humor

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Is Appraising Dying? Appraisals Replaced by Computers?

Appraisal Profession Dying?

By Ann O'Rourke on February 3, 2023 / appraisal business, future, humor, non-lender appraisals, zillow / Leave a comment

Tags: appraisal business, future, non-lender appraisals, zillow

Bringing More People Into a Dying Profession?

By Dave Towne, Jan. 23, 2023

My comment: This only applies to residential lending appraisals, of course. My non-lender appraisals have changed very little with few, if any new “requirements”. I determine the Scope of Work.

Excerpts: Some people want to bring more people (primarily of color, which is great) into a dying profession. But the profession is being killed off by (mostly white!) people who think technology is the golden spoon to accurate valuations.

PAREA is being touted as the savior and the best appropriate way to get new people into this profession, especially people of color. Really? Let’s see. The education providers currently writing the PAREA courses have been indicating that the course cost will be up to 5 figures, roughly $10,000 or possibly more. That’s an outlay of significant cash BEFORE actually connecting with an appraiser who will put the PAREA-educated appraiser to work.

To read more, plus over 60 appraiser comments, click here

My comments: This only applies to residential lending appraisals, of course. My non-lender appraisals have changed very little with few, if any new “requirements”. I determine the Scope of Work.

I definitely prefer “profession” to “business”. I have always been a professional appraiser. I quit doing residential lender appraisals in 2005. I had good clients but did not like the dramatic volume changes. It has gotten very bad since AMCs took over.

Can the Appraisal Profession be Saved?

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Top Ten Reasons Why It Is Great to be an Appraiser!

By Ann O'Rourke on January 20, 2023 / AMCs, appraisal business, forecast, humor, real estate market / Leave a comment

Tags: AMC, appraisal business, forecast, humor

Top Ten Reasons Why It Is Great to be an Appraiser!

10. Dazzle your friends with your knowledge of external obsolescence.

9. The wonderful world of rats, bats, and spiders.

8. Be a part of the profession blamed for the collapse of the savings and loan industry.

7. See places in people’s houses that usually require a search warrant to access.

6. Arouse the suspicion of an entire neighborhood when inspecting comparable sales.

5. Chance to really irritate annoying real estate salespeople.

4. Walk around holding a clipboard just like “Skip” down at the Jiffy Lube.

3. Spend hours writing volumes of supporting documentation to justify the market value of a property you already decided on when you pulled into the driveway.

2. See that some people really do hang those black velveteen pictures of Elvis on their living room walls.

1. Be one of a handful of people who know that USPAP is not a medical term.

Many thanks to reader Joe Ibach, MAI, for this great list! He doesn’t know the source…seems like it is one of those email/send/resends now floating around the Internet!

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What is a residential complex property?

By Ann O'Rourke on December 23, 2022 / adjustments, appraisal how to, george dell, humor / Leave a comment

Tags: adjustments, appraisal how to, George Dell, humor

How to Identify a Residential Complex Property

By: McKissock December 16, 2022

Excerpts: The property to be appraised is atypical

In this case, the property is an outlier, oddball, or not common for the particular area. Of all the characteristics that can make a property complex, physical features are the ones that are most obvious. Some of the key physical features that can make an appraisal assignment complex include:

The form of ownership is atypical

In this case, circumstances involving ownership are uncommon or make the appraisal more complex. For example: The owner doesn’t own property rights on a waterfront property.

The market conditions are atypical

In this case, unique market conditions increase the complexity of the appraisal. For example:

The property is located in an area where there are no other sales.

There is no market for the house; no sales are occurring for some reason (e.g., the property is near a nuclear site cleanup).

Note: the link to the complementary post, “How to Pull Comps on a Complex Property,” is included in this blog post.

To read more, click here

My comments: Worth reading with good tips. I published “Tips for dealing with complex residential appraisals” in the November issue, much longer with many more tips and examples.

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Appraisal Neighborhood Analysis

Appraisers and Local Market Analysis

By Ann O'Rourke on October 21, 2022 / ADUs, appraisal business, E&O, humor, real estate market / Leave a comment

Tags: ADU, appraisal business, Fannie, liability, real estate market, RETIREMENT

Appraisers and Local Market Analysis

By Woody Fincham, SRA, AI-RRS, ASA

Excerpts: Social media and the mainstream media make a mess of these markets even in the best of times. They do not have the bandwidth to cover local markets. When you are in a metropolitan statistical area like Charlottesville and Waynesboro/Staunton you get some reporting from the local news. Still, if it is not driven to get online clicks from hyperbole it usually is not worth reporting. National data simply does not apply to the local real estate market and the closest large markets are Richmond and Washington DC. Neither are not great metrics for what our local markets are doing.

I think everyone has heard the old saying, “You can’t see the forest for the trees.” And that is true. We are in the middle of a market transition and exactly how it is transitioning is extremely hard to predict. The best market analysis is always retrospective, as they say, “Hindsight is 20/20.” Until we get past this period over the next few months it may be hard to say definitively what is exactly happening. As an appraiser, it is super important to understand how to gather and analyze relative data.

