments: George is writing a longer article than his blog posts for the May issue of the paid Appraisal Today. I often wish his blog posts were longer, but they are designed to be short ;>

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10-5-17 Newz//Increasing home prices in disaster-prone areas. USPAP and Desktop Evaluations

Home Prices Rising Twice as Fast in U.S. Cities with Highest Natural Hazard Risk Than in Lowest-Risk Cities

 Homeowners in Highest-Risk Cities Have More Equity, Longer Homeownership Tenures
 Appreciation Slower in Florida and Louisiana Cities with Highest Flood Risk, Bucking Trend

Excerpt:
ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, recently released its 2017 U.S. Natural Hazard Housing Risk Index, which found that median home prices in U.S. cities in the 80th percentile for natural hazard risk (top 20 percent with highest risk) have increased more than twice as fast over the past five years and over the past 10 years than median home prices in U.S cities in the 20th percentile for natural hazard risk (bottom 20 percent with lowest risk).

Click here to see a Heat Map of all U.S counties – what does your look like? Search by type of disaster. Plus lots more analysis. Very interesting!!

My comment: Overall high risk counties are scattered all over the country. The article mentions strong economies and scenic locations. I live in Earthquake Country. When I first started appraising here, I was surprised that it did not matter. There is no discount even for being on a fault line. Why? Lots of people want to live in the San Francisco Bay Area. The fault line closest to me (about 10 miles away) is on the top of hills with very good Bay views. There are 3 in the Midwest and east. The large New Madras earthquake fault area in the midwest is on the map as Moderate (last earthquake in the 1800s). Two other small areas in NC and PA are on the map.

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9-21-17 Newz//Pivot- Not enough Appraisers To Too Many Appraisers, Appraising New Home In Old Neighborhood

How do we value a brand new house in an old neighborhood?

By Ryan Lundquist
Excerpt: Tip #5. The wrong one & modern homes: Just because something is brand new does not mean it’s going to fetch top dollar. If it’s the wrong type of house for the neighborhood, buyers might actually pay less for the property. It’s like when someone builds a plain earth-tone stucco tract home in a classic area with Tudors and Bungalows. Despite being new it might actually sell with a price discount if it doesn’t have any hint of era charm for the neighborhood. On the other hand there are modern homes popping up all over Sacramento (CA) and beyond that seem to defy this idea. These homes definitely don’t blend into the neighborhood at all in terms of design, but they’re still fetching high prices. Keep in mind though modern homes tend to carry wide appeal, so they are often able to break the mold of the neighborhood and still command a price premium because of their style. In short, modern homes are not vibeless tract homes, so it’s not really the same thing.
Click here to read the other 4 great tips plus some interesting comments!!

http://sacramentoappraisalblog.com/2017/07/26/how-do-we-value-a-brand-new-house-in-an-old-neighborhood/ 

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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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7-27-17 Newz// LA-FTC and AMC fee survey, Silent place, No Bubble?

One Square Inch of Silence

A tiny red pebble marks what may be the quietest outdoor spot in the United States.

Just For Fun!!
Excerpt: One Square Inch of Silence, an independent research project created by the author and Emmy Award-winning acoustic ecologist Gordon Hempton, aims to protect the space from human noise intrusions. The tiny quiet spot, accessible via a three-mile rainforest hike down the Hoh River Trail near Forks, WA was designated on April 22, 2005 (Earth Day) as a “noise control project” to ensure the decibel count at the square inch would never rise.
 
My comment: Our lives today are very noisy: cars, lawn mowers, refrigerators, air conditioners, fans, etc. etc. Plus, external noise can affect property values. There is quite a bit of noise “pollution” in most places. It is very hard to find a quiet place today, even in very remote locations. I keep reading articles on this topic.

Smoking pricing crack, era charm, & blaming appraisers

By Ryan Lundquist July 5, 2017
Excerpt: Smoking Pricing Crack: Did you see that listing in Waco Texas of the property that was rehabbed by Chip & JoAnna Gaines of the reality show Fixer Upper? It was purchased for $28,000 and now it’s listed for sale at $950,000. Would you pay more because Chip and Joanna rehabbed it?
My comment: Interesting blog post plus lots of comments!!

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6-1-17 Newz .Our 25th Anniversary! .Zillow Class Action Lawsuit, FTC Says No to LA Setting AMC Fees

FTC Challenges Louisiana Real Estate Appraisers Board Regulations that Restrict Competition

Restrictions on fee setting violate federal antitrust rules, agency alleges

Excerpt from FTC: The Federal Trade Commission has filed a complaint against the Louisiana Real Estate Appraisers Board, alleging that the group is unreasonably restraining price competition for appraisal services in Louisiana, contrary to federal antitrust law. The complaint will be submitted to adjudication before an Administrative Law Judge, who will review it and render an initial decision.
In the administrative complaint, the FTC alleges that the Louisiana appraisers board limits the freedom of individual appraisers and their customers to engage in bona fide negotiations to set appraisal fees for real estate appraisals in Louisiana.
Excerpt from LA appraisal board comments:
In a statement, the Louisiana Real Estate Appraisers Board denies the FTC claims, adding that it is operating well within its rights and any accusations beyond that are “ludicrous” and without merit.
“Respectfully, the FTC is just plain wrong. By issuing this legally faulty and factually incorrect complaint, the FTC is seeking to punish a Louisiana state agency for following federal regulatory mandates,” Bruce Unangst, executive director of the Louisiana Real Estate Appraisers Board, said in a statement.
Read the details here from the FTC:
More info, including comments from LA appraisal board
My comment: Very interesting angle… I always wondered if it was ok for states to set AMC appraisal fees. I wondered who complained????
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When Stairs and Slides Are Hiding in Plain Sight

Play real-life Chutes and Ladders at these obscure thruways.

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Appraisal Today! No Appraisal Tomorrow?

Appraisal Today! No Appraisal Tomorrow?

AVMs are a threat to appraisers today and tomorrow!!

By Barry Bates

Is the quasi-provocative title of Barry Bates’ article in the May 2017 issue of Appraisal Today. It’s “quasi” because the central issue, the livelihood threat represented by AVMs, has been around for at least 20 years. It’s provocative because Barry’s research suggests that AVMs, bolstered by artificial intelligence, satellite overlays and more robust attributive data, are a bigger threat than ever.

He also cites a 2015 Oxford white paper that studied 702 U.S. jobs and rated their likelihood of total computerization over the next 10 years; “Appraisers and Assessors” warranted a 90% likelihood. Bates explains why, by 2023, that might as well be a function of the residential market assignment volume, i.e., 10% of 2013 volume. One of the factors he mentions is the erosion of federal rules that once ensured that every new origination for refinance or purchase would be accompanied by a full appraisal of the real property.

Not only has the rule been undermined by a variety of new Fannie/Freddie/VA loan programs that don’t require appraisals, but the federal rule itself was modified in 2015 to give the GSEs power to decide whether any particular loan (or type of loan)was worthy of a waiver.

Another factor (of several) is the availability of “data on steroids”: collateral information (including every field in the Uniform Appraisal Dataset (UAD) from past and current appraisals populating the GSE AVMs and database from every appraisal sent through one of the uniform collateral data portals, like Fannies UCDP, which already allows for appraisal “sharing” for aggregators and Fannie’s correspondent lenders (even the 1004MC data can be offloaded to a siding for market analysis).

Bates concludes that all the necessary pieces are being assembled for an artificial intelligence AVM with robustness equal to the Stay-Puft Marshmallow Man.

[Editor’s Note. When asked whether his prognostications were a little on the gloomy side, Bates rejoined, I know, I know, ‘The pessimists are right, but the optimists have more fun.’ I mean, hey, even paranoids have enemies! And unfortunately, as a card-carrying neurotic, I’d almost always prefer to be right.]

Bates’ full commentary is in the May issue of the Paid Appraisal  Today. For more

info, go to www.appraisaltoday.com/products

4-20-17 Newz// The Narrowest House, State Appraisal Boards, Low Housing Inventory

Keret House- The world’s narrowest house makes for an awkward, four-foot-wide living space.

Excerpt: Designed by Polish architect Jakub Szczęsny, the Keret House in Warsaw is wedged inside a four-foot crevice, nicknamed a “cushion of air,” between two buildings. The Keret House stretches over 30 feet tall but is simultaneously only 28 inches wide at its narrowest point-thinner than a stovetop-and just four feet wide at its widest.
My comment: Check out the fotos and full article. Wow!! I have written about narrow houses in this weekly email before, but this is definitely the narrowest!!
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When You Get Notice of a State Complaint…

By Ted Whitmer
If you are an appraiser, it is likely that at some point in your career you will receive notice that a complaint was filed against you. In one particular busy year in Texas, roughly one in six residential appraisers were filed against with the Texas Appraiser Licensing and Certification Board. When you run the number of complaints in one year against the number of appraisers, one can expect a complaint every eight to ten years.

Read more!!

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