So, what metrics are worth watching?

Inventory levels
Absorption rates and marketing times
Actual days on market (DOM)…

To read more and see the graphs, click here

My comments: Read this article, including the case study. See if there are data types and graphs you can use in your appraisals. Your clients count on you to let them know the market today, not in the past. Of course, I agree with this. Appraisers have the most valuable data and analyses in a changing market: listings, pendings, price changes, etc.

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AMC asks appraiser to remove photos of black cat

Crazy Appraisal Stories! We all have them!!

By Ann O'Rourke on April 22, 2022 / ANSI, desktop appraisals, forecast, future, humor / Leave a comment

Tags: ANSI, desktop appraisals, Fannie, future

Crazy Appraisal Stories!

Excerpts: Not Just Measuring Homes and Taking Pictures

I went to appraise a home for a movie producer in Brentwood, California. I knocked on the door, and one of the producer’s boyfriends opened the door and invited me in. He was completely naked. He told me that whatever I do, don’t let the cat out. As I went room to room taking photos, I met another naked boyfriend. He also told me not to let the cat out. As I went to the second floor of the house, I met the producer who was also naked. He told me again, “don’t let the cat out.”

I’m approaching the rear patio door to take pics of the rear of the house. Outside I see a beautiful pure-bred Persian cat. I know I didn’t let the cat out but I sure as hell better get it back in the house. I started chasing the cat in the rear yard. Finally, I grabbed it, but not before it ripped my blouse and caused my hands to bleed. Huffing and puffing from the chase, I tossed the cat back into the house and closed the door. A few moments later one of the naked boyfriends came over and said “that’s the neighbor’s cat. Get him out of the house.” I then had to chase the cat again. Finally, I caught the cat and put him out of the house. I was left there panting with a torn blouse and bleeding hands, thinking appraising homes is definitely not just measuring homes, taking pics, and typing up forms.

-Mary Cummins

To read more, click here

My comments: Just For Fun! We’ve all got these stories!

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Measuring Bi-level homes square footage

Fannie requiring ANSI for appraisals starting 4/1/22

By Ann O'Rourke on December 24, 2021 / Fannie, FUN, humor, square footage / Leave a comment

Tags: Fannie, humor, square footage, zillow

ANSI Update

I have been getting questions from appraisers but did not have time to research this Very Hot Topic. Below is a link to purchase the new 2021 Standards.

There are lots of comments online. The first link below by Appraisersblogs allows comments which you can read and make your own comments. The second link is a short blog post by McKissock.

Purchasing the Standards document for $25 is a good idea—link at the end of this section. I purchased a copy, so I knew what it said. Hopefully, most appraisers who do GSE appraisals will get a copy. Disclaimers coming soon regarding ANSI, assessor’s offices, etc. Disclosure of what you use is an excellent idea.

For many years, I did relocation appraisals, where 2-3 appraisers appraised the same house before the sale. Sq.ft. by the appraisers was very seldom the same. We did future values, typically 90-120 days in the future. My most favorite appraisals. Every appraisal was a test of how close I came to the sales price.

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ANSI Measuring Standard Required on April 1, 2022 – Comments allowed

By Appraisersblogs

Excerpts: includes Fannie’s 1-page “Standardized Property Measuring Guidelines” with good information.

Does following ANSI even reflect the market? Perhaps, adopting the ANSI standard will make the description of the subject property more precise. However, how is this going to help if Realtors, assessors, builders, and architects are not measuring by the same standard? Will this create a false sense of accuracy? Will there be a lot more discrepancies once the ANSI measuring standard is used by appraisers for the subject property while different measuring standards measure the comparable sales. And how do we apply the ANSI measuring standard on exterior-only appraisals, desktops, hybrids, and 2055s?

This blog post is a good place to read comments and leave your own. Over 35 comments. Click here to read.

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Fannie Mae to Adopt ANSI Measurement Standard in 2022

Short blog post with good info

By: Dan Bradley (McKissock)

Excerpt: ANSI Z765 is a copyrighted document. A downloadable PDF is available for purchase from Home Innovation Research Labs for $25.00. The website can be accessed here: https://www.homeinnovation.com/z765.

To read more, click here

Why Don’t Real Estate Agents Measure Houses? Appraiser Humor

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Fannie Requiring Appraisal Floor Plans Coming?

By Ann O'Rourke on November 26, 2021 / appraisal business, george dell, humor, liability, real estate market / Leave a comment

Tags: appraisal business, George Dell, humor, liability

Are Floor Plans in Your Future?

By Dave Towne

Excerpts: In the Selling/Servicer Guides of FNMA and Freddie Mac, both GSE’s identify a ‘sketch’ to be a diagram of the subject as measured by the appraiser which shows exterior walls, and includes the dimensions. That’s it. They don’t even say that room labels are needed, but most appraisers include those.

Including a ‘sketch’ in reports as an exhibit is an additional Assignment Condition, beyond what USPAP requires in Standard 2, per the Assumption and Limiting Conditions on the residential forms. Both GSE’s require a more detailed diagram including interior wall locations when interior design abnormalities are discovered, and reported – which they call a “Floor Plan”.

I’ve talked with representatives from both GSE’s recently. Their line of thinking, at the present time, is a “Floor Plan” should be provided as an exhibit in the appraisal report even though the report signing appraiser was not physically present at the subject property when data was gathered. Their line of thinking is also slanted to having third parties provide the subject property data, believing appraisers are more valuable as ‘analysts instead of as observers and detailers of the property characteristics.

Thus the evolution to the new 1004 (Desktop) and 1004 (Hybrid) report forms, with different Scope of Work and Assumption and Limiting Condition statements in each version. (These forms are in your software forms package now.)

To read more and watch the video, click here

My comments: Read this post, watch Danny Wiley’s remarks in a video, and read many appraiser comments. Quite a while ago, Fannie started requiring detailed floor plans. This did not last very long, but I continued doing rough floor plans manually. I still do them but do not include the floor plans in the appraisal sketch. It keeps me from missing a small room, bathroom, etc. Of course, when there are floor plan functional problems, I put the details in the appraisal sketch. In my area, tandem rooms are common (usually from additions). They cannot be included as bedrooms.

When I used to do relocation appraisals, I always included a full interior floor plan with walls and doors. This was standard practice in my area. Doing an interior floor plan with walls and doors takes a lot of time, both measuring and using my sketch software.

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Market Decline Coming for Appraisals?

By Ann O'Rourke on September 10, 2021 / appraisal, Appraisal Subcommittee, humor, liability, real estate market, time adjustments, USPAP / Leave a comment

Tags: adjustments, humor, liability, real estate market, USPAP

Is There a Market Correction on Its Way?

by Steven W. Vehmeier

Excerpt: When will the market correction arrive?

I have no idea, but there will be warning signs, and that’s what this blog article is about. Fluctuations in market activity are common, but unseasonal and ongoing changes of any of the signs listed below can often be red flags. Additional indicators can be some of the factors that led up to the last market bust; there are plenty of articles online with which to familiarize yourself.

What will be the early signs?

Some early warning signs of housing market correction are:

A) Listing inventory in MLS starts to climb steadily. Increasing inventory is generally a sign that buyers have stopped buying (due to prices being too high or a lack of consumer confidence), or there are just fewer ready, willing, and able buyers in the marketplace.

B) Days on Market for listings increase. This event is usually linked to item (A) above.

C) Listing prices begin to stabilize, and reductions in listing prices become more common, which is a sign the market is becoming saturated…

So many appraisers missed the early signs in the last boom’s bust that resulted in claims (valid or not) of over-valuations followed by lawsuits, E&O insurance claims, and regulatory disciplinary actions. Maybe this time, we should pay closer attention to the indicators…

To read lots more tips, click here

My comments: Most Excellent list of what to look for. Very comprehensive. I have been appraising during many up and down cycles in Northern California, starting in the late 1970s at 2%+ per month, followed by a crash in 1980 when interest rates went up to 15%+. Those were the days when lenders told appraisers not to make time adjustments!! Even though we don’t like the 1004mc, it forced lenders and appraisers to look at price changes.

No one knows when the increasing market peaks, but there are signs of a decline, listed in the blog post above. I sold my house in March 2008 and did not anticipate the market crash a few months later. I was very lucky. There had been some modest price declines for about 6 months previously.

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Appraisers and The Psycho Kitty

By Ann O'Rourke on May 7, 2021 / appraisal how to, appraisal waivers, humor, real estate market, state appraiser regulators, statistics, unusual home, waivers / Leave a comment

Tags: appraisal how to, appraisal waivers, Fannie, humor, real estate market, state appraiser regulators, unusal homes

Favorite Crazy Appraisal Stories – The Psycho Kitty

Excerpt: Psycho Kitty

I had an appointment at a home in the country out in the woods. The access instructions said the cat MIGHT be caged. Got to the home and the cat was at the front door and hissed at me as I went in. I tried to make friends with the cat, but it didn’t work, so I ignored the cat and started my inspection.

As I came out of the first-floor master, he was waiting. He stood on his hind legs, teeth showing, hissing, and came at me. Once again, I used my clipboard and ran to the laundry room where I was able to shut the door. I was safe…

To read more strange and/or funny appraisal stories, click here

My comment: We all have appraisal stories, of course!! In my 45 years of appraising I have never been attacked by a cat. My creepiest cat encounter was appraising the home of a cat foster parent for a local animal shelter. Large outside cat enclosure full of cats, multiple cats on top of dressers and other places, looking at me (looked like they were hungry). I wish I could forget about all the cat eyes looking at me :<

